vk.com/id446425943

Russia

Equities

Earnings Watch

Telecoms & Conglomerates

Figure 12: 1W post-results performance relative to RTS since earnings release vs. EBITDA surprise

1%

VEON

MBT

MTS (-2.6%) beat consensus on revenue and EBITDA by +3% and +4%, respectively, but the company posted a net loss as it made provisions on potential claims.

VEON (in line) beat consensus on revenue by +4%, but met it on EBITDA.

Rostelecom (-3.0%) beat consensus on both EBITDA and net income by +9% and +21%, respectively.

Sistema (+1.7%) revenues exceed the Street expectations by +2%

vk.com/id446425943

Russia

Equities

Mikhail Shlemov, Equities Analyst +7 495 663 47 01 // mikhail.shlemov@vtbcapital.com

Svetlana Aslanova, Equities Analyst +7 495 663 47 88 // svetlana.aslanova@vtbcapital.com

Earnings Watch

Financials

Figure 13: 1W post-results performance relative to RTS since earnings release vs. net income surprise

3%

Source: Bloomberg, Interfax, Company data, VTB Capital Research * VTB capital forecasts

Sberbank (+2.5% vs. RTS) earnings of continuing operations were RUB 217bn (+0.4% YoY, ROE 24.2%), +7% ahead of consensus, with rouble volatility in 3Q18 supporting NIM and trading income. NIM fell only -5bp to 5.75% (Sberbank’s calculation), which came as a positive surprise given the, i) earlier reported RAS NIM contraction of over - 30bp, and ii) 40bp negative corporate yield compression in 3Q18.

TCS (-0.9%) earnings totaled RUB 7.3bn, 11% above consensus. The outperformance vs. the consensus came from lower than expected opex and LLP. Management increased its guidance for FY18 for earnings to over RUB 26bn from over RUB 24bn before; the consensus forecast is RUB 25.8bn (BBG, 26 November). However, the stock underperformed the benchmark as the stock rallied ahead of results.

Bank St. Petersburg (+1.6%) attributable earnings of RUB 2.0bn, which implied 11.3% ROE. The bottom line was +2% above consensus forecasts on a higher than expected operating result.

Moscow Exchange (in line) earnings came broadly in line with the Street expectations. However, EBITDA was only -1% below the forecasts, with both F&C income and NII falling below expectations.

vk.com/id446425943

Russia

Equities

Vladimir Sklyar, Equities Analyst +7 495 589 21 62 // vladimir.sklyar@vtbcapital.com

Anastasia Tikhonova, Equities Analyst +7 495 660 42 18 // anastasia.tikhonova@vtbcapital.com

Earnings Watch

Utilities

Figure 14: 1W post-results performance relative to RTS since earnings release vs. EBITDA surprise

Source: Bloomberg, Interfax, Company data, VTB Capital Research * VTB capital forecasts

InterRAO (-4.5% vs RTS) beat consensus on 3Q18 EBITDA and net income by +14% and +12%, respectively. InterRAO yet again managed to deliver double-digit profit growth, reporting a +29% YoY increase of EBITDA and a +34% YoY jump in net income. However, management’s inability to guide where its cash pile will be allocated put negative pressure on the stock. In addition, management yet again reiterated the 25% payout from IFRS net income. As a result, the stock underperformed the benchmark by -4.5% WoW since earnings release.

Unipro (+0.5%) missed our expectations on 9mo18 EBITDA and net income by -6% and -7%, respectively. Along with a revenue reduction of -2% YoY, with the support of the delta DPM, adjusted EBITDA fell -52% YoY or by 1.5%, excluding the effect of insurance. Net income declined -62% YoY.

Enel Russia (-1.2%) quarterly IFRS numbers came significantly below consensus expectations on EBITDA and net income (-25% and -38%, respectively). However, 9mo18 results met with forecast and they were expectedly weak, with stock underperforming the benchmark -1.2% WoW since announcement.

Mosenergo (-4.4%) EBITDA was -8% lower YoY, and +2% above our estimates due to slightly better costs. The bottom line slid 17% YoY to RUB 14,045mn and in 3Q18 Mosenergo reported net losses of RUB 1,157mn. As a result, the stock underperformed the broader market.

OGK-2 (-0.3%) beat our forecasts on 9mo18 EBITDA and net income by +3% and +5%, respectively. OGK-2 strolls across the profitability plateau which is due to last until modernisation kicks in.

TGK-1 (+0.4%) came above our estimates on 9mo18 EBITDA and net income by +5% and +7%, respectively. 9mo18 numbers were another set of financials to show decent profitability growth. The company’s top line was RUB 63,494mn, up 6% YoY on the production results, export operations and capacity payments.