MTS: report for 2021, dividends, announcement of a new buyback, forecasts for 2021.

MTS Group published on Thursday, March 4, financial and operating results for the 4th quarter and the entire year 2021. Revenue in the 4th quarter increased by 7.4% year-on-year to 133.7 billion rubles. The group's adjusted OIBDA increased by 1.3% YoY to RUB 52.5 billion. Adjusted OIBDA margin was 39.3% versus 41.7% a year earlier.

In Russia, MTS revenues increased by 6.8% year-on-year to 131.9 billion rubles. Adjusted OIBDA increased by 0.1% to RUB 51.4 billion. The OIBDA margin was 38.9%. The subscriber base in Russia grew by approximately 230 thousand users to 78.5 million subscribers. The total number of MTS salons decreased by 7.7% - to 5,244 salons. At the same time, revenue from online sales in the fourth quarter grew by 136% year-on-year. MTS Bank brought the group 9.3 billion rubles in revenue - the figure increased year-on-year by 2.5%. Revenue from system integration services increased by 56.7% and reached 3.3 billion rubles.

Commentary "Opening Research"

Alexey Pavlov, PhD, chief analyst at Otkritie Broker for the Russian market:

“The positive dynamics of financial results in the fourth quarter was primarily due to an increase in income from mobile and fixed communications, as well as due to an increase in sales of goods. Thus, revenue from mobile services increased by 6.4% to 87.1 billion rubles, revenue from fixed communications added 5.3% year-on-year to 15.8 billion rubles, and sales of goods jumped by 17.5% to 22.5 billion rubles. At the same time, since MTS shares have a history of dividends for a long time, management’s initiative to recommend increased payments this year is certainly positive for the stock.”

We have a current idea to buy MTS shares, the target is 353 rubles.

Technical analysis: MTS (MTSS)

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Dividends

Management in 2021 will recommend dividends above 29.5 rubles to the board of directors. per share paid in 2021 (excluding special dividends).

In November 2021, MTS completed the payment of interim dividends for the first half of 2021 in the amount of 17.84 billion rubles. The amount of dividends per one ordinary share of MTS was 8.93 rubles (17.86 rubles per depositary receipt).

For the entire 2021, the total amount of dividends was 29.50 rubles per ordinary share (59.0 rubles per receipt). The total payment amounted to RUB 58.9 billion, in addition to special dividends paid in the first quarter of 2021 in the amount of RUB 13.25 per ordinary share (RUB 26.50 per depositary receipt).

Dividends on MTS JSC shares in 2021 - size and register closure date

Home → Dividends→ MTS shares - forecast, payment history

A table with the complete history of dividends of MTS JSC, indicating the amount of payment, the date of closure of the register and the forecast:

*Note 1: The Moscow Exchange operates on the T+2 trading system. This means that settlements for buying and selling shares occur within 2 business days. Therefore, to be included in the register of shareholders and receive dividends, you must be a shareholder 2 days before the cutoff.

*Note 2: Exact payout date varies by broker and issuer. The predicted closest date for the receipt of dividends to the brokerage account for MTS-JSC: July 21, 2021.

Total dividends of MTS shares by year and changes in their size compared to the previous year:

The amount of dividends paid by MTS for the entire period is 351.86 rubles.

Average amount for 3 years: 33.8 rubles, for 5 years: 30.68 rubles.

DSI indicator: 0.86.

You can buy MTS shares with minimal commissions from stock brokers: Finam and BCS. Free deposits and withdrawals. Online registration.

Dividend policy:

The dividend policy was adopted in March 2021. The minimum payment for the year is set at 28 rubles per share. Div.policy is in force until 2022.

Brief information about the issuer Mobile TeleSystems PJSC

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Calendar with upcoming and past dividend payments

View full calendar for 2021 »

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Share buyback

MTS may soon announce the launch of a new share repurchase program, the company's vice president for finance, Alexey Kamensky, said at a conference call with investors and analysts dedicated to its 2021 financial results. The implementation of a buyback program is generally positive for the shares of any company that has made such a decision, since liquidity increases and a stable player appears on the demand side, which supports quotes. Further, in the event of cancellation of the repurchased stake, the amount of earnings per share increases.

MTS carried out several buybacks. The last time such a program started was on March 31, 2021 for a year and, according to its terms, the buyback should not exceed 15 billion rubles. But already at the beginning of December 2020, MTS completed the buyback. Let us recall that the largest shareholder of MTS is AFK Sistema - taking into account indirect participation through controlled entities, it owns 56.8% of the shares. 43.19% of MTS shares are in free float.

Dividends paid by MTS

This table shows all the latest dividend payments of MTS separately: 1 line - 1 payment decision. Ticker date T-2 cut-off date Year Dividend period, rub Share price Div. yield MTSS 10/08/2020 10/12/2020 2021 Q2 8.93 334.65 2.7% MTSS 07/07/2020 07/09/2020 2021 Q4 20.57 338.05 6.1% MTSS 01/08/2020 10.0 1.2020 2021 3 quarter 13.25 328.15 4.0% MTSS 10/10/2019 10/14/2019 2021 Q2 8.68 272.75 3.2% MTSS 07/05/2019 07/09/2019 2018 Q4 19.98 284.95 7.0 % MTSS 10/05/2018 10/09/2018 2021 Q2 2.6 275.1 0.9% MTSS 07/05/2018 07/09/2018 2021 Q4 23.4 288 8.1% MTSS 10/11/2017 10/13/2017 2021 Q2 10 .4 291.95 3.6% MTSS 07/06/2017 07/10/2017 2021 Q4 15.6 237.55 6.6% +add dividends All dividends Buy shares

Stock dynamics

MTS shares, taking into account trading in the evening session on Thursday, rose in price by the end of the day by 1.01% to 319 rubles. The growth occurred at a higher volume relative to the average values. For the first time since February 17, quotes tested the strength of resistance in the form of the 100-day moving average line, but have not yet been able to overcome it (324.86 rubles current value). There are currently 8 “buy” recommendations, 4 “hold” recommendations, 0 “sell” recommendations, according to data in the Bloomberg terminal. The 12-month consensus target is RUB 392.01, which implies an upside of more than 21% from Thursday's close.

