26.07.2019

Kcell showed an increase in all major indicators in Q2 2019

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Kcell JSC, leading mobile operator in Kazakhstan, reported its results for Q2 2019. The company’s new management demonstrated breakthrough results during the quarter and showed an increase in service revenue over the past 5 years.

“I am pleased to inform that we achieved breakthrough results in the second quarter, our operating and financial indicators began to stabilize establishing a strong basis for future growth. For the first time in five years, we were able to halt the negative trend in service revenue and demonstrate a significant increase of 6.7% compared to Q2 of last year. Total revenue in the second quarter increased by 4.3% which is the largest increase since 2013. It is important to note that these results were achieved under the leadership of the new management team” – said Kaspars Kukelis, CEO and Chairman of the Management Board of Kcell JSC.

The second quarter financial performance was also underpinned by the successful implementation of our strategy to transition from “quantity to quality”. Churn from low ARPU subscribers has resulted in a shift in the subscriber base from 10.1 million at the end of the June 2018 to 8.7 million higher ARPU, more profitable customers. In the second quarter, blended ARPU rose by 21% to KZT1309 following a 9.5% increase in Q1 2019. This was primarily driven by the number of subscribers now opting for bundled offers, which now stands at almost half of Kcell’s entire subscriber base. A substantial increase in ARPU was last seen in 2014.

“The Super Comfort tariff, with unlimited social network access, has proved extremely popular and just four months since its launch it now accounts for 33% of Kcell’s subscriptions to bundled offers. Higher pricing levels for this tariff have also driven ARPU growth.

During the second quarter, B2B revenue has shown a further increase, and rose by 19.5% year-on-year, on the back of increased revenues from business solutions. The B2B share of total revenue now amounts to 12%” – noted Kaspars Kukelis.

EBITDA (excluding IFRS 16) rose by 35.6%, due to substantial revenue growth and a tight focus on cost analysis, control and optimization on the part of new management. Net revenue rose by 156.8% to KZT 2 870 million (К2 2018: 1 118). Revenue growth during the quarter was primarily driven by improved pay as you go (PAYG) billing for bundled offers, the introduction of new tariff plans with unlimited access to social media, and an increasing number of subscribers transitioning to the tariff plans offering more content.

In the second quarter, data revenue increase by 14.4% to KZT12.443 million (К2 2018: 10 873), data traffic rose by 30.7% to 74.2 petabytes (PB) (К2 2018 56,8 PB).