Artem Mikhaylin, an analyst at the investment company

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Russian PJSC Mobile TeleSystems (MTS), which provides telecommunications, digital and media services, published financial results for nine months (from January to September) and the third quarter of 2023.

MTS revenue for the first nine months of 2023 amounted to RUB 446 billion. This is 12.2% more than for the same period in 2022 - RUB 397.4 billion. The company's revenue for Q3 2023 amounted to RUB 159.7 billion versus RUB 137.7 billion in Q3 last year.

The company's net profit for the first nine months of 2023 showed an increase of 41.8% compared to the same period in 2022 and reached RUB 38.5 billion. However, in Q3 2023, there was a decrease in the indicator - RUB 9 billion against RUB 12.3 billion in Q3 2022. Company representatives explain this by an increase in financial expenses amid rising interest rates and an increase in depreciation with ongoing investments in the network and the development of the ecosystem.

Of all MTS business areas, the Fintech sector showed the best results. Revenue in Q3 2023 increased by 26.2% and amounted to RUB 23.6 billion. Net profit in Q3 2023 reached a record level of RUB 5.1 billion, or RUB 10.9 billion for the first nine months of 2023.

Revenue from communication services in Russia in Q3 2023 increased by 7.4% to RUB 112.4 billion due to an increase in revenue from basic and digital services in the B2C and B2B segments. The subscriber base increased to 80.8 million subscribers.

Veles Capital, explained the latvia whatsapp number database reasons for the growth of many indicators in various segments of the company: “MTS revenue for Q3 2023 increased by 16% compared to Q3 2022 and exceeded our forecast. The growth rate was higher in almost all major business segments. In the communications segment, revenue increased by 7.4%, which is roughly comparable to the results of Q2 2023. This growth is due to both improved operational metrics and tariff indexation in September 2022 and in 2023. The number of ecosystem subscribers increased to 14.2 million, and by the end of the period they generated almost 50% of B2C revenue. B2B segment revenue grew by 20% and supported the performance of communications services. There was a slight increase in the subscriber base both quarter-on-quarter and year-on-year, but the indicator will probably normalize in the future periods. Advertising revenue increased by 50% year-on-year, driven by growth in the number of clients and average check. Advertising revenue growth continued to gradually accelerate and was higher than in the previous two quarters of 2023."

Leonid Delitsyn, an analyst at FG Finam, suggested which areas of MTS’s business will be the most promising by the end of 2023 and in 2024: “We will call advertising technologies the most promising, because they have high growth rates. But they have little impact on the final result. The key and major growth area of ​​the MTS ecosystem is its bank, which can even be called a neobank, at least it compares favorably with many more traditional ones. The restoration of retail cannot be called a promising area, but it can have a very strong impact on the final result of 2023. And the main influence on the final result is, of course, the growth of revenue from telecommunications services. It may seem unpromising, because new communication standards will replace current ones. But the subscriber base of 80 million people is satisfied with the company's services, and when new standards come, this base will prefer to receive services from the current operator. However, what the rules of the game on the market will be in the era of new standards, no one has yet knows."

Freedom Finance Global analyst Vladimir Chernov placed his bets on MTS's advertising business: "In 2024, we expect high revenue growth rates from the company's advertising business (Adtech) due to the large growth of the client base against the background of the low base effect of previous years and the opening in October 2023 of the possibility of launching advertising in Telegram Ads on external data with targeting by phone numbers of Russian operators."