QIWI plc (QIWI) Reports Q4 EPS of $0.17

QIWI plc (NASDAQ: QIWI) reported Q4 EPS of $0.17. Revenue for the quarter came in at $101 million.

Fourth Quarter 2019 Operating and Financial Highlights

• Total Adjusted Net Revenue increased 7% to RUB 6,253 million ($101.0 million)
• Payment Services Segment Net Revenue increased 16% to RUB 5,487 million ($88.6 million)
• Adjusted EBITDA increased 9% to RUB 1,609 million ($26.0 million)
• Adjusted Net Profit increased 15% to RUB 1,168 million ($18.9 million), or RUB 18.74 per diluted share
• Payment Services Segment Net Profit increased 3% to RUB 2,652 million ($42.8 million) or RUB 42.55 per diluted share
• Total Payment Services volume increased 22% to RUB 400.5 billion ($6.5 billion)

“Today, I’m glad to present our fourth quarter and full year 2019 financial results and share several operating highlights with you. In 2019, we demonstrated outstanding performance, especially in our Payment Services business, which delivered 27% segment net revenue and segment net profit growth year over year. The performance of our payment services business was driven predominantly by the expansion and enhancement of the product proposition we offer to our users, merchants and partners underpinned by the secular trends in our key markets, the latter, however, have started to decelerate towards the end of the fourth quarter of 2019. This year we have processed close to 1.5 trillion rubles in cash and electronic payments, increasing our turnover by almost one third. I believe, this is an impressive achievement and would like to thank our entire team for their contribution. Our results clearly emphasize the value and relevance of the payment ecosystem we have developed so far and aim to develop further,” said Boris Kim, QIWI’s chief executive officer. “At the same time, we see many challenges ahead, primarily resulting from the recent pandemic coronavirus outbreak that affects some of our key categories and a steep decline in oil prices and ruble devaluation. Nevertheless, we believe and have proved many times before that we have created a resilient ecosystem that is highly adaptive and consumer oriented and will continue to develop it further by targeting our core niches and areas of expertise and creating new use cases well fitted to serve our users, merchants and partners. At the same time, we continue to optimize our operations and implement stricter cost controls and we see the majority of the projects that we have been investing in demonstrate improving operating and financial performance, primarily SOVEST and Tochka. Taking this into account, we remain committed to distributing excess cash to our shareholders and currently have no plans to postpone or refrain from paying dividends. Even in these challenging times, we see many opportunities both in the payment space and in the adjacent markets and I believe we are well positioned to continue strengthening our ecosystem with the ultimate goal of securing our long-term growth prospects.”

2020 Guidance3

QIWI provides its guidance in respect of 2020 outlook:

• Total Adjusted Net Revenue is expected to increase by 3% to 13% over 2019;
• Payment Services Segment Net Revenue is expected to change by -3% to 5% over 2019;
• Adjusted Net Profit is expected to increase by 10% to 30% over 2019;

For the purpose of the guidance in respect of 2020 outlook we would like to outline the following considerations:

The outbreak of the COVID-19 strain of coronavirus and associated responses from various countries around the world is likely to negatively affect consumer demand across the globe and across industries, and there is the potential for COVID-19 and the responses to it to cause a global recession. At this moment we are not able to accurately estimate the potential impact of the COVID-19 on our business, including the negative effect on the betting industry in general and our revenue generated from products and services we provide to our betting merchants caused by postponement and cancellation of the major sports events. In addition, it is currently unclear how much consumer demand will be negatively affected by the outbreak of COVID-19 and what effect the outbreak of COVID-19 will have on the macroeconomic environment, as a whole. The full impact remains uncertain and will depend on the length and severity of the effect of the coronavirus on economic activity in our markets. The full scope of the negative impact that the abrupt decline in oil prices and resulting devaluation of the ruble may have on the Russian economy also remains unclear but has the potential to be very significant. Our outlook reflects our current views and expectations only and is based on the trends we see as of the day of this report. If such trends were to deteriorate further the impact on our business and operations could be more severe than currently expected. We continue to monitor the situation closely.

Further, the Compensation Committee of the Group has recently approved certain changes to our organizational structure. Following these changes, certain costs (primarily personnel costs related to different group level functions, such as compliance, HR or legal) will no longer be allocated to the Payment Services Segment, but rather to the Corporate category or allocated between the segments. We are currently reviewing our allocation policies and aim to adjust the reporting to better reflect the new structure starting from the first quarter 2020. Consequently, we refrain from providing standalone PS Net Profit Guidance and present only the Group Net Profit guidance.

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