QIWI Plc (NASDAQ: QIWI) Q1 2021 earnings call dated May. 20, 2021.
Corporate Participants:
Tatiana Vlasova — Acting Head of Investor Relations
Boris Kim — Chief Executive Officer
Andrey Protopopov — Chief Executive Officer of Payment Services
Elena Nikonova — Interim Chief Financial Officer
Analysts:
Chris Kennedy — William Blair — Analyst
Ildar Davletshin — Wood & Co. — Analyst
Maria Sukhanova — BCS Global Markets — Analyst
Andrey Mikhailov — Sova Capital — Analyst
Vladimir Bespalov — VTB Capital — Analyst
Presentation:
Operator
Good day, everyone, and welcome to the QIWI First Quarter 2021 Earnings Conference Call. Today’s call is being recorded.
At this time, I’d like to turn the call over to Ms. Tatiana Vlasova, Acting Head of Investor Relations of QIWI. Please go ahead.
Tatiana Vlasova — Acting Head of Investor Relations
Thank you, operator, and good morning, everyone.
Welcome to the QIWI’s first quarter earnings call.
I’m Tatiana Vlasova, Acting Head of Investor Relations, and with me today are Boris Kim, our Chief Executive Officer; Andrey Protopopov, Chief Executive Officer of the Payment Services segment; and Elena Nikonova, Interim Chief Financial Officer.
A replay of this call will be available until Thursday, June 3, 2021. Access information for the replay is listed in today’s earnings press release, which is available on our Investor Relation website at investor.qiwi.com. For those listening to the replay, this call was held and recorded on May 20, 2021.
Before we begin, I would like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Security Litigation Reform Act of 1995. These forward-looking statements about our expectations for future performance are subject to known and unknown risks and uncertainties. QIWI cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statements to reflect the events that occur after this call. Please refer to the Company’s most recent Annual Report on Form 20-F filed with the Security and Exchange Commission for factors that could cause our actual results to differ materially from any forward-looking statements.
During today’s call, management will provide certain information that will constitute non-IFRS financial measures such as total net revenue, adjusted EBITDA, adjusted net profit and adjusted profit per share. Reconciliations to IFRS measures and certain additional information are also included in today’s earnings press release.
With that, we’ll begin by turning the call over to Boris Kim, our Chief Executive Officer.
Boris Kim — Chief Executive Officer
Thank you, Tatiana, and good morning, everyone. Thanks for joining us today on this call.
I’m pleased to share our first quarter 2021 results review. Notwithstanding the restrictions imposed by the CBR in December 2020 which have adversely affected and will continue to affect our Payment Services business, I’m glad to announce that in the first quarter of 2021 our adjusted EBITDA and adjusted net profit increased by 23% and 18% respectively. This growth primarily resulted from the cost optimization measures implemented in 2020 as well as the development of our strategic areas in Payment Services business, namely self-employed and digital entertainment. This year, we will continue to devote particular attention to the development of our Factoring PLUS and Flocktory products which would strengthen our future growth and secure greater diversification of QIWI Group. Taking this into account, I would like to confirm that we remain committed to investing in our future, our products and our ecosystem to reach our primary goal of securing the long-term growth of QIWI Group.
Now onto some operating highlights. First quarter 2021 total net revenue was RUB5.2 billion. The decrease was mainly driven by Payment Services segment net revenue decline underpinned by Consumer Financial Services segment net revenue decrease resulting from the sale of the SOVEST project in July 2020. Andrey will discuss the performance of our Payment Services segment in a minute while I will walk you through the operating results of our other projects.
For the first quarter of 2021, Factoring PLUS net revenue almost doubled and reached RUB194 million compared to RUB101 million in the corresponding period of the prior year. As of the end of March 2021, Factoring PLUS had more than 480 active clients using Factoring finance with a total Factoring portfolio over RUB4.9 billion. Digital bank guarantees portfolio has reached RUB17.2 billion at the end of March 2021. That important to know that we closely monitor the risk profile of the growing portfolio of digital bank guarantees. As of the end of the first quarter of 2021, the NPL level of the portfolio was below 0.5%.
