SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 6-K
REPORT OF A FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For
August 16, 2023
Commission File Number 001-35893
QIWI plc
12-14 Kennedy Ave.
Kennedy Business Centre, 2nd Floor, Office 203
1087 Nicosia Cyprus
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F
x Form 40-F ¨
Indicate by check mark whether the registrant
by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes
¨ No
x
If ''Yes'' is marked, indicate below the file
number assigned to the registrant in connection with Rule 12g3-2(b):
Exhibits
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
QIWI PLC (Registrant) |
|
|
Date: August 16, 2023 |
By: |
/s/ Alexey Mashchenkov |
|
|
Chief Financial Officer |
Exhibit 99.1
QIWI Announces Second Quarter 2023 Financial
Results
NICOSIA,
CYPRUS – August 16, 2023 – QIWI plc (NASDAQ and MOEX: QIWI) (“QIWI” or the “Company”), an innovative
provider of cutting-edge payment and financial services, today announced its financial results for the second quarter ended June 30,
2023.
2Q 2023 key operating and financial highlights1
2
| |
| |
2Q 2022 | | |
2Q 2023 | | |
| | |
1HY 2022 | | |
1HY 2023 | | |
| | |
2Q 2023 | | |
1HY 2023 | |
| |
| |
RUB
million | | |
RUB
million | | |
YoY | | |
RUB
million | | |
RUB
million | | |
YoY | | |
USD
million(1) | | |
USD
million(1) | |
| |
Revenue | |
14,015 | | |
18,037 | | |
28.7 | % | |
23,732 | | |
35,909 | | |
51.3 | % | |
207.2 | | |
412.6 | |
| |
Total Net Revenue | |
10,208 | | |
9,194 | | |
(9.9 | )% | |
16,513 | | |
17,746 | | |
7.5 | % | |
105.6 | | |
203.9 | |
| |
Adjusted EBITDA | |
6,972 | | |
5,057 | | |
(27.5 | )% | |
10,659 | | |
9,536 | | |
(10.5 | )% | |
58.1 | | |
109.6 | |
Consolidated Group results | |
Adjusted
EBITDA margin | |
68.3 | % | |
55.0 | % | |
(13.3 | )p.p. | |
64.5 | % | |
53.7 | % | |
(10.8 | )p.p. | |
55.0 | % | |
53.7 | % |
| |
Profit for the period | |
2,810 | | |
4,817 | | |
71.4 | % | |
5,067 | | |
9,316 | | |
83.9 | % | |
55.3 | | |
107.0 | |
| |
Adjusted Net profit | |
2,964 | | |
5,234 | | |
76.6 | % | |
5,290 | | |
9,414 | | |
78.0 | % | |
60.0 | | |
108.2 | |
| |
Adjusted
Net profit margin | |
29.0 | % | |
56.9 | % | |
27.9 | p.p. | |
32.0 | % | |
53.0 | % | |
21.0 | p.p. | |
56.8 | % | |
53.0 | % |
| |
Net Revenue | |
9,318 | | |
7,215 | | |
(22.6 | )% | |
14,967 | | |
14,159 | | |
(5.4 | )% | |
82.9 | | |
162.7 | |
| |
Payment
Net Revenue | |
7,579 | | |
5,042 | | |
(33.5 | )% | |
11,699 | | |
10,128 | | |
(13.4 | )% | |
57.9 | | |
116.4 | |
| |
Payment
Volume, billion | |
500 | | |
505 | | |
1.0 | % | |
856 | | |
974 | | |
13.7 | % | |
5.8 | | |
11.2 | |
Payment Services (PS) | |
Payment
Net Revenue Yield | |
1.52 | % | |
1.00 | % | |
(0.5 | )p.p. | |
1.37 | % | |
1.04 | % | |
(0.3 | )p.p. | |
1.00 | % | |
1.04 | % |
| |
Other
Net Revenue | |
1,739 | | |
2,173 | | |
25.0 | % | |
3,268 | | |
4,031 | | |
23.4 | % | |
25.0 | | |
46.3 | |
| |
Adjusted Net profit | |
5,572 | | |
2,926 | | |
(47.5 | )% | |
8,601 | | |
6,462 | | |
(24.9 | )% | |
33.6 | | |
74.2 | |
| |
Adjusted
Net profit margin | |
59.8 | % | |
40.6 | % | |
(19.2 | )p.p. | |
57.5 | % | |
45.6 | % | |
(11.8 | )p.p. | |
40.6 | % | |
45.6 | % |
| |
Net Revenue | |
128 | | |
930 | | |
627.6 | % | |
285 | | |
1,671 | | |
487.1 | % | |
10.7 | | |
19.2 | |
Digital Marketing (DM) | |
Adjusted Net (loss) / profit | |
(56 | ) | |
213 | | |
(480.4 | )% | |
(26 | ) | |
329 | | |
(1365.4 | )% | |
2.4 | | |
3.8 | |
| |
Adjusted
Net profit margin | |
(43.8 | )% | |
22.9 | % | |
66.7 | p.p. | |
(9.1 | )% | |
19.7 | % | |
28.8 | p.p. | |
22.9 | % | |
19.7 | % |
Corporate and Other (CO) | |
Net Revenue | |
762 | | |
1,049 | | |
37.7 | % | |
1,261 | | |
1,916 | | |
51.9 | % | |
12.1 | | |
22.0 | |
| |
Adjusted Net (loss) / profit | |
(2,552 | ) | |
2,095 | | |
(182.1 | )% | |
(3,285 | ) | |
2,623 | | |
(179.8 | )% | |
24.1 | | |
30.1 | |
