UPDATE: Rostelecom expects revenue to rise 4–5%/year in 2018–2022
(Adds details on debt in paragraphs 6–7)
SKOLKOVO, Moscow Region/MOSCOW, Mar 21 (PRIME) -- Russian state-controlled telecom operator Rostelecom expects its revenue to grow on average by 4–5% per year in 2018–2022, according to the company’s new development strategy unveiled on Wednesday.
Operating income before depreciation and amortization (OIBDA) margin is seen at over 32% in the forecast period. The capex/revenue ratio, excluding state programs, will decrease to 17%.
The company’s capital expenditures were at 60.8 billion rubles in 2017, or 19.9% of revenue. Revenue rose 3% in 2017 to 305.3 billion rubles. OIBDA was at 96.9 billion rubles, and OIBDA margin was at 31.7%.
The operator’s President Mikhail Oseyevsky said Rostelecom’s revenue will reach 375 billion rubles in 2022. “I’d like to notice that we’ll lose about 40 billion rubles of revenue from traditional telephony over these five years,” he said at the Investor Day.
“The strategy does not stipulate any big mergers and acquisitions, big from the point of view of an impact on the strategy, on our basic financial results…Probably, (deals) could emerge. It will require a revision of the strategy. It’s a natural process.”
Under the new strategy, the net debt/OIBDA ratio will not go beyond 2, and the company targets at 1.7–1.8 in 2022, the company’s head said.
The operator’s net debt was at 181.594 billion rubles as of the end of 2017, and the net debt/OIBDA ratio was at 1.9 against 1.8 in 2016. Most of the debt, or 99%, is denominated in rubles.
Rostelecom will downsize its staff by 10–15% to 115,000–120,000 people by 2022 from 134,000 employees at present, according to the strategy.
The company will raise the share of employees with digital skills to 25% from 19% in 2017. Worker productivity should increase by 40% by 2022.
Oseyevsky also said that Rostelecom plans to hugely reduce the number of its subsidiaries. The the company does not intend to raise its 45% share in mobile operator T2 RTK Holding, working under the Tele2 brand. “The matter is not on the agenda now,” he said.
(57.7033 rubles – U.S. $1)