Russian mobile operator Mobile TeleSystems (MTS) posted 8% year-on-year revenue growth to RUB138bn ($1.9bn) in 3Q21 under IFRS, with EBITDA up by 4% to RUB61bn with a 44% margin.

Net income declined 13% to RUB17bn due to the impact from foreign currency gains/losses, to higher depreciation, interest and tax costs.

As followed by bne IntelliNews, the company paid a solid final dividend for 2020 and sees its income supported by the economic recovery in Russia and the integration of the banking business. The operator is an anchor asset of the AFK Sistema multi-industry investment conglomerate.

In 3Q21 the top-line growth of MTS continued to include the impact from the consolidation of MTT, as well as an organic increase mobile service revenue in Russia (+4%) and banking (+41% due to 54% expansion in loan portfolio), BCS Global Markets commented, seeing the results as robust.

At the same time, the free cash flow of the operator came under pressure, with the FCF showing a negative RUB15bn for 9M21 overall, with higher capital expenditure of RUB88bn expanding by 38% y/y to 23% of revenues. BCS GM analysts noted the pressure on cash flow, but consider the capex more front-loaded in 2021, set to decline in 2021.

MTS slightly upped the 2021 guidance for EBITDA to 6% growth versus previous 5% and reiterated the revenue growth at high single digit.

While the company did not confirm a dividend change, the management would like to recommend more frequent dividend payments (versus twice a year currently) and is likely to increase the minimum payout, BCS GM notes, while affirming a Buy call on MTS shares.

Most recently, the company also said that it plans to cash in on its tower assets, following other operators on the market.