| (1) | Throughout this release dollar translation is calculated using a rouble to U.S. dollar exchange rate of
RUB 87.0341 to U.S. $1.00, which was the official exchange rate quoted by the Central Bank of the Russian Federation as of June 30,
2023. |
| (2) | Throughout this release, following the introduction of new Digital Marketing segment, certain amounts
related to Flocktory have been reclassified from Corporate and Other to Digital Marketing segment to conform to the current period presentation. |
Key events during and after the reported period
| ● | On June 6, 2023, NASDAQ Hearing Panel granted the request of the Company to continue its listing
on Nasdaq, subject to certain conditions3. |
| ● | QIWI
announced results of 2023 Annual General Meeting held on June 5, 20234. |
| ● | QIWI
completed consolidation of Russian assets under the single entity JSC QIWI5. |
| ● | QIWI Bank operations were temporarily and partially restricted starting from July 26, 20236. |
| ● | Credit rating agency lowered credit ratings of QIWI PLC and QIWI Bank7. |
1 Total Net Revenue, adjusted EBITDA, adjusted EBITDA margin,
adjusted Net profit, and adjusted Net profit margin in this release are “non-IFRS financial measures”. Please see the section
“Non-IFRS Financial Measures and Supplemental Financial Information” for more details as well as a reconciliation to IFRS
reported numbers at the end of this release.
2 Throughout this release calculations of totals, subtotals
and/or percentage change may have small variations due to rounding of decimals.
3 https://investor.qiwi.com/news-and-events/press-releases/qiwi-to-continue-its-listing-on-the-nasdaq-uponsuccessful-
restructuring/
4 https://investor.qiwi.com/news-and-events/press-releases/4108568/
5 https://investor.qiwi.com/news-and-events/press-releases/4108570/
6 https://investor.qiwi.com/news-and-events/press-releases/4108571/
7 https://investor.qiwi.com/news-and-events/press-releases/4108572/
2Q
2023 results
Net Revenue breakdown by segments
| |
2Q 2022 | | |
2Q 2023 | | |
| | |
1HY 2022 | | |
1HY 2023 | | |
| | |
2Q 2023 | | |
1HY 2023 | |
| |
RUB
million | | |
RUB
million | | |
YoY | | |
RUB
million | | |
RUB
million | | |
YoY | | |
USD
million | | |
USD
million | |
Total
Net Revenue | |
| 10,208 | | |
| 9,194 | | |
| (9.9 | )% | |
| 16,513 | | |
| 17,746 | | |
| 7.5 | % | |
| 105.6 | | |
| 203.9 | |
Payment Services (PS) | |
| 9,318 | | |
| 7,215 | | |
| (22.6 | )% | |
| 14,967 | | |
| 14,159 | | |
| (5.4 | )% | |
| 82.9 | | |
| 162.7 | |
PS
Payment | |
| 7,579 | | |
| 5,042 | | |
| (33.5 | )% | |
| 11,699 | | |
| 10,128 | | |
| (13.4 | )% | |
| 57.9 | | |
| 116.4 | |
PS
Other | |
| 1,739 | | |
| 2,173 | | |
| 25.0 | % | |
| 3,268 | | |
| 4,031 | | |
| 23.4 | % | |
| 25.0 | | |
| 46.3 | |
Digital Marketing (DM) | |
| 128 | | |
| 930 | | |
| 627.6 | % | |
| 285 | | |
| 1,671 | | |
| 487.1 | % | |
| 10.7 | | |
| 19.2 | |
Corporate
and Other (CO) | |
| 762 | | |
| 1,049 | | |
| 37.7 | % | |
| 1,261 | | |
| 1,916 | | |
| 51.9 | % | |
| 12.1 | | |
| 22.0 | |
Total Net Revenue decreased by 9.9% YoY to RUB
9,194 million ($105.6 million) driven by high base and adverse mix effects in operations of Payment Services (PS) segment partially offset
by Corporate and Other (CO) segment results, as well as the strong performance of Flocktory and the consolidated results of the RealWeb
business acquired by the Company in December 20228 and accounted for in the Digital Marketing (DM) segment.
Payment Services
PS Net Revenue decreased by 22.6% YoY to RUB 7,215
million ($82.9 million).
PS Payment Net Revenue was 33.5% lower YoY and
amounted to RUB 5,042 million ($57.9 million) driven by PS Payment Net Revenue Yield decrease from 1.52% to 1.00% and generally stable
PS Payment Volume despite high base of last year.
PS
Payment Net Revenue Yield was 52 bps lower YoY due to the adverse mix effect resulting from lower share of operations with higher
margins, such as currency conversion.
