In Q2 2019 MegaFon demonstrated steady growth in its key performance indicators1 while maintaining its loyal subscriber base. The operating results show that MegaFon is pursuing the right strategy towards its digital transformation goal:
In June 2019, the Company completed the buy-back of the remaining shares held by non-affiliated shareholders. Shares of MegaFon are no longer trading on the London or the Moscow stock exchanges. The buy-back was partly carried out using debt financing which increased the Company’s total debt over the period of the buy-back process. The Company used part of its profit to service the debt.
The concentration of greater control over the Company by its main shareholder in the second quarter enabled MegaFon to significantly increase its operational efficiency, and to continue to invest in its network, accelerate implementation of new projects and launch new digital products and services as part of its strategy of digital transformation:
1 See Schedule 1 for definitions of the terms used and Schedule 2 for the reconciliation of non-IFRS measures. Due to rounding actual numbers and calculations for financials and KPIs may differ from those set forth in this release.
2 Year over year (“y-o-y”) stands for the same periods in the current and previous year on either a quarterly or yearly basis.
3 This is shown without taking into account the effect of the IFRS 16 implementation.
4 Includes subscribers of the Company in Russia and the subscribers of its subsidiaries: “TT mobile” CJSC in the Republic of Tajikistan, “AQUAFON-GSM” CJSC in the Republic of Abkhazia and “OSTELEKOM” CJSC in the Republic of South Ossetia.
5 Based on Roskomnadzor, as of 30 June 2019.
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The company increased its service revenue, OIBDA and net profit in spite of plummeting roaming and retail revenues.