2013 results - telecom.kz · lease of transport network channels local telephony data network ip tv...
TRANSCRIPT
May, 2014
2013 RESULTS
I. Main Operational Results 2
II. Key Financial Results 3
III. Structure of Revenue 4
IV. Debt Capital 5
V. Capital Expenditures 6
VI. Large Investment Projects 7
VII. Dividend Policy 8
VIII. Credit Ratings 9
IX. Development of LTE Services 10
X. Pay ТV 11
XI. Development of the Backbone Network 12
CONTENT
1
2
MAIN OPERATIONAL RESULTS
• Revenue: KZT190 867 m
• Net income: KZT19 614 m
• EBITDA: KZT65 829 m
• EBITDA/margin: 34.5%
Key Financial
Indicators
• Fixed lines: 4 085 811
• Broadband subscribers:1 467 520 (ports)
• IP TV subscribers: 246 435
Main
Operational
Results
• Acquisition of Digital TV LLP and MaxCom LLP
• Integration with Digital TV LLP
Assets
Acquisition
• Opening of the telecommunication networks „
joint of Kazakhtelecom JSC and
Turkmentelecom NTC
Backbone
Network
• Early redemption of 30 148 000 registered
coupon bonds
• Raising new loans: Cisco Systems Capital
Netherlands B.V., SB Sberbank JSC for project
financing
Credit Profile • LTE network launching in Aktau, Aktobe,
Atyrau, Karaganda, Ust-Kamenogorsk and
Shymkent
Strategic
LTE (4G)
Project
• The decision of the Extraordinary Shareholders
Meeting dd. 27.12.2013 regarding payment of
dividends in the amount of KZT2 603.90 per
share
Dividends • Continuing construction of FTTH network in 18
cities of Kazakhstan: 181 thousand ports
Strategic
FTTH
Project
3
KEY FINANCIAL RESULTS
Description
• In 2013, revenue growth was
8.7%. The revenue growth was
obtained due to the growth of
revenue from local telephony,
broadband and IP TV services.
• Decline in net income by 2.6%
and EBITDA by 4.7%. This
decline is due to implementation
of the project for construction of
LTE/GSM/UMTS mobile and data
networks.
• Decline in EBITDA margin by
12.2% (from 39.3 in 2012 to
34.5 in 2013).
• Partial early redemption of 30 148
000 bonds in the amount of
USD200 m allowed significant
increase of the safety margin of
the following important ratios:
- Debt / Equity:
0.33 (2012) and 0.24 (2013)
- Debt / EBITDA:
1.32 (2012) and 0.95 (2013)
Cash as of
31.12.2013
KZT51 720 m
Acquisition of Digital TV and MaxCom
KZT10 232 m
Payment of dividends for
2-4Q 2012
KZT1 779 m Partial early redemption of 30 148
000 bonds
(USD200 m)
Key Financial Results
Cash as of the end of the year
20 133 19 614
69 068 65 829
175 669 190 867
2012 2013
KZ
T m
Net Income EBITDA Revenue
4
STRUCTURE OF REVENUE
9.2%
6.5%
4.5%
5.5%
23.9%
34.7%
1.0%3.7%
11.0%
DLD / ILD
Calls to subscribers of other operators, including mobile operatorsAgreements with international operators
Lease of transport network channels
Local telephony
Data network
IP TV
Mobile communications
Other revenues
7.3%5.1%
3.6%
3.4%
25.1%
37.2%
2.5%2.3%
13.5%
DLD / ILD
Calls to subscribers of other operators, including mobile operators Agreements with international operators
Lease of transport network channels
Local telephony
Data network
IP TV
Mobile communications
Other revenues
Structure of Revenue in 2012
Structure of Revenue in 2013
Description
• The largest share of revenue
comes from the broadband and
local telephony services, 37.2%
and 25.1% accordingly (2013).
• Gradual decline in revenue from
DLD/ILD calls, calls to subscribers
of other operators, including
mobile operators, is observed
during the last several years. This
decline is due to the development
of alternative ways of calls,
migration of DLD/ILD calls traffic
to mobile operators‟ networks.