I would like to highlight that both business lines, Factoring and Bank Guarantee Services, are characterized by marked seasonality. In general, the demand for such service is significantly higher in the second half of the year. This explain why the size of both portfolios have slightly decreased compared to the first quarter of 2020. In 2021, Factoring PLUS aims to focus on enhancing the current services for clients and development of new products which will strengthen our position in the SME market. In the first quarter of 2021, we have already launched some new products. Performance loans for SME clients which will allow us to attract new clients and increase our penetration on this market going forward.
For the first quarter of 2021, Flocktory net revenue was RUB132 million, increased by 48% compared to the same period of the prior year. In the first quarter of 2021, Flocktory has attracted 20 new clients in the martech stream and launched the new mass mailing model which have broadened the offline personalization product.
In the first quarter of 2021, Tochka net revenue declined by 50% to RUB82 million as a result of a decline in revenue generated from cash and settlement services due to lower number of active Tochka clients being served by QIWI Bank. Meanwhile, I would like to highlight that Tochka itself performed quite well in the first quarter of 2021 with net profit increased by 34% compared to the same period of the prior year.
Moving on, I’m glad to announce that following the determination of the first quarter 2021 financial results, our Board of Directors have approved a dividend of $0.22 per share. We remain committed to the target dividend payout ratio of at least 50% of the adjusted net profit for 2021 approved by the Board in February 2021. The Board of Directors reserves the right to distribute the dividends quarterly as it deems necessary so that the total annual payout is in accordance with the target provided. However, the payout ratios for each of the quarters may vary and may be above or below provided target.
Now I would like to give you a brief update on the current situation with the CBR restrictions and the upcoming changes in the betting market. As you know, in December 2020, following a routine scheduled audit of the QIWI Bank, the Central Bank of Russia imposed certain restrictions on QIWI Bank’s operations. At the current moment, the CBR restrictions continue to be in effect and have a negative impact on our volumes and revenues, primarily in e-commerce market verticals. In spite of the fact that CBR imposed these restrictions for a six months period starting from December 2020, we cannot be sure that the CBR will ease a part or all these restrictions going forward. We also do not exclude that some of these restrictions may become permanent, including through the adoption of new laws or regulations. The point could be supported by the fact that a new draft bill was recently submitted to the Russian legislature that would prohibit some types of cross-border operations. It’s also important to notice here that even if the CBR lifts these restrictions, we probably may not be able to gain back the business we lost because of these restrictions. Andrey will discuss the impact of the CBR restrictions in more detail while I’ll move to the changes in the betting industry landscape.
As previously announced, we have made a proposal to serve as a Unified Interactive Bets Accounting Center or ETSUP which started operation in the end of September 2021. However, we cannot be sure that our bid will be successful. At the current moment, the successors haven’t been announced yet. We will monitor the situation closely and will notify you regarding any significant updates which could have an impact on our future results. If we cannot become a part of this new industry landscape, we may experience a decrease or a complete loss of payment volumes and income related to this.
At the same time, we believe that we should be able to retain a part of our revenue generated from Qiwi Wallet services for the betting industry which are not directly related to our TSUPIS, including betting cards top-ups and winning payouts. Moreover, we suppose that our profound expertise will be in demand [Indecipherable] ETSUP. I do strongly believe and we have proved many times before that our resilient ecosystem is highly adaptive and consumer oriented and regardless of all the changes in our operating environment, it will serve as a solid foundation for our future growth.
We always strive for innovations and we will continue to enhance our business model to better reflect the change in environment to fully serve the needs of our customers and diversify QIWI’s ecosystem. We will further expand our product proposition for key niches and areas of expertise. This being said, we continue to focus on optimizing and improving efficiency of our operations across all projects. We see many opportunities ahead and we will pursue our ultimate goal of securing the sustainable growth of the Company.
With this, I will turn the call over to Andrey for an update on Payment Services business. Andrey?
Andrey Protopopov — Chief Executive Officer of Payment Services
Thank you, Boris, and good morning, everyone. It’s my pleasure to be here with you today.
Let’s move on to the results of our Payment Service segment. Despite the restrictions which currently affect our Payment business, we processed over RUB380 billion in cash and electronic payments and increased our payment volume by 4%. In first quarter of 2021 were just positive trends in our key focus areas, including self-employed and money remittances, which supported our Payment Service results.
Let me now provide you with a brief update on the CBR restrictions. Currently restrictions continue to persist and have a negative impact on our operations. As Boris mentioned earlier, our e-commerce and money remittance market verticals continue to be under constraints. As we previously stated, cross-border transactions in general have higher commissions. Therefore, the CBR restrictions significantly depressed our Payment average net revenue yields, with the e-commerce adjusted net revenue yield declined by 49 basis points in the first quarter of 2021. Following [Indecipherable] e-commerce net revenue decreased by 34% compared to the first quarter of the prior year.
Now let’s move on to the operating results. For the first quarter of 2021, our Payment Service segment volume increased by 4% to reach RUB384 billion, driven by significant growth in money remittance market verticals which grew by 32%. The growth in money remittance verticals was largely driven by the development of our key streams, namely the self-employed where we focused on extending our partner network and building up our relations with our existing partners. At the same time, the growth of payment volume was offset by significant decline of volume in e-commerce market vertical due to the CBR restrictions.
Payment Service segment net revenue decreased by 11% in the first quarter of 2021 and amounting to RUB4.8 billion compared to RUB5.3 billion in the prior year. Payment net revenue decreased by 11% to RUB4.1 billion, down from RUB4.6 billion in the prior year, primarily as a result of the net revenue decline in our e-commerce market vertical which decreased by 34%. In contrast, we continue to see the growth in our money remittance verticals, which grew by 41% and currently represent 47% of Payment Service payments net revenue. The growth of money remittance net revenue was driven mainly by the strong performance of the Contact Money Remittance system and the significant increase in winning payouts and payout of the self-employed resulting from the development of our strategic strength.
In the first quarter of 2021, we connected to our platform over 630 taxi [Phonetic] companies, six scrap metal companies and 21 new partners to working with the self-employed and other industries. We continue to improve our services for businesses working with the self-employed and self-employed entrepreneurs by creating a mini ecosystem for key initiatives which address their needs and ensure the future growth of this stream by strengthening of our position in this market. We are also constantly seeking new markets in areas [Indecipherable] convenient payment solutions to penetrate and diversify our business. We believe that new products and services will help us expand our B2B2C product proposition and provide more demand with diversified and relevant services for our clients, cementing our market position and growth.
Our payment average net revenue yield was down by 18 basis points year-over-year to 1.06%, driven by the yield decline in our e-commerce market vertical. Such reduction was driven primarily by the CBR restriction, as I’ve explained before. The growth of money remittance share in Payment Service payments net revenue also have a negative impact on the payment average net revenue yield. Payment Services other adjusted net revenue decreased by 5% to RUB694 million as compared to RUB727 million in the prior year as a result of decline in fees for inactive accounts and unclaimed payments.
The pandemic has accelerated the digitalization of cash and we see the impact of this process on our network of kiosks and terminals. However, kiosks and terminals are part of our ecosystem and important components of our infrastructure. Offline presence and the capability to transfer cash from offline to online are a key important use case for QIWI. Taking that into account, we aim to further maintain our network of kiosks and terminals.
It’s of course obvious that the payment service markets have become more competitive. Moreover, we [Indecipherable] from the regulators towards e-payment [Phonetic] and cyberspace. Nevertheless, we do believe that we are well positioned to continue developing our business and strengthening our ecosystem to provide our clients with the best-in-class digital solutions. With overall trend on the digitalization of payments, we see diverse opportunities for growth in the mid and long term and will make sure the efforts to gain a larger share of payment market and enter new niches which are currently underserved and lack convenient digital solutions.
With this, I will pass over to Elena for more details on the financial performance of the Group. Elena?
Elena Nikonova — Interim Chief Financial Officer
Thank you, Andrey, and good morning, everyone.
Moving on to expenses. Thanks to cost optimization measures we successfully implemented in 2020, we have significantly increased the overall efficiency of our operations and our margins. Despite the decrease in total net revenue in the first quarter of 2021, we see an increase in adjusted net profit and adjusted net profit margin of the Group. This being said, adjusted EBITDA for the first quarter of 2021 increased by 23% to RUB2.8 billion from RUB2.3 billion for the same period in the prior year. Adjusted EBITDA margin was 55% compared to the 37% in the previous year. Adjusted EBITDA margin increase mostly resulted from the decrease in selling, general and administrative expenses due to the decline in advertising, client acquisition and related expenses driven by the divestiture of SOVEST and the wind-down of Rocketbank and lower other administrative expenses.
