Ukrtelecom revenue falls 1% yoy in 1Q16

Ukraine’s leading fixed line telecom operator Ukrtelecom (UTLM UK) reported a 1% yoy decline in net revenue to UAH 1,636 mln in 1Q16. Revenue in its key segment, local telephony (which is mainly the collection of monthly payments for telephone use), increased 2% yoy to UAH 711 mln. Revenue from its Internet segment increased 16% yoy to UAH 407 mln. Its other segments showed a decline in revenue. 

The company’s EBITDA improved 159% yoy to UAH 234 mln, which was mainly the result of decreased “other operating expenses”. Its bottom line for the quarter was UAH 98 mln, up from negative UAH 165 mln a year before. The company generated UAH 466 mln in operating cash flow (-6% yoy) and managed to decrease its net debt by 9% YTD to UAH 1,623 mln.

Alexander Paraschiy: The company’s negative revenue trend is worrisome, especially in its biggest segment. Its 2% yoy increase in fixed phone payments collection, after about a 17% increase in monthly rates as of October 2015, suggests the company’s fixed line customer base is falling increasingly faster. Therefore, we expect the company’s revenue will continue to worsen in the coming quarters.