Is it worth taking MTS for dividends in 2021?

MTS has already released a report for the 1st quarter of 2021, so we can assess the consequences of the pandemic for the telecom. I would like to note that MTS survived the crisis quite well.

Firstly, all telecoms generally performed well, as more people began to spend time at home, communicating on the Internet and by phone.

Secondly, MTS has a fairly diversified business: it not only provides communication services, but also sells phones and accessories, MTS Bank issues loans, and Sistema Capital makes money on commissions through mutual funds. In general, there is not only telecom and digital, but also banking and investment activities.

Thus, for the 1st quarter of 2021, revenue amounted to 119.6 billion rubles, which is higher than the same period last year – then MTS earned 109.8 billion rubles. Net profit also increased – to 17.9 billion rubles against 17.8 billion rubles.

In general, if you look at the dynamics of financial results, you can see that the company’s revenue and net profit remain at approximately the same level from year to year (the exception is 2021, but there is a gigantic fine in the Uzbek case, and the payment of dividends is, basically had no effect).

MTS has a large margin of safety to pay dividends in the declared amount even with large expenses. In addition, AFK Sistema needs dividends from its subsidiaries, so MTS cannot help but pay dividends even if it wants to.

Looking at the statements, you might think that the company's debt load is growing. Thus, in 2021, long-term liabilities increased sharply from 270 billion to 542 billion rubles, and by the 1st quarter of 2021 they grew to 559.7 billion rubles. Now the majority of MTS capital consists of debts.

You might think this is bad, but it's not.

In fact, in 2021, MTS increased its stake in MTS Bank to a controlling stake and began to take into account all its assets, liabilities and results of its activities in the company’s general reporting.

What are liabilities for a bank? That's right - deposits of legal entities and individuals. For a bank, loans are assets and deposits are liabilities.

In fact, if you isolate from the reporting the results of the work of only the telecommunications company MTS, then there will be stable indicators.

By the way, due to the large share of bank liabilities in the consolidated statements of MTS, there is no point in calculating the P/S and P/B multipliers - they will be distorted. According to them, it turns out that MTS is fundamentally overvalued, although the valuation of the telecom itself, excluding the banking business, is quite average.

In general, MTS is a mature and stable company that has occupied a strong niche among telecoms and is developing its own ecosystem (read: secondary businesses) rather than its main direction. Most of the profit comes from subscription fees, i.e. In fact, a subscription business model is being implemented - this is the most sustainable model in a crisis, since people do not stop using subscriptions.

During quarantine, digital services SmartMed and Smart Education, cloud technologies, and big data were in high demand. This segment is the fastest growing in the MTS ecosystem. At the end of the quarter, it provided about 2.5 billion rubles. revenue growth. In the future, we can expect that the direction will continue to develop, ensuring further growth of the group’s business.

There are other growth points - the introduction of the 5G format, expansion into foreign markets, consolidation with other operators (or their absorption). And, of course, the development of related businesses – banking and investment. All this gives confidence in the stability of the company and the promised dividends.

So MTS can be conditionally considered a quasi-bond. Well, or a conservative dividend blue chip.

Another argument in favor of buying MTS in 2021 with dividends is an active buyback. The company plans to spend about 15 billion rubles on the buyout.

However, I will also note certain risks that must be taken into account when investing in MTS:

• Dependence on the AFK System. This seems to be a plus (you can safely expect big dividends + The system will support its daughter if something happens), but also a minus. There are risks that AFK Sistema will squeeze all the juice out of MTS, like Rosneft from Bashneft (although Yevtushenkov manages his business quite wisely). A developed business like MTS needs to invest more to achieve a breakthrough - and dividends remove capital from the company. On the other hand, MTS breakthroughs are of no particular use.
• Cancellation of roaming in Russia. This affected the commissions that MTS received as additional income from subscription fees.
• People began to travel less. Revenue from foreign roaming decreased, which was also reflected in the reporting. As a result, MTS does not receive part of its usual profit. When foreign travel resumes, this income item will return to its previous level.
• Strong competitors. The subscriber base is already divided between the main competitors - MTS, Beeline, Tele2 and Megafon. The same Tele2 was bought by Rostelecom and the provider will actively promote it. In short, there are simply no growth points in the domestic market, but there is fierce competition.
• Difficult situation in the banking sector. The crisis in the banking sector is still awaiting us, and the operating results of MTS Bank will affect the operating results of the entire Group.
• The MGTS subsidiary is in a rather difficult financial situation and has not paid dividends at all this year, and if MTS consolidates it, it will accumulate debt.

But in general, most of the disadvantages are due to the specifics of a developed business and are generally characteristic of a significant number of companies of this level. But the impact of the pandemic is temporary, and investors understand this. Perhaps this is why, after the March fall, MTS recovered faster than the market.

How to buy MTS shares for an individual and receive dividends?

As stated earlier, all interested individuals and legal entities can gain access to securities trading. To do this, you initially need to have a certain amount that will be required to purchase a certain number of shares on the stock exchange or from official representatives. The larger the final package of securities, the higher your profit on the final deductions from dividends. If you have not previously encountered this issue, it is strongly recommended that you seek information in the relevant news sections, where you can read recommendations for the greatest efficiency from trading.