PS
Payment Volume was 1% higher YoY and reached RUB 504.6 billion driven by the onboarding of new merchants and aggregators and the
growing payment volume from our product offering for digital entertainment and self-employed.
PS Other Net Revenue primarily comprises interest
income, revenue from fees for inactive accounts and unclaimed payments, cash and settlement services and related conversion income, income
from intercompany and third-party funding, and advertising fees. In 2Q 2023 PS Other Net Revenue increased by 25.0% YoY to RUB 2,173 million
($25.0 million) as a result of higher net revenue derived from cash and settlement services partially offset by lower interest income
due to lower interest rates.
Digital Marketing (DM)
DM
Net Revenue increased by 627.6% YoY to RUB 930 million ($10.7 million) driven by the RealWeb acquisition in December 2022
and the increase of the number of Flocktory clients and traffic-providers.
Corporate and Other (CO)
| |
2Q 2022 | | |
2Q 2023 | | |
| | |
1HY 2022 | | |
1HY 2023 | | |
| | |
2Q 2023 | | |
1HY 2023 | |
| |
RUB
million | | |
RUB
million | | |
YoY | | |
RUB
million | | |
RUB
million | | |
YoY | | |
USD
million | | |
USD
million | |
CO
Net Revenue | |
| 762 | | |
| 1,049 | | |
| 37.7 | % | |
| 1,261 | | |
| 1,916 | | |
| 51.9 | % | |
| 12.1 | | |
| 22.0 | |
ROWI | |
| 709 | | |
| 658 | | |
| (7.2 | )% | |
| 1,078 | | |
| 1,253 | | |
| 16.2 | % | |
| 7.6 | | |
| 14.4 | |
Tochka | |
| - | | |
| - | | |
| | | |
| 106 | | |
| - | | |
| (100.0 | )% | |
| - | | |
| - | |
Corporate and Other projects | |
| 54 | | |
| 392 | | |
| 630.1 | % | |
| 77 | | |
| 663 | | |
| 755.8 | % | |
| 4.5 | | |
| 7.6 | |
CO Net Revenue increased by 37.7% YoY to RUB 1,049
million ($12.1 million) mainly as a result of higher interest income accounted for in Corporate and Other projects.
8 https://investor.qiwi.com/news-and-events/press-releases/4108557/
| ● | ROWI Net Revenue decreased by 7.2% YoY to RUB 658 million ($7.6 million) mainly due to a decline of net
portfolio yield compared to 2Q2022: |
| o | As of June 30, 2023, the bank guarantees portfolio reached RUB 80.0 billion - an increase of 28.0%
YoY. |
| o | As of June 30, 2023, the factoring portfolio was RUB 12.1 billion or 15.2% higher YoY. |
| o | As of June 30, 2023, the portfolio of online loans for government contracts execution doubled compared
to previous year and reached RUB 4.4 billion. |
| o | In 2Q 2023, the share of ROWI Net Revenue in Total Net Revenue was 7.2% growing by 0.2 ppt YoY. |
| ● | Corporate and Other projects Net Revenue in 2Q 2023 amounted to RUB 392 million ($4.5 million) compared
to RUB 54 million in 2Q 2022 driven by interest income from (i) investments into debt securities (high-quality corporate and government
bonds) and (ii) loans provided. |
Operating expenses and other non-operating income
and expenses
| |
2Q
2022 | | |
2Q
2023 | | |
| | |
1HY
2022 | | |
1HY
2023 | | |
| | |
2Q
2023 | | |
1HY
2023 | |
| |
RUB
million | | |
RUB
million | | |
YoY | | |
RUB
million | | |
RUB
million | | |
YoY | | |
USD
million | | |
USD
million | |
Operating expenses | |
(3,618 | ) | |
(4,452 | ) | |
23.1 | % | |
(6,513 | ) | |
(8,834 | ) | |
35.6 | % | |
(51.2 | ) | |
(101.5 | ) |
%
of Net Revenue | |
(35.4 | )% | |
(48.4 | )% | |
(13.0 | )p.p. | |
(39.4 | )% | |
(49.8 | )% | |
(10.3 | )p.p. | |
| | |
| |
Selling, general and administrative
expenses | |
(773 | ) | |
(1,184 | ) | |
53.2 | % | |
(1,544 | ) | |
(2,143 | ) | |
38.8 | % | |
(13.6 | ) | |
(24.6 | ) |
% of Net Revenue | |
(7.6 | )% | |
(12.9 | )% | |
(5.3 | )p.p. | |
(9.4 | )% | |
(12.1 | )% | |
(2.7 | )p.p. | |
| | |
| |
Personnel expenses | |
(2,002 | ) | |
(3,034 | ) | |
51.5 | % | |
(3,675 | ) | |
(5,785 | ) | |
57.4 | % | |
(34.9 | ) | |
(66.5 | ) |
% of Net Revenue | |
(19.6 | )% | |
(33.0 | )% | |
(13.4 | )p.p. | |
(22.3 | )% | |
(32.6 | )% | |
(10.3 | )p.p. | |
| | |
| |
Depreciation, amortization &
impairment | |
(323 | ) | |
(315 | ) | |
(2.5 | )% | |
(600 | ) | |
