Mobile TeleSystems Public Joint Stock Company

Management did not read out a full set of reported Q2 numbers on the call, but it did state that connectivity revenue was up 4.2%, that MTS spent RUB 60 billion in CapEx over the last six months, and that the company paid a RUB 33.85 per share dividend totaling RUB 48.2 billion including quasi-treasury shares. It also said half-year free cash flow was reduced by RUB 20 billion, largely due to higher interest expense and higher CapEx, and that retail reached standalone OIBDA breakeven earlier than planned. Forward-looking, management reiterated that 2022 CapEx will be lower than 2021 and said no further dividends will be paid this year beyond the already completed payout.

The CEO’s message was that MTS passed a difficult quarter without losing strategic momentum. He emphasized telecom as the core resilience engine, pointed to strong execution on network procurement and swap programs, and said the company is better prepared now than during earlier traffic shocks. He also framed the business as moving toward a customer-centric holding company, with more independent verticals and greater use of board-level governance and incentives.

The CFO said the quarter was pressured by provisions in MTS Bank, describing them as a higher cost of risk that peaked in Q2. He said the first-half loan portfolio was essentially flat, credit demand is recovering in July and August, and some subsidy benefits have not yet been recognized but should flow through in Q3. On capital and cash, he said MTS spent RUB 60 billion in CapEx over six months, reiterated that 2022 CapEx will be below 2021, and noted that free cash flow was also affected by changed import payment terms that forced more prepayments. He also confirmed the RUB 33.85 per share dividend was paid and that the unpaid ADR-related amount remains on the books as a liability until conversion.

Analysts pressed on the NYSE delisting, the new strategy, tower sale plans, bank provisions, dividend policy, negative equity, Eurobond servicing, regional network upgrades, and ADR conversion mechanics. Management said the delisting was driven by regulatory requirements, that tower asset sales remain possible only if an attractive offer appears, and that bank provisions were regulatorily driven rather than reflecting major recent NPL deterioration. On dividends, management said the company already paid everything planned for 2022 and will not pay more this year, while on Eurobonds it said coupon obligations were met by transferring money to the payment agent even though funds did not reach all investors because of current settlement constraints.