MegaFon on Thursday posted a strong set of third quarter financials, including growth in net profit, although its operating income fell as marketing costs grew.
The Russian operator saw net profit rise by 4%year-on-year in the three months to the end of September to 13.31 billion roubles (€189 million). The increase was linked to lower foreign exchange losses, amongst other things.
Its revenue was virtually flat at RUB81.28 billion (€1.16 billion).
Wireless services accounted for the lion’s share of turnover, bringing in RUB70.65 billion, an increase of 1.3%. Growth at the telco’s wireline business was stronger though; revenues from wireline service increased by 9.5% to RUB5.67 billion.
MegaFon had 73.9 million mobile subscribers at the end of September, up 7% over 12 months. 28.5 million of the total were data users, up by 6.3% on-year.
Operating income before depreciation and amortisation (OIBDA) declined by 3% to 36.15 billion, while OIBDA m argin shrank to 44.5% from 46%. This was mainly due to an increase in advertising expenses related to a new company positioning campaign, higher rent and utilities as a result of network expansion, and an increase in operating taxes, MegaFon said.
"We have delivered good results this quarter," reversing the declines in revenue and net profit reported in the previous quarter, said company CEO Ivan Tavrin, in a statement.
"At the same time, the macroeconomic conditions remain challenging, and we continue to anticipate that constraints in consumer spending, as well as intensified competition in the telecoms industry, will exert downward pressure on our OIBDA and OIBDA margin, which we intend to endeavour to mitigate by careful management of all of our costs," he added.
The telco revised upwards its OIBDA margin guidance to 41.5% or above for the full year, up from 40%.
It stuck by its earlier forecast of flat revenue, and said its capex for 2015 will not exceed RUB65 billion, excluding acquisitions.