(624 | ) | |
4.0 | % | |
(3.6 | ) | |
(7.2 | ) |
% of Net Revenue | |
(3.2 | )% | |
(3.4 | )% | |
(0.3 | )p.p. | |
(3.6 | )% | |
(3.5 | )% | |
0.1 | p.p. | |
| | |
| |
Credit loss (expense) / gain | |
(520 | ) | |
81 | | |
(115.6 | )% | |
(694 | ) | |
(282 | ) | |
(59.4 | )% | |
0.9 | | |
(3.2 | ) |
%
of Net Revenue | |
(5.1 | )% | |
0.9 | % | |
6.0 | p.p. | |
(4.2 | )% | |
(1.6 | )% | |
2.6 | p.p. | |
| | |
| |
Other non-operating income
and expenses | |
(2,347 | ) | |
1,029 | | |
(143.8 | )% | |
(2,699 | ) | |
2,249 | | |
(183.3 | )% | |
11.8 | | |
21.0 | |
%
of Net Revenue | |
(23.0 | )% | |
11.2 | % | |
34.2 | p.p. | |
(16.3 | )% | |
12.7 | % | |
29.0 | p.p. | |
| | |
| |
Share of loss of an associate | |
- | | |
(5 | ) | |
| | |
- | | |
(44 | ) | |
| | |
(0.1 | ) | |
(0.5 | ) |
% of Net Revenue | |
0.0 | % | |
(0.1 | )% | |
(0.1 | )p.p. | |
0.0 | % | |
(0.2 | )% | |
(0.2 | )p.p. | |
| | |
| |
Foreign exchange gain/(loss),
net | |
(2,369 | ) | |
1,296 | | |
(154.7 | )% | |
(2,810 | ) | |
2,115 | | |
(175.3 | )% | |
14.9 | | |
24.3 | |
% of Net Revenue | |
(23.2 | )% | |
14.1 | % | |
37.3 | p.p. | |
(17.0 | )% | |
11.9 | % | |
28.9 | p.p. | |
| | |
| |
Other income and expenses, net | |
22 | | |
(262 | ) | |
(1290.9 | )% | |
111 | | |
(246 | ) | |
(321.6 | )% | |
(3.0 | ) | |
(2.8 | ) |
% of Net Revenue | |
0.2 | % | |
(2.8 | )% | |
(3.1 | )p.p. | |
0.7 | % | |
(1.4 | )% | |
(2.1 | )p.p. | |
| | |
| |
Gain from disposal of subsidiary | |
- | | |
- | | |
| | |
- | | |
424 | | |
| | |
- | | |
4.9 | |
% of Net Revenue | |
0.0 | % | |
0.0 | % | |
0.0 | p.p. | |
0.0 | % | |
2.4 | % | |
2.4 | p.p. | |
| | |
| |
Operating
expenses increased by 23.1% YoY to RUB 4,452 million ($51.2 million) mainly driven by the increase of expenses to secure growth of the
business and the acquisition of RealWeb in December 2022 partially offset by credit loss reversal. Operating expenses as a
percentage of Total Net Revenue deteriorated by 13.0 ppts to 48.4% mainly due to the high base of last year for the PS segment and the
consolidation of the new RealWeb business (with historically higher operating expenses to Net Revenue ratio), partially offset by a positive
credit loss dynamic.
Selling, general and administrative expenses increased
by 53.2% YoY to RUB 1,184 million ($13.6 million) and as a percentage of Total Net Revenue by 5.3 ppt YoY to 12.9% mainly driven by the
high base effect of last year and the acquisition of RealWeb.
Personnel
expenses surged by 51.5% YoY to RUB 3,034 million ($34.9 million) driven by the hiring of new staff for development of new products
and strong financial performance resulting in higher bonuses to employees in PS segment as well as the consolidation of the new RealWeb
business. Personnel expenses as a percentage of Total Net Revenue increased by 13.4 ppts to 33.0% mainly driven by the high base effect
of last year and acquisition of RealWeb.
Depreciation, amortization and impairment stood
at RUB 315 million ($3.6 million) or 3.4% as percent of Total Net Revenue – 0.3 ppt higher YoY due to the high base effect of last
year.
Credit
loss reversal amounted to RUB 81 million ($0.9 million) compared to a credit loss of RUB 520 million in 2Q 2022 due to release of allowance
for ECL on restricted cash accounts partially offset by an increase of provisions due to the growth of bank guarantees portfolio.
Other non-operating income increased to RUB 1,029
million ($11.8 million) compared to RUB 2,347 million of loss last year primarily due to (i) the foreign exchange gain resulting
from the depreciation of the Russian ruble vs. USD, AED and Euro in 2Q 2023, and (ii) a decrease in fair value of option to invest
in an associate.
Income tax expense
Income tax expense decreased by 33.4% YoY to RUB
954 million ($11.0 million) as a substantial part of the profit relates to exchange gain for 2Q 2023 which is tax neutral within the Group
perimeter. As a result, the effective tax rate decreased from 33.8% in 2Q 2022 to 16.5% in 2Q 2023.
Profitability results
| |
2Q 2022 | | |
2Q 2023 | | |
| | |
1HY 2022 | | |
1HY 2023 | | |
| | |
2Q 2023 | | |
1HY 2023 | |
| |
RUB
million | | |
RUB
million | | |
YoY | | |
RUB
million | | |
RUB
million | | |
YoY | | |
USD
million | | |
USD
million | |
Adjusted EBITDA | |
| 6,972 | | |
| 5,057 | | |
| (27.5 | )% | |
| 10,659 | | |
| 9,536 | | |
| (10.5 | )% | |
| 58.1 | | |
| 109.6 | |
Adjusted
EBITDA margin, % | |
| 68.3 | % | |
| 55.0 | % | |
| (13.3 | )p.p. | |
| 64.5 | % | |
| 53.7 | % | |
| (10.8 | )p.p. | |
| 55.0 | % | |
| 53.7 | % |
Adjusted Net Profit | |
| 2,964 | | |
| 5,234 | | |
| 76.6 | % | |
| 5,290 | | |
| 9,414 | | |
| 78.0 | % | |
| 60.0 | | |
| 108.2 | |
Adjusted
Net Profit margin, % | |
| 29.0 | % | |
| 56.9 | % | |
| 27.9 | p.p. | |
| 32.0 | % | |
| 53.0 | % | |
| 21.0 | p.p. | |
| 56.9 | % | |
| 53.0 | % |
Payment Services | |
| 5,572 | | |
| 2,926 | | |
| (47.5 | )% | |
| 8,601 | | |
| 6,462 | | |
| (24.9 | )% | |
| 33.6 | | |
| 74.2 | |
PS Adjusted Net Profit
margin, % | |
| 59.8 | % | |
| 40.6 | % | |
| (19.2 | )p.p. | |
| 57.5 | % | |
| 45.6 | % | |
| (11.8 | )p.p. | |
| 40.6 | % | |
| 45.6 | % |
Digital Marketing (DM) | |
| (56 | ) | |
| 213 | | |
| (480.4 | )% | |
| (26 | ) | |
| 329 | | |
| (1365.4 | )% | |
| 2.4 | | |
| 3.8 | |
DM Adjusted Net Profit
margin, % | |
| (43.8 | )% | |
| 22.9 | % | |
| 66.7 | p.p. | |
| (9.1 | )% | |
| 19.7 | % | |
| 28.8 | p.p. | |
| 22.9 | % | |
| 19.7 | % |
Corporate
and Other (CO) | |
| (2,552 | ) | |
| 2,095 | | |
| (182.1 | )% | |
| (3,285 | ) | |
| 2,623 | | |
| (179.8 | )% | |
| 24.1 | | |
| 30.1 | |
Tochka | |
| - | | |
| - | | |
| | | |
| (15 | ) | |
| - | | |
| (100.0 | )% | |
| - | | |
| - | |
ROWI | |
| 321 | | |
| 72 | | |
| (77.5 | )% | |
| 372 | | |
| 256 | | |
| (31.2 | )% | |
| 0.8 | | |
| 2.9 | |
Corporate and Other projects | |
| (2,873 | ) | |
| 2,023 | | |
| (170.4 | )% | |
| (3,641 | ) | |
| 2,367 | | |
| (165.0 | )% | |
| 23.2 | | |
| 27.2 | |
Adjusted
EBITDA decreased by 27.5% YoY to RUB 5,057 million ($58.1 million) mainly due to (i) the high base effect of last year resulting
in Total Net Revenue decline by 9.9% YoY, and (ii) an increase of operating expenses to secure growth of the business, which were
(iii) partially offset by the release of allowance for ECL on restricted cash accounts. Adjusted EBITDA margin decreased by
13.3 ppts YoY to 55.0% driven by the factors described above and the consolidation of the new RealWeb business operating with lower margin
than the PS segment.
Adjusted Net Profit increased by 76.6% YoY to
RUB 5,234 million ($60.0 million). Adjusted Net Profit margin increased by 27.9 ppts YoY to 56.9% primarily driven by the foreign exchange
gain partially offset by the consolidation of the RealWeb business operating with a lower margin than the PS segment.
PS Adjusted Net Profit decreased by 47.5% YoY
to RUB 2,926 million ($33.6 million) mainly due to (i) the high base effect of last year resulting in PS Net Revenue decline by 22.6%
YoY, and (ii) an increase of operating expenses to secure growth of the business. As a result, PS Adjusted Net Profit margin deteriorated
by 19.2 ppts to 40.6% mainly due to a combination of (i) negative operating leverage effect, (ii) increased personnel expenses
(described earlier), and (iii) higher expenses related to multi-bank platform services in QIWI Bank.
Digital Marketing (DM) Adjusted Net Profit for
2Q 2023 increased to RUB 213 million ($2.4 million) due to Flocktory Net Revenue growth and the consolidation of new RealWeb business.
DM Adjusted Net Profit margin stood at 22.9%.
CO Adjusted Net Profit increased to RUB 2,095
million ($24.1 million) compared to CO Net loss of RUB 2,552 million driven by:
| ● | CO Net Profit of RUB 2,023 million ($23.2 million) resulting primarily from the CO Net Revenue YoY
growth by 37.7% described above, the foreign exchange gain, and the release of allowance for ECL on restricted cash accounts. |
| ● | ROWI Net Profit of RUB 72 million ($0.8 million) as a result of its Net Revenue decline by 7.2% YoY and
an increase of provisions related to ROWI bank guarantees portfolio. |
Update on the CBR restrictions
On
July 25, 2023, during a routine audit of Qiwi Bank, the CBR issued an order to introduce temporary and partial limitations for individuals
to withdraw funds from QIWI wallets to bank accounts or make cash withdrawals. As of the date of this press release, Qiwi Bank has already
fixed the identified deficiencies and provided results to the regulator. We are working closely with the CBR to lift the limitations
fully or at least partially.
For
indicative purposes only, the Company performed a worst-case stress test based on 1H 2023 actual results and estimated that if the full
scope of restrictions were in place since the beginning of 1H 2023, it would have affected (i) Payment Volume by up to 20%, (ii) Group
Net Revenue by up to 25%, and (iii) Group Adjusted Net Profit by up to 40%. The stress test did not include any cost optimization
measures or gradual restrictions relief. The Company also aims to further develop its services and launch new products, in
order to mitigate the negative implications of the imposed restrictions on the financial results of the Company.
The Company remains financially stable and profitable
despite the imposed restrictions. Qiwi Bank has substantial liquidity reserves and maintains the required capital adequacy ratios.
Dividends
Due
to the lingering stock market infrastructure issues, the Company does not see the opportunity to arrange the distribution of dividends
or repurchase shares with the equal treatment of all existing shareholders. Therefore, the Board decided to keep the distribution of dividends
under review until changes of the sanction regime or other developments enable the Company to distribute dividends to all of its
shareholders.
Update on corporate restructuring
Since the beginning of the Ukrainian conflict,
the geopolitical situation has been deteriorating, sanctions expanded and extended, and the world stock market infrastructure continued
to isolate from Russia. The Company has been searching for a viable solution to address the many shareholders’ concerns, as well
as to define an optimal way for further development.
The Company has been facing extraordinary challenges
to the operations of the business and needs to navigate in a rapidly changing business environment. Under current circumstances, QIWI’s
intentions to develop its business within the Russian perimeter and overseas require different strategies. Management and the Board of
Directors of QIWI PLC have concluded that the best option to preserve liquidity and shareholder value would be to restructure its business
and to exit the Russian market.
The Company has completed internal restructuring
and consolidated practically all Russian assets under JSC QIWI. The Company also completed a valuation of the Russian assets. The valuation
report has been prepared by an independent appraiser and received the required approval by a self-regulatory organization.
Further, the Board established a Special Committee
comprised of Independent Directors of the Company to review available divestment options. Currently, the Special Committee and management,
assisted by reputable advisors, are conducting a disciplined process intended to ensure the best outcome for the Company and the different
groups of shareholders using three major criteria: 1) liquidity, 2) ability to receive cash, and 3) ability to exercise voting rights.
The Company will duly inform the market on further
developments as regards the restructuring process.
Earnings Conference Call and Audio Webcast
Given the persisting level of uncertainty and
market volatility, there will be no conference call or webcast to discuss the results. We welcome all our stakeholders to send any questions
related to our business using the contact details available on our investor’s website. We remain available for individual incoming
call requests.
About QIWI plc.
QIWI is an innovative provider of cutting-edge
payment and financial services. We stand at the forefront of fintech innovations to facilitate and secure the digitalization of payments.
Our mission is to connect our clients providing unique financial and technological solutions to make the impossible accessible and simple.
We offer a wide range of products under several directions: QIWI payment and financial services ecosystem for merchants and B2C clients
across digital use-cases, ROWI digital structured financial products for SME, digital marketing, and several other projects.
For the FY 2022 QIWI had revenue of RUB 51.5 billion
and an Adjusted EBITDA of RUB 19.8 billion. QIWI's American depositary shares are listed on the NASDAQ and Moscow Exchange (ticker: QIWI).
For
more information, visit investor.qiwi.com.
Contact
Investor Relations
+357.25028091
ir@qiwi.com
Forward-Looking Statements
This press release includes “forward-looking
statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995, including,
without limitation, statements regarding expected total net revenue, adjusted net profit and net revenue yield, dividend payments, payment
volume growth, growth of physical and virtual distribution channels, trends in each of our market verticals and statements regarding the
development of our ROWI, RealWeb, Flocktory and other projects, the impact of recent sanctions targeting Russia, the impact of such sanctions
on our results of operations, potential further changes in the regulatory regime, the effect of the CBR restrictions on results of operations,
any other restriction the CBR may impose based on our past and future operations, our ability to eliminate partially or completely
the CBR restrictions, and others. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that
may cause the actual results, performance or achievements of QIWI to be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. Various factors that could cause actual future results and other future events
to differ materially from those estimated by management include, but are not limited to, the macroeconomic conditions of the Russian Federation
and in each of the international markets in which we operate, growth in each of our markets, competition, the introduction of new products
and services and their acceptance by consumers, QIWI’s ability to estimate the market risk and capital risk associated with new
projects, a decline in net revenue yield, regulation, QIWI’s ability to grow physical and virtual distribution channels, cyberattacks
and security vulnerabilities in QIWI’s products and services, QIWI’s ability to expand geographically, the risk that new projects
will not perform in accordance with its expectations and other risks identified under the Caption “Risk Factors” in QIWI’s
Annual Report on Form 20-F and in other reports QIWI files with the U.S. Securities and Exchange Commission. QIWI undertakes no obligation
to revise any forward-looking statements or to report future events that may affect such forward-looking statements unless QIWI is required
to do so by law.
