Key results for Q3 2021¹:

• Revenue grew by 6.2% y-o-y to RUB 91.8 billion
• OIBDA was down 1.3% y-o-y to RUB 39.4 billion, with OIBDA margin down 3.3 p.p. y-o-y to 42.8%
• CAPEX was RUB 10.8 billion, down 2.0% y-o-y
• Net profit increased by 3.3% y-o-y to RUB 13.5 billion
• Net debt decreased by RUB 15.6 billion in the third quarter to RUB 286.3 billion

Revenue growth

Service revenue for Q3 2021 came in at RUB 81.7 billion, up 4.6% y-o-y. This positive momentum was mainly driven by higher revenue from data services (the number of mobile data users was up 6.9% by quarter-end), and from content services, including START, as well as big data analytics services and ICT projects. International roaming revenues grew as travel restrictions were gradually lifted.

In the third quarter, revenue from sales of equipment and accessories increased 20.3% y-o-y to RUB 10.2 billion as a result of stronger customer activity in the retail market compared to the previous year. The highest sales growth was seen in high-end smartphones.

Customer base

MegaFon’s customer base in Russia (calculated using the new accounting system referred to below) grew 5.9% y-o-y to 74.2 million.

Following the migration to a new billing model, completed in 2H 2020, MegaFon adjusted its customer base accounting system with stricter requirements for monitoring customer activity. The new system enables the Company to use its numbering capacity more effectively.

Cost management

In Q3 2021, OIBDA declined by 1.3% y-o-y to RUB 39.4 billion, with OIBDA margin down 3.3 p.p. to 42.8%, primarily due to advertising costs rebounding after the pandemic, as well as higher employee and rental costs as stores reopened and employees moved back to the office.

Debt financing costs were further reduced as MegaFon took further steps to improve its leverage. In Q3 2021, the Company cut its net debt by RUB 15.6 billion to RUB 286.3 billion. Net profit increased by 3.3% y-o-y to RUB 13.5 billion.

The best mobile network in Russia

The total number of MegaFon’s base stations exceeded 202,100 by quarter-end, with the advanced 4G/LTE segment showing 15.9% growth 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. In Q3 2021, CAPEX was RUB 10.8 billion, down 2.0% y-o-y.

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

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¹Based on the IFRS interim condensed unaudited consolidated financial statements for Q3 2021 reviewed 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.