MegaFon : increased revenue by 10.9% in Q4 2021

Key results for Q4 2021¹:

• Revenue grew 10.9% y-o-y to RUB 97.1 billion
• The subscriber base grew 5.7% to 74.4 million
• OIBDA was down 4.5% to RUB 34.6 billion
• CAPEX was RUB 15.4 billion, down 19.6% y-o-y
• Net profit increased by 639.6% to RUB 32.5 billion
• Net debt decreased by RUB 41.6 billion in the fourth quarter to RUB 244.6 billion

Revenue growth

Service revenue for Q4 2021 came in at RUB 84.0 billion, up 7.4% y-o-y. This growth was mainly driven by higher revenue from data services (the number of mobile data users was up 5.6% y-o-y), and from content services, including START, as well as ICT projects, M2M and big data analytics services. International roaming revenue showed growth throughout the year as border lockdowns were gradually lifted and COVID-19 restrictions were eased.

Revenue from sales of equipment and accessories in the fourth quarter was up 40.1% y-o-y to RUB 13.1 billion, mainly due to higher retail consumer spending, especially before the holidays by year-end when there was a sales boom, particularly in high-end smartphones.

Customer base

In Q4 2021, MegaFon's customer base in Russia grew 5.7% y-o-y to 74.4 million. The growth is mainly attributable to the update in the terms and options for the #NoOvercharges base tariff line.

Cost management

In the fourth quarter, OIBDA was RUB 34.6 billion, down 4.5% y-o-y, while OIBDA margin stood at 35.7%, down 5.8 p. p. y-o-y. Profitability was primarily impacted by higher sales of equipment and accessories, which historically demonstrate lower margins, as well as by increased personnel, rent and utility costs due to the reopening of stores and employees returning to offices.

The Company continues to reduce its leverage. In the fourth quarter, net debt decreased by RUB 41.6 billion to RUB 244.6 billion, resulting in lower financing costs year-on-year.

Net profit for Q4 2021 grew 639.6% y-o-y to RUB 32.5 billion, boosted by the deal to contribute the assets of JSC First Tower Company (FTC) to an independent operator at the end of 2021.

The best mobile network in Russia

The total number of MegaFon's base stations exceeded 203,600 by the quarter-end, with the advanced 4G/LTE segment showing 16.1% growth y-o-y. CAPEX in the fourth quarter totalled RUB 15.4 billion, down 19.6% y-o-y. Thanks to heavy network investments in previous periods, the Company continues to expand its infrastructure and maintains its market leadership in mobile data while keeping costs down.

Financial results (in millions of RUB, except as otherwise indicated)

	3M			Year
	Q4 2021	Q4 2020	Q4 2021/ Q4 2020	2021	2020	2021/ 2020
Revenue	97,085	87,542	10.9		354,190	332,159	6.6%
Service revenue	83,992	78,199	7.4%		316,400	303,033	4.4%
Sales of equipment and accessories	13,093	9,343	40.1%		37,790	29,126	29.7%
OIBDA	34,647	36,295	(4.5%)		147,741	147,786	(0.0%)
OIBDA margin	35.7%	41.5%	(5.8 p.p.)		41.7%	44.5%	(2.8 p.p.)
Net profit	32,512	4,396	639.6%		66,265	26,626	148.9%
CAPEX	15,378	19,126	(19.6%)		46,950	54,719	(14.2%)

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¹Based on the IFRS consolidated financial statements for 12M 2021 audited by JSC KPMG. Due to manual rounding, financial and operating results may differ from those presented here. All changes are shown for the same periods in the current and previous year on a quarterly or annual basis, unless otherwise indicated.