• Fast growth of revenue from IP
TV services is observed in the
Company‟s structure of revenue.
Revenue from these services
grew in more than 2.5 times in
2013 compared to 2012.
5
DEBT CAPITAL
37 863
11 107
91 329
62 826
2012 2013
Net Debt Total Debt
15 660
29 483
17 683
Bonds
Loans
Lease
• In 2013, own and debt capital were
used to finance investment projects.
Thus, the Company ensured balanced
structure of project financing (27% of
investments were leveraged).
Financing Structure
1
• Cisco Systems Capital Netherlands
B.V.: with the total amount of USD8.5m
(to finance supply of Cisco‟ equipment)
with the fixed rate of 5.25 %
• SB Sberbank JSC – Agreement for
non-revolving credit facility of
USD185m with the fixed rate of 4.95%
for 7 years.
• SB Sberbank JSC – Agreement for
non-revolving credit facility of KZT3bn
with the fixed rate of 4.5% for 4 years.
New Loans in 2013
2
• As a result of early redemption of
bonds, the saving will be about
KZT2.9bn annually starting from 2014.
Total cumulative saving of financial
expenses, including the redemption
fee, will be about KZT15.3bn till the end
of bonds‟ maturity (30.10.2019)
Saving of financial expenses
3
Dynamics of Debt, in KZT m Structure of the Debt Capital as of 31.12.2013, in KZT m
6
CAPITAL EXPENDITURES
37 486
4 924
1 442
8 772
10 646
63 270
42 045
4 192
1 271
11 212
2 783
61 503
0 10 000 20 000 30 000 40 000 50 000 60 000 70 000
Telecommunications networks
Information technologies
Group of general and administrative
expenditures
Subsidiaries
Others
Total
2012 2013
Description
• The top-priority goal of
Kazakhtelecom‟s investment
policy is further development
of the Company‟s principal
asset, i.e. the high-speed
telecommunications network,
using latest technologies and
equipment.
• As a part of implementation of
such large-scale projects as
construction of FTTH networks
and implementation of
LTE/GSM networks,
Company‟s CAPEX budget will
be more significant in 2013 -
2014. In subsequent years the
Company is planning to
reduce investments that will be
mainly aimed at implementing
new commercial investment
projects.
Budget of capital expenditures, in KZT m
LARGE INVESTMENT PROJECTS
• Budget: KZT11 106m
• Meeting the demand for telecom services in rural areas due to the prompt launch of the wireless telecom network with
voice and data communication by using EVDO technology. Period of implementation: 2012-2015
Upgrade and
development
of
CDMA/EVDO
rural
networks
• Budget: KZT86 664m
• Provision of the high-speed wireless broadband services by constructing 4G network of LTE standard on the basis of
АLTEL JSC. Period of implementation: 2012-2021
Implementati
on of
LTE/GSM/UT
MS networks
in 2012 –
2021
• Budget: KZT65 101m
• Fundamental change in the technology of the “last mile” construction for provision of the high-speed Internet access
services in Astana and Almaty and regional centers. Period of implementation: 2011-2014
Construction
of FTTH
network
• Budget: KZT10 873m
• Meeting the existing and potential demand for telecom services due to implementation of Pay TV services and providing
bundled telecom services.
Implementati
on of IP TV
7
Дивидендная политикаDIVIDEND POLICY
• Dividends equal maximum of :
- 15% * Net income = KZT Х
- % of dividends determined according to the level of
Company‟s financial performance * Net income – Own
investments in the projects approved by the Investment and
Innovation Committee of the Fund – R&D Investments =
KZT ХХ
Calculation of Minimal Dividends
• The bigger amount of dividends, the bigger financial stability‟s
safety margin and vice versa.
• The amount of dividends is reduced by the amount of
Company‟s own investments in the projects approved by the
Investment and Innovation Committee of the Fund.
• The amount of dividends is reduced by the amount of
investments in research and development (R&D).
• The minimum amount of dividends is 15% of the Company „s
net income.