Group adjusted net profit increased by 18% in the first quarter of 2021 to RUB2.1 billion from RUB1.8 billion in the first quarter of the prior year. Adjusted net profit growth largely resulted from the same factors impacting adjusted EBITDA, offset by an increase in the income tax expenses. Payment Services segment net profit for the first quarter of 2021 decreased by 19% to RUB2.5 billion, driven primarily by Payment Services segment net revenue decrease, underpinned [Phonetic] by the growth of personnel expenses, excluding the effect of share-based payment expenses.
Corporate and other net loss for the first quarter increased to RUB419 million from RUB115 million in the first quarter of the prior year, primarily due to foreign exchange loss amounted to RUB13 million compared to a foreign exchange gain of RUB94 million in the same period for the prior year. As Boris mentioned earlier, Tochka net profit grew by 34% to RUB191 million, primarily as a result of the higher equity pick-up driven by the project growth and strong performance. We continue to optimize our operations in order to improve operations and financial performance of the Group and ensure sustainable growth.
Now onto our guidance. First of all, I would like to remind everyone that at the moment there still remains significant uncertainty in 2021 primarily related to the loan grant effect of the CBR restrictions and our ability to recover or replace currently restricted cross-border operations as well as our ability to secure a place in the new betting industry landscape. We remain conscious and will closely monitor how the situation in the market evolves. Our outlook reflects our current views and expectations only and is based on the trends we see as of the date of this earning call. If such trends were to deteriorate further, the impact on our business and operations could be more tough than currently expected.
Having said that, we reiterate our guidance in respect of 2021 outlook. We expect total net revenue to decrease by 15% to 25% over 2020. Payment Service segment net revenue to decrease by 15% to 25% over 2020 while adjusted net profit is expected to decrease by 15% to 30% over 2020. Despite the fact that the first quarter results surpassed our expectations, we remain cautious and reserve the right to revise the guidance in the course of the year when the scope and extent of the factors impacting our results become clearer.
With that, operator, please open up the call for the questions.
Questions and Answers:
Operator
[Operator Instructions] Our first question comes from the line of Chris Kennedy with William Blair. Please proceed with your question.
Chris Kennedy — William Blair — Analyst
Hello. Thank you for taking the question. Can you give us an update on some of the efforts that QIWI is doing to mitigate some of the headwinds from the CBR restrictions?
Andrey Protopopov — Chief Executive Officer of Payment Services
Great. Thank you for your question. As we said before, we are in the — on the one hand, we are in regular contact with CBR. And as we said before as well, we get some clarification from them for the second important notion for us, so that out of the CBR restriction and we are continue working with them. That includes some big famous name like Skeme [Phonetic], AliExpress, Google and some other similar type of merchants, and that’s helping us. At the same time, we are sending the regular reports to CBR kind of in the almost weekly contact how good we are in the dealing with the restrictions that we have. So we believe that currently we are fully in line with CBR expectations and that’s why as we said there is a good chance that we will have the restrictions will be lifted after six months.
Boris Kim — Chief Executive Officer
Yeah. But I would add a quick — and Boris here. But of course we cannot guarantee that the CBR will lift all the restrictions completely. And we also should keep in mind that some of the restriction could become permanent just because of changing legislation in Russia and the recently Minister of Finance submitted a bill to the parliament which makes some types of cross-border payments impossible. So that’s another point we should keep in mind discussing that point.
Chris Kennedy — William Blair — Analyst
Okay. That’s helpful. And then just I guess a clarification. So the current run rate should be sustainable even if restrictions are lifted. Is that the way to think about it?
Andrey Protopopov — Chief Executive Officer of Payment Services
Generally, yes, it will — of course we will — if and when restrictions will be lifted, we’ll be working to get back some of the merchants and partners we were working with. But we believe it will take time and we will need to see how fast and how big portion of the volumes and revenue will be able to get back. So currently for let’s say this several quarters per month, it’s more or less the same growth rate as current.
Chris Kennedy — William Blair — Analyst
Great. Thanks a lot, guys.
Operator
Thank you. Our next question comes from the line of Ildar Davletshin with Wood & Company. Please proceed with your question.
Ildar Davletshin — Wood & Co. — Analyst
Hello, everyone. Thank you. Well, I just want to better understand the kind of the guidance. I understand there is a little uncertainty. Yet, you gave particularly a range and you reiterated the range which you provided earlier. And there are two big unknowns or uncertainties. So, is it right to assume that in case — in the worst case, we are talking about 30% or 35% decline in revenue and slightly better cadence. It seems the range could be wider, particularly thinking also about the betting regulation which happen — will change at the end of September. And maybe you could help us understand the current portion of revenue coming from the [Indecipherable] services that you provide [Indecipherable].
