Revenues of Russian operator Megafon dropped by 3.9 percent year-on-year to RUB 86.5 billion in the third quarter of this year, hurt by lower roaming and equipment sales. OIBDA grew by 2.3 percent over the same period to RUB 39.9 billion, driven by cost reductions, and net profit totaled RUB 13.1 billion, up from RUB 3.2 billion a year earlier thanks to lower financing costs and hedging gains. 

Capital expenditure totaled RUB 11.0 billion, down by 5.5 percent. The net debt was RUB 311.2 billion at the end of September, down by RUB 16.3 billion in the past year.

Megafon said its service revenue fell 1.0 percent to RUB 78.1 billion, an improvement from the previous quarter on the back of higher mobile data and digital revenue. This was offset by falling international roaming revenue due to border closures.

With lockdown lifted in a number of regions in July-September, Megafon shops began to gradually reopen, although consumer spending has not yet returned to pre-lockdown levels despite a positive quarter-on-quarter trend. Revenue from sales of equipment and accessories fell by 23.9 percent to RUB 8.4 billion. The total number of visitors to MegaFon stores was down by 24 percent.

Cost management efforts helped to offset the negative impact of falling revenue. Megafon increased its OIBDA as a result of a reduction in sales of low-margin equipment and cuts in advertising budgets and general expenses.

The company invested heavily in supporting stable network operation and expansion in the face of increased network load. The reduction in capital expenditure occurred mainly due to the postponement of non-critical projects not related to network quality. In July-September, the number of base stations grew by 6.8 percent to 192,000, including more than 22 percent growth in LTE, with approximately 3,000 new base stations being added in LTE and LTE Advanced standards alone.