Revenues of Russia's MTS Group totaled RUB 116.8 billion in the fourth quarter of 2017, up by 1.7 percent year-on-year. Adjusted OIBDA grew by 6.2 percent to RUB 45.2 billion, and the OIBDA margin was 40.6 percent. Net profit dropped by 12.0 percent to RUB 10.9 billion.
In Russia, the mobile operator reported sales of RUB 109.8 billion, up by 5.8 percent, and adjusted OIBDA grew by 6.4 percent to RUB 43.7 billion. Ukraine also contributed to the group performance, as strong demand for mobile data drove growth in service revenues.
Over the full year, MTS met its outlook, with revenues up 1.7 percent and adjusted OIBDA growing 6.2 percent, for a margin of 40.6 percent. The group's free cash flow grew by 52.2 percent to RUB 71.5 billion in 2017, after capital expenditure dropped 8.5 percent to RUB 76.4 billion.
Subscribers totaled 106.5 million at the end of 2017, down by 3.1 percent year-on-year. In Russia, the number dropped by 2.2 percent to 78.3 million.
MTS launched its MTS Money Wallet in 2017, and the payment service had 4.3 million active users at the end of 2017. MTS Money Wallet also acquired a majority stake in the software developer LiteBox to provide cloud-based cash management solutions.
For 2018, MTS forecast "slightly positive" revenue growth, driven by data demand and the Ukrainian market. Adjusted OIBDA is expected to grow by RUB 20 billion thanks to the new IFRS accounting rules, but otherwise show a stable development due to an expected increase in labour and spectrum costs, the costs of ending roaming charges in Russia, and changes in retail distribution and third-party content agreements.
MTS expects capex of RUB 160 billion in 2018-19, led by continued LTE upgrades in Russia and the launch of 4G in Ukraine. It also faces the costs of new data retention legislation in Russia.
Alexey Kornya, the CEO of the company, said that MTS expects to continue its transformation from a traditional telecommunications services provider to a burgeoning and successful player in the internet market.