Andrey Protopopov — Chief Executive Officer of Payment Services
Yeah. Well, thank you for the question. Andrey again. We believe that the current range of the guidance is reflecting all the risks and let’s say potentials for this — for the year. So that’s why the range is quite high. Talking about the — different possibilities, I would like to remind that, first of all, in any case, we believe that we will be able to keep our Qiwi Wallet volumes and revenues for this business and the effect will be limited to the first quarter, whatever it will be. For the — for this year, it’s important yet not, let’s say that’s significant as it will be for the next year.
Ildar Davletshin — Wood & Co. — Analyst
Thank you. And maybe a second question on your Wallet. So we still see — continued decline in active Qiwi Wallet in the first quarter versus the previous quarter. What is the trend recently? Have you seen any slowdown? Is the trajectory more or less the same?
Andrey Protopopov — Chief Executive Officer of Payment Services
Yeah. For the Qiwi Wallet, on the one hand, it was similar trends we observed before with some changes we made in the KYC procedures and some ways how we work with the active wallets, as you say. And now, of course the first [Phonetic] quarter on top of the CBR restrictions from the international merchants affecting this number as well because, for example, in online games, there are, we have, let’s say, we had a big sale of the smaller merchants in online games where there are quite small cheques and there are a lot of consumers. So of course our current numbers are affected. At the same time, I would like to say that overall Qiwi Wallet is quite healthy in terms of the volume and revenue behind growth of more high usage wallets that operate within our key initiatives theme like ones that do the sports bets in the [Indecipherable] and in the self-employed streams as well. So while overall our number of wallets is not — is declining, the Qiwi Wallet business is quite healthy I would say for the moment.
Ildar Davletshin — Wood & Co. — Analyst
All right. Thank you.
Operator
Thank you. Our next question comes from the line of Maria Sukhanova with BCS Global Markets. Please proceed with your question.
Maria Sukhanova — BCS Global Markets — Analyst
Good afternoon. I have several questions about the sources of growth for money remittance vertical in the first quarter. So first off, could you please check whether some of that was driven by betting segment because it would probably make sense to expect the betting result [Indecipherable] the quarter considering that the base was low. So just wanted to check whether it was a big driver too. And second, could you talk a bit more about self-employed and where probably which products exactly have seen nice performance? Maybe which industries? Like, for instance, is this coming from taxi segment [Indecipherable], that will be helpful. Thank you.
Andrey Protopopov — Chief Executive Officer of Payment Services
Yes. Maria, thank you for your question. Yes, you are right, the payouts [Indecipherable] are included into the money rem vertical, and this is one of the big, I would say growth driver, both for the volumes and for the yields in the in the category. Second, in the — talking about the self-employed, I will say those payouts of the business to self-employed with tax businesses, I would say the biggest category for us, which will grow quite fast and continue to grow. And secondly, the different types of self-employed entrepreneurs that are using Qiwi Wallet and accept the payments via peer-to-peer payments with online peer-to-peer checkout and other tools that we are developing are growing quite nicely as well.
Maria Sukhanova — BCS Global Markets — Analyst
Thank you.
Operator
Thank you. Our next question comes from the line of Andrey Mikhailov with Sova Capital. Please proceed with your question.
Andrey Mikhailov — Sova Capital — Analyst
Thank you very much for the call. I have three questions. The first one is on this new regulation by the new fin that you mentioned. How much could it impact your current allowed and active revenues and volumes. That’s the first question. The second question is on the betting regulation. I haven’t actually noticed any changes in your written statement on that. And if there are any few changes in the written statements, maybe you could provide additional comments, at least on your probabilities of various outcomes on you becoming this one selected payment services provider for the regulated parts of the betting payments segment. And the third question is on the claims against the Company in the States. Could you provide any updates on those, especially on the maximum amount that you could be subject to? Thank you.
Boris Kim — Chief Executive Officer
Okay. I’ll first answer to the first question. For us, if and when this new legislation will be in place, nothing will change because we already switched off all these payments — all these types of cross-border payments. For us, it’s just another evidence that these payments at the moment could be performed. But we are under restriction imposed by Central Bank and we couldn’t do that. And when [Indecipherable] this new regulation, we just want to switch it on. Then for us, in terms of volume and revenue, nothing will change.