QIWI plc.
Consolidated Statement of Financial Position
(in millions)
| |
As of December 31, | | |
As of June 30, | | |
As of June 30, | |
| |
2022 | | |
2023 | | |
2023 | |
| |
| | |
(Unaudited) | | |
(Unaudited) | |
| |
RUB | | |
RUB | | |
USD | |
Assets | |
| | | |
| | | |
| | |
Non-current assets | |
| | | |
| | | |
| | |
Property and equipment | |
| 1,163 | | |
| 1,271 | | |
| 14.6 | |
Goodwill and other intangible assets | |
| 13,126 | | |
| 13,077 | | |
| 150.3 | |
Investments in associates | |
| 303 | | |
| 579 | | |
| 6.7 | |
Long-term debt securities | |
| 2,946 | | |
| 4,991 | | |
| 57.3 | |
Long-term loans issued | |
| 843 | | |
| 623 | | |
| 7.2 | |
Other non-current assets | |
| 257 | | |
| 241 | | |
| 2.8 | |
Deferred tax assets | |
| 208 | | |
| 242 | | |
| 2.8 | |
Total non-current assets | |
| 18,846 | | |
| 21,024 | | |
| 241.6 | |
Current assets | |
| | | |
| | | |
| | |
Trade and other receivables | |
| 15,194 | | |
| 12,169 | | |
| 139.8 | |
Short-term loans issued | |
| 14,200 | | |
| 16,728 | | |
| 192.2 | |
Short-term debt securities | |
| 14,029 | | |
| 28,809 | | |
| 331.0 | |
Other current assets | |
| 2,195 | | |
| 1,846 | | |
| 21.2 | |
Cash and cash equivalents | |
| 47,462 | | |
| 39,570 | | |
| 454.6 | |
Total current assets | |
| 93,080 | | |
| 99,122 | | |
| 1,138.9 | |
Total assets | |
| 111,926 | | |
| 120,146 | | |
| 1,380.4 | |
Equity and liabilities | |
| | | |
| | | |
| | |
Equity attributable to equity holders of the parent | |
| | | |
| | | |
| | |
Share capital | |
| 1 | | |
| 1 | | |
| 0.01 | |
Additional paid-in capital | |
| 1,876 | | |
| 1,876 | | |
| 21.6 | |
Share premium | |
| 12,068 | | |
| 12,068 | | |
| 138.7 | |
Other reserves | |
| 2,696 | | |
| 2,352 | | |
| 27.0 | |
Retained earnings | |
| 39,941 | | |
| 48,935 | | |
| 562.3 | |
Translation reserve | |
| 401 | | |
| 169 | | |
| 1.9 | |
Total equity attributable to equity holders of the parent | |
| 56,983 | | |
| 65,401 | | |
| 751.4 | |
Non-controlling interests | |
| 912 | | |
| 977 | | |
| 11.2 | |
Total equity | |
| 57,895 | | |
| 66,378 | | |
| 762.7 | |
Non-current liabilities | |
| | | |
| | | |
| | |
Long-term deferred income | |
| 1,154 | | |
| 1,062 | | |
| 12.2 | |
Long-term lease liabilities | |
| 133 | | |
| 84 | | |
| 1.0 | |
Other non-current liabilities | |
| 156 | | |
| 81 | | |
| 0.9 | |
Deferred tax liabilities | |
| 1,847 | | |
| 1,749 | | |
| 20.1 | |
Total non-current liabilities | |
| 3,290 | | |
| 2,976 | | |
| 34.2 | |
Current liabilities | |
| | | |
| | | |
| | |
Trade and other payables | |
| 33,048 | | |
| 29,740 | | |
| 341.7 | |
Customer accounts and amounts due to banks | |
| 11,203 | | |
| 15,011 | | |
| 172.5 | |
Short-term debt | |
| 3,922 | | |
| 3,745 | | |
| 43.0 | |
Short-term lease liabilities | |
| 300 | | |
| 302 | | |
| 3.5 | |
Other current liabilities | |
| 2,268 | | |
| 1,994 | | |
| 22.9 | |
Total current liabilities | |
| 50,741 | | |
| 50,792 | | |
| 583.6 | |
Total equity and liabilities | |
| 111,926 | | |
| 120,146 | | |
| 1,380.4 | |
QIWI plc.
