QIWI Earnings Preview: Payments segment to lift Russia’s PayPal counterpart in Q4

Russian payments giant QIWI plc (NASDAQ:QIWI) (MOEX:QIWI) is scheduled to post its fourth-quarter fiscal 2019 financial results before the opening bell on Thursday, March 28, 2019.

A year ago, QIWI was heralded as a failing Russian counterpart of Paypal. Analysts were recommending to sell the stock, with ths stock shedding 12% in a day last April.

Now, the world has moved to mobile payments and new technology, and it looks like QIWI is on its way to recovery. According to NASDAQ, analysts are either suggesting STRONG BUY or HOLD for the stock.

This is quite a turnaround from what it was twelve months ago.

The market will be looking at QIWI, not just for its metrics, but also how the management is leading the payments provider in this new world.

Back in August 2017, QIWI acquired assets of the digital banking service Tochka from Otkritie Bank. Then by June of 2018, QIWI, Otkritie Bank and Tochka management team ]signed a partnership agreement to establish a new entity to collectively develop Tochka business as a multi-banking platform. On July 4, 2018, JCS Tochka was established.

LOOKING BACK TO Q3

In the previously reported third-quarter, total adjusted net revenue soared 62% to $79.7 million, with the Payment Services segment net revenue rising 34% to $64.9 million. Adjusted EBITDA grew 23% to $24.9 million, while adjusted net profit jumped 10% to $17.8 million or 18.99 Rubles per diluted share.

The Payment Services segment alone earned a net profit of $37.9 million, up 27% — with total Payment Services volume jumping 26% to $4.5 billion.

Back then, QIWI also provided the fiscal 2018 outlook in Russian Rubles. For the year, QIWI expects total adjusted net revenue to jump 40-45%, with adjusted net profit declining 10-15% from a year ago.

However, Payments Services is expected to earn 17-22% more net profit on an estimated net revenue jump of 22-27%.

These estimations also show how the robust performance of its Payment Services segment could continue well into the future. Along with this, the to-be-reported quarter would also recognize the Tochka project revenues.

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