The second question regarding the new regulation on TSUPIS. At the moment, it’s hard to see whether it will be appointed as a unified TSUPIS, probably not. But we are sure that our expertise in the field is so wide and so profound that we will find our place in this new regulation landscape anyway. As Andrey mentioned, at least we could keep the volume and net revenue comes from Qiwi Wallet, which is very popular payment vehicle for gaming industry and for bookmakers, and probably we could be able, be serve as acquirer for this new TSUPIS, but it’s very premature to make any statement at the moment.
Elena Nikonova — Interim Chief Financial Officer
Andrey, could please repeat the third question? Could you please repeat the third question?
Andrey Mikhailov — Sova Capital — Analyst
Should I repeat the third question?
Elena Nikonova — Interim Chief Financial Officer
Yes, please.
Andrey Mikhailov — Sova Capital — Analyst
Yeah. The third question is on the claims against the Company in the States related to the class action.
Elena Nikonova — Interim Chief Financial Officer
Hello, Andrey. This is Elena. Actually, as of now we do not have any changes. It’s still on the same stage as it was in April. We’re still waiting for appointing a lead plaintiff. And no [Indecipherable].
Andrey Mikhailov — Sova Capital — Analyst
Is the maximum amount of these claims, is it known?
Elena Nikonova — Interim Chief Financial Officer
No, it’s not known yet.
Andrey Mikhailov — Sova Capital — Analyst
Thank you.
Operator
[Operator Instructions] Our next question comes from the line of Vladimir Bespalov with VTB Capital. Please proceed with your question.
Vladimir Bespalov — VTB Capital — Analyst
Hello. Congratulations on the number and thank you for taking my questions. My first question will be a kind of follow-up on the money remittance vertical. We have seen a very good acceleration of growth for several consecutive quarters. So if we look ahead for the full year of 2021, what kind of growth would you expect? Would you be able to maintain this momentum? And how secure you feel about those of your clients which are using these services given the growing competition?
Boris Kim — Chief Executive Officer
Vladimir, thank you for your question. Yes, we — as we said, there are still uncertainties related to the element that we already mentioned including the betting question because as I said, part of the money remittance volumes and revenues come from TSUPIS and the changes in this regulation of betting industry may affect our volumes and the revenue here as well. And talking about the competition, we feel quite strong. And I would say it’s getting stronger with Tinkoff entering some of the niches we are playing in [Indecipherable]. I would say it’s still — there are still uncertainties that we have for this year that are reflected in our guidance.
Vladimir Bespalov — VTB Capital — Analyst
Okay. Thank you very much. And on your guidance again. I remember during the previous calls when your first communicated the guidance, you mentioned that, like the upper bound implied some positive developments around betting while the lower bound of the guidance implied that you’re going to lose — like the worst-case scenario for betting, right? But when I look at the first quarter number, it looks like you are doing much better than what was implied, let’s say, several years ago. Do you see any scope to increase your guidance even if the betting related situation will be developing along the worst-case scenario lines?
Andrey Protopopov — Chief Executive Officer of Payment Services
Yes, that’s true. We see quite strong performance currently in the betting, behind like organic TSUPIS growth. At the same time, as we said, we believe it’s too early to upgrade the guidance. We will need to see kind of how the situation with the regulation will be developing and the competition will be developing. So I think we will be discussing it the next — after the net quarter.
Vladimir Bespalov — VTB Capital — Analyst
Thank you. Thank you. And one more question on Tochka. There is a decrease as far as I understood of the clients which are choosing Qiwi as a bank to be served. Are you concerned about the situation or it doesn’t matter that much? And are you going to take any steps to change that? Thank you.
Boris Kim — Chief Executive Officer
If you are referring to revenue related to Tochka, it’s some, I would say technical changes of legal schemes we are using with Tochka, because the most important part here is our — when we operate as an equity associate [Phonetic], so we are getting our part of the income and this one I believe is growing. So that’s why the revenue change is not really important.
Vladimir Bespalov — VTB Capital — Analyst
Okay. Thank you very much.
Operator
Thank you. Ladies and gentlemen, this concludes our question-and-answer session and thus concludes our call today. We thank you for your participation. You may now disconnect your lines.