Russian electronic payment system Qiwi reported a 12% year on year decline in net revenues in 2Q21 under IFRS to RUB6bn, due to high base on discontinuation of Sovest and Rocketbank subsidiaries. Otherwise, Qiwi managed to increase the payments segment revenues by 5% y/y versus the 10% decline seen in 1Q21.

As followed by bne IntelliNews, previously the analysts have started to re-initiate coverage of Qiwi's shares, arguing that the regulatory risks that have rocked the company since the end of 2020 are now priced in.

Qiwi is facing strong regulatory headwinds in the online betting segment, the main revenue stream of the company. The capitalisation of the company dropped as the CBR limited the foreign operations of Qiwi Bank as part of the regulator's crackdown on online gambling.

But in 2Q21 the hit from CBR restricting foreign transactions was offset by strong performance in betting revenue helped by Euro football cup this summer and favorable comparison base, BCS Global Markets commented.

Qiwi was also helped by a product offering for the self-employed, increase in peer-to-peer operations, and money remittances via Contact money transfer service.

As a result, Qiwi maintained a flat EBITDA at RUB3.9bn with 64% margin, and had net income slip only by 2% y/y to RUB2.7bn with 45% margin. The company also continued to pay dividends and set $0.3 dividend per ADS (American Depository Receipt) for 2Q21, making a 3% dividend yield.

Qiwi also slightly upgraded the 2021 guidance for net revenue guidance (down 10-20% versus previous 15-25%), but maintained adjusted net profit guidance unchanged (down 15-30%). BCS Global Markets maintained a Hold call on Qiwi's shares, while noting that uncertainty remains in the betting segment in 3Q21 and beyond.

While the restriction ruling of the CBR expired in June 2021 and Qiwi started to onboard foreign merchants, the changed regulatory environment and customer behavior does not allow Qiwi to estimate potential pace of recovery (if any).

There is also no new information on the law for single state payments agents in betting, while the new structure should be in place as early as by the end of September.

 

QIWI 2Q21 IFRS Review

 

 

 

 

 

 

 

 

 

 

 

 

2Q20

3Q20

4Q20

1Q21

2Q21

Q/Q

Y/Y

BCS

Act v BCS

Cons-s

Act v Cons-s

Net revenue

6.84

6.64

6.24

5.16

6.05

17%

-12%

5.98

1%

6.00

1%

Adj. EBITDA

3.91

4.02

3.61

2.82

3.85

37%

-1%

3.68

5%

3.69

4%

Adj. net income

2.76

3.28

2.52

2.03

2.70

33%

-2%

2.63

3%

2.64

2%

EBITDA margin adj.

57%

61%

58%

55%

64%

9ppts

7ppts

62%

-

62%

-

Net margin adj.

40%

49%

40%

39%

45%

5ppts

4ppts

44%

-

44%

-

DPS, $

0.33

0.34

0.31

0.22

0.30

36%

-9%

 

 

 

 

Sector Highlights

2Q20

3Q20

4Q20

1Q21

2Q21

Q/Q

Y/Y

BCS

BCSe v Act

Cons-s

Cons-s v Act

Payments revenue, Rb mn

5.40

6.11

5.81

4.76

5.68

19%

5%

-

-

-

-

Payments net income adj, Rb mn

3.24

3.63

2.68

2.48

3.04

23%

-6%

-

-

-

-

Payments net margin adj

60%

59%

46%

52%

54%

1ppts

-7ppts

-

-

-

-

Note: Interfax consensus is based only on 3 brokers' forecasts
Source: Qiwi, Interfax, BCS

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