Amount of Dividends
8
1H 2013 and a part of
retained earning of
past years
422.09 528.731328.8
18720.03
2603.09
2009 2010 2011 2012 2013
• The objective of the Dividend Policy of Kazakhtelecom JSC is to secure balance of interests between the Company and shareholders,
predictability and transparency in determining the amount of dividends, the terms and procedure of payment thereof.
• The amount of dividends to be paid out depends on the financial and economic performance of Kazakhtelecom JSC that is determined
on the basis of financial sustainability and liquidity indicators. The procedure and order of payment of dividends and the order of
settlements with shareholders on outstanding dividends is regulated by the Dividend Policy.
• A decision on the amount of dividends is taken by the General Shareholders Meeting of Kazakhtelecom JSC.
Payment of dividends for the last 5 years (in KZT per share)
Including:
1Q 2012 - KZT18 559.27
2-4Q 2012 - KZT161.03
9
CREDIT RATINGS
In 2013, in cooperation with the
rating adviser (Gazprombank) the
Company worked under
implementation of the approved
Action Plan to maintain Company‟s
credit rating.
Annual meetings of the
Management Board of
Kazakhtelecom JSC and
management of ALTEL JSC with
analysts of international rating
agencies Standard&Poor‟s and
Fitch Ratings were organized.
As a result of success of the
adopted rating maintenance
strategy, the Company achieved
stabilization of its credit ratings.
• Credit rating outlook was improved («ВВ») from «Negative» to «Stable»
(10.01.2014)
• Company‟s credit rating was confirmed being of the same level («ВВ»,
Stable)
DEVELOPMENT OF LTE SERVICES
10
Mobile network of the forth generation (4G LTE), which allows creation of more convenient, user-friendly, simple and cost-
saving conditions for subscribers for using high-speed mobile Internet access for business, entertainment, chatting,
learning and whole range of opportunities offered by the global network, was launched in December 2012 under the brand
«ALTEL 4G» in Astana and Almaty on the basis of ALTEL JSC.
During 2013 4G mobile Internet service became available in the following
cities:
Aktau
Aktobe
Atyrau
Karaganda
Ust-Kamenogorsk
Shymkent
As well as in the following satellite cities of Almaty:
Kapchagai
Kaskelen
Esik
Talgar
1 770
94 843
2012 2013
Active subscriber base as of the end of the period
In 2014 it is planned to continue the launch of LTE network in the cities with population of 50 thousand people and more.
PAY TV
Number of access points
20132012
1 770
4 802
2012 2013
Revenue, KZT m
171.2%
65.8%
During the year the Company demonstrated the highest growth rate in Pay TV segment keeping far ahead of
the growth rates of this market in general.
Within 2 years Kazakhtelecom JSC has become the third player in this market segment with the market
share of 11.2%.
Projected stable growth of ID TV segment in the Company‟s revenue structure during 2013-2018.
This service provides subscribers with the interactive service, which allows subscribers to chose content by
themselves and manage TV service as they wish.
1
2
3
4
11
12
DEVELOPMENT OF THE BACKBONE NETWORK
Description
• In 2013, telecommunication
networks„ joint of
Kazakhtelecom JSC and
Turkmentelecom NTC was
organized
• DREAM project was launched
jointly with MegaFon. The first
high-speed channel with the
capacity 10 Gbps in the
direction from Europe to China
was sold.
• Joints with Rostelecom OJSC
and TransTeleCom JSC were
expanded.
• Transit flows increased
significantly from 21.8 Gb in
2012 to 35.5 Gb in 2013 (in 1.6
times)
• Also, from 2012 till 2013
connections to external
Internet resources were
expanded in 1.6 times from
230 Gb to 360 Gb accordingly
TurkmenistanUzbekistan
Kyrgyzstan
China
RussiaRussia
China – 3 Russia – 6 Kyrgyzstan – 5
Uzbekistan – 2 Turkmenistan – 1
Total number of joints – 17, including:
THANK YOU FOR ATTENTION!
Manager of the Project Finance Department
Mr. Asset Shakhanov
Tel: +7 (727) 258-11-75
E-mail: [email protected]
Contacts: