Question: What are MTS's financial results for Q3 2024, and what do they mean for investors?
MTS showed growth in several key areas in Q3 2024. Net profit was RUB 1 billion, which demonstrates stability, although there was a decrease in profitability amid an increase in interest expenses.
Explanation of key indicators:
Net profit (RUB 1 billion):
Meaning and impact: Net profit reflects the company's financial result after deducting all expenses and taxes. The increase in interest expenses, caused by both internal and external factors, affected the final profit, reducing its growth rate. This circumstance is important for investors, since net profit affects dividend payments and the overall financial performance of MTS.
Consolidated revenue (RUB 180.4 billion, up 15.3% year-on-year):
Significance and impact: The 15.3% increase in revenue demonstrates growth across all areas of MTS’s business, demonstrating the diversification of the company’s revenue and strengthening its position in the market. Revenue growth supports the company’s operational capabilities and allows MTS to invest in expansion.
OIBDA (RUB 61.5 billion, up 4.5%):
Significance and impact: OIBDA (operating income before depreciation and amortization) grew 4.5%, indicating the sustainability of the company’s core operations. This is a positive indicator for investors, as OIBDA reflects MTS’s ability to maintain a stable cash flow.
Growth in ecosystem clients (16.8 million):
Significance and impact: The 16.1% increase in the number of ecosystem clients and revenue from ecosystem products demonstrates the successful strategy of MTS to expand its products and attract a more loyal audience. It is important to note that the number of customers using four or more products has grown by 30%, which indicates a growing dependence of users on the MTS ecosystem.
What investors should pay attention to:
Rising interest expenses: MTS is facing increasing debt servicing costs, which is putting pressure on net income. Investors should take this factor into account and analyze how the company plans to reduce interest expenses in the future.
Ecosystem strategy: MTS is actively expanding its product ecosystem, which attracts and retains customers, but also requires investment. A steady increase in the number of ecosystem customers and revenue growth in this area indicate the right strategy aimed at long-term development.
Strategic adjustments: In the context of tightening monetary policy and regulatory pressure, MTS plans to review its strategy. The planned "Investor Day" will give the market a clearer picture of the company's future plans and how it intends to adapt to the new conditions.
From myself to investors: MTS demonstrates sustainable growth in a changing economic environment, actively developing areas of ecosystem services. It is important to assess potential income from the ecosystem and the company's resilience to external factors, especially in the context of rising interest expenses. Investors should pay attention to the plans that the company will announce at the "Investor Day" to assess its long-term goals and strategic steps in the coming years.
