{"id":6340,"date":"2016-07-21T08:02:00","date_gmt":"2016-07-21T08:02:00","guid":{"rendered":"https:\/\/investors.kcell.kz\/?p=6340"},"modified":"2023-12-15T08:04:47","modified_gmt":"2023-12-15T08:04:47","slug":"kcell-in-the-first-half-of-the-year-to-maximize-all-opportunities-to-drive-value-creation","status":"publish","type":"post","link":"https:\/\/investors.kcell.kz\/?p=6340&lang=en","title":{"rendered":"Kcell in the first half of the year: to maximize all opportunities to drive value creation"},"content":{"rendered":"\n
<\/h1>\n\n\n\n
Almaty, 20 July, 2016 \u2013 Kcell Joint Stock Company (\u201cKcell\u201d or the \u201cCompany\u201d) (LSE, KASE: KCEL), the leading provider of mobile telecommunications services in Kazakhstan by market share in terms of revenue and subscribers, announces its interim results for January \u2013 June 2016.<\/p>\n\n\n\n
Second quarter<\/h4>\n\n\n\n
\n
Net sales decreased by 15.3 percent to KZT 36,413 million (42,980). Service revenue decreased by 15.1 percent to KZT 34,012 million (40,079).<\/li>\n\n\n\n
EBITDA, excluding non-recurring items, declined by 35.4 percent to KZT 14,338 million (22,184). EBITDA margin decreased to 39.4 percent (51.6).<\/li>\n\n\n\n
Operating income, excluding non-recurring items, decreased by 50.7 percent to KZT 7,914 million (16,057).<\/li>\n\n\n\n
Net finance cost increased to KZT 1,834 million (1,405).<\/li>\n\n\n\n
Net income 59.1 percent lower at KZT 4,630 million (11,319).<\/li>\n\n\n\n
Free cash flow decreased to KZT 4,534 million (11,221).<\/li>\n\n\n\n
During the quarter, the total number of subscriptions decreased by 107 thousand.<\/li>\n<\/ul>\n\n\n\n
First half<\/h4>\n\n\n\n
\n
Net sales 16.5 percent lower at KZT 71,883 million (86,064). Service revenue decreased by 15.4 percent to KZT 67,526 million (79,835).<\/li>\n\n\n\n
EBITDA, excluding non-recurring items, decreased by 36.0 percent to KZT 29,265 million (45,697). EBITDA margin was 40.7 percent (53.1).<\/li>\n\n\n\n
Operating income, excluding non-recurring items, down 48.2 percent to KZT 17,329 million (33,454).<\/li>\n\n\n\n
Net finance cost increased to KZT 2,584 million (1,687).<\/li>\n\n\n\n
Net income down 54.2 percent to KZT 11,255 million (24,553).<\/li>\n\n\n\n
Free cash flow decreased to KZT -8,960 million (14,410).<\/li>\n\n\n\n
The number of subscriptions decreased by 999 thousand from the end of the second quarter of 2015.<\/li>\n<\/ul>\n\n\n\n
\u201cThe operating environment in the first half of 2016 continued to be characterized by low price levels and macroeconomic uncertainty. However, in the second quarter we started to see some stabilization in market prices and subscriber numbers.<\/p>\n\n\n\n
Pricing pressure in the mobile market has now reduced, with the scaling back of unlimited offers and upwards adjustment of pricing at the lower end of the market. This pricing trend helped to halt the decline in subscribers we saw in the first quarter. In May and June the subscriber base stabilised whilst new tariff plans launched in early June and active promotions are now boosting subscribers slightly. Service revenues are also stable in the second quarter, compared to the first quarter of 2016.<\/p>\n\n\n\n
During the second quarter, our main focus in B2C was to achieve a turnaround from negative net intake to subscriber growth. In order to prevent churn, we introduced an affordable tariff plan, \u201cConversation\u201d, aimed at retaining low ARPU customers and attracting new customers who use feature phones or do not consume data. Initiatives introduced in the second quarter to drive takeup included the distribution of promotional packs. The steps we have undertaken have substantially reduced the company’s subscriber losses, created the conditions for market share recovery, stabilized revenue and reduced costs.<\/p>\n\n\n\n
New subscription to \u201cHello Kazakhstan\u201d was stopped and replaced with new tariff line. From mid-June, PSTN calls were excluded from our \u201cHello Kazakhstan\u201d tariff plan, in order to reduce interconnect costs.<\/p>\n\n\n\n
We continue to innovate and enhance our technology across all areas of our business. We have significantly upgraded the quality of our network in preparation for the full launch of LTE\/4G services and started to convert our customers to a new billing system to enhance efficiency and customer service.<\/p>\n\n\n\n
In May, we were proud to receive from the Kazakh Stock Exchange an award recognising our efforts in \u201cStriving towards greater transparency.\u201d We remain committed to a high level of corporate governance whilst seeking to maximize all opportunities to drive value creation, as we invest in improving our products and services to ensure that we maintain our market leading position.\u201d<\/p>\n\n\n\n
Financial highlights<\/p>\n\n\n\n
KZT in millions, except key ratios, per share data and changes<\/td>
Apr-Jun2015<\/td>
Apr-Jun2014<\/td>
Chg(%)<\/td>
Jan-Jun2015<\/td>
Jan-Jun2014<\/td>
Chg(%)<\/td><\/tr>
Net sales<\/td>
42,980<\/td>
48,035<\/td>
-10.5<\/td>
86,064<\/td>
92,142<\/td>
-6.6<\/td><\/tr>
of which service revenue<\/td>
40,079<\/td>
46,904<\/td>
-14.5<\/td>
79,835<\/td>
91,011<\/td>
-12.3<\/td><\/tr>
EBITDA excl. non-recurring items<\/td>
22,184<\/td>
27,536<\/td>
-19.4<\/td>
46,001<\/td>
53,208<\/td>
-13.5<\/td><\/tr>
Margin (%)<\/td>
51.6<\/td>
57.3<\/td>
<\/td>
53.4<\/td>
57.7<\/td>
<\/td><\/tr>
Operating income<\/td>
16,057<\/td>
21,033<\/td>
-23.7<\/td>
33,432<\/td>
40,888<\/td>
-18.2<\/td><\/tr>
Operating income excl. non-recurring items<\/td>
16,057<\/td>
21,238<\/td>
-24.4<\/td>
33,759<\/td>
41,093<\/td>
-17.8<\/td><\/tr>
Net income attributable to owners of the parent<\/td>
Almaty, 20 July, 2016 \u2013 Kcell Joint Stock Company (\u201cKcell\u201d or the \u201cCompany\u201d) (LSE, KASE: KCEL), the leading provider of mobile telecommunications services in Kazakhstan by market share in terms of revenue and subscribers, announces its interim results for January \u2013 June 2016. Second quarter First half \u201cThe operating environment in the first half of …<\/p>\n