Consolidated Statement of Comprehensive Income
(in millions, except per share data)
| |
Three months ended (unaudited) | |
| |
June 30, 2022 | | |
June 30, 2023 | | |
June 30, 2023 | |
| |
RUB | | |
RUB | | |
USD | |
Revenue: | |
| 14,015 | | |
| 18,037 | | |
| 207.2 | |
Revenue from contracts with customers | |
| 11,650 | | |
| 15,645 | | |
| 179.8 | |
Interest revenue calculated using the effective interest rate | |
| 1,929 | | |
| 1,944 | | |
| 22.3 | |
Fees from inactive accounts and unclaimed payments | |
| 436 | | |
| 448 | | |
| 5.1 | |
| |
| | | |
| | | |
| | |
Operating costs and expenses: | |
| (7,425 | ) | |
| (13,295 | ) | |
| (152.8 | ) |
Cost of revenue (exclusive of items shown separately below) | |
| (3,807 | ) | |
| (8,843 | ) | |
| (101.6 | ) |
Selling, general and administrative expenses | |
| (773 | ) | |
| (1,184 | ) | |
| (13.6 | ) |
Personnel expenses | |
| (2,002 | ) | |
| (3,034 | ) | |
| (34.9 | ) |
Depreciation and amortization | |
| (287 | ) | |
| (315 | ) | |
| (3.6 | ) |
Credit loss (expense)/income | |
| (520 | ) | |
| 81 | | |
| 0.9 | |
Impairment of non-current assets | |
| (36 | ) | |
| - | | |
| - | |
Profit from operations | |
| 6,590 | | |
| 4,742 | | |
| 54.5 | |
| |
| | | |
| | | |
| | |
Share of loss of an associate | |
| - | | |
| (5 | ) | |
| (0.1 | ) |
Foreign exchange gain/(loss), net | |
| (2,369 | ) | |
| 1,296 | | |
| 14.9 | |
Other income and expenses, net | |
| 22 | | |
| (262 | ) | |
| (3.0 | ) |
Profit before tax | |
| 4,243 | | |
| 5,771 | | |
| 66.3 | |
Income tax expense | |
| (1,433 | ) | |
| (954 | ) | |
| (11.0 | ) |
Net profit for the period | |
| 2,810 | | |
| 4,817 | | |
| 55.3 | |
Attributable to: | |
| | | |
| | | |
| | |
Equity holders of the parent | |
| 2,625 | | |
| 4,653 | | |
| 53.5 | |
Non-controlling interests | |
| 185 | | |
| 164 | | |
| 1.9 | |
| |
| | | |
| | | |
| | |
Other comprehensive (loss)/income | |
| | | |
| | | |
| | |
Other comprehensive income to be reclassified to profit or loss in subsequent periods: | |
| | | |
| | | |
| | |
Foreign currency translation: | |
| | | |
| | | |
| | |
Exchange differences on translation of foreign operations | |
| 88 | | |
| 143 | | |
| 1.6 | |
Net gain recycled to profit or loss upon disposal | |
| - | | |
| - | | |
| - | |
Debt securities at fair value through other comprehensive income (FVOCI): | |
| | | |
| | | |
| | |
Net gain/(loss) arising during the period, net of tax | |
| 964 | | |
| (77 | ) | |
| (0.9 | ) |
Net gain recycled to profit or loss upon disposal | |
| - | | |
| (18 | ) | |
| (0.2 | ) |
Share of other comprehensive Income of an associate | |
| - | | |
| (1 | ) | |
| (0.0 | ) |
Total other comprehensive (loss)/income, net of tax | |
| 1,052 | | |
| 47 | | |
| 0.5 | |
Total comprehensive income, net of tax | |
| 3,862 | | |
| 4,864 | | |
| 55.9 | |
Attributable to: | |
| | | |
| | | |
| | |
Equity holders of the parent | |
| 3,697 | | |
| 4,689 | | |
| 53.9 | |
Non-controlling interests | |
| 165 | | |
| 175 | | |
| 2.0 | |
| |
| | | |
| | | |
| | |
Earnings per share: | |
| | | |
| | | |
| | |
Basic, earnings attributable to ordinary equity holders of the parent | |
| 41.93 | | |
| 74.20 | | |
| 0.85 | |
Diluted, earnings attributable to ordinary equity holders of the parent | |
| 41.93 | | |
| 74.20 | | |
| 0.85 | |
QIWI plc.
Consolidated Statement of Comprehensive Income
(in millions, except per share data)
| |
Six months ended (unaudited) | |
| |
June 30, 2022 | | |
June 30, 2023 | | |
June 30, 2023 | |
| |
RUB | | |
RUB | | |
USD | |
Revenue: | |
| 23,732 | | |
| 35,909 | | |
| 412.6 | |
Revenue from contracts with customers | |
| 19,460 | | |
| 31,373 | | |
| 360.5 | |
Interest revenue calculated using the effective interest rate | |
| 3,381 | | |
| 3,708 | | |
| 42.6 | |
Fees from inactive accounts and unclaimed payments | |
| 891 | | |
| 828 | | |
| 9.5 | |
| |
| | | |
| | | |
| | |
Operating costs and expenses: | |
| (13,732 | ) | |
| (26,997 | ) | |
| (310.2 | ) |
Cost of revenue (exclusive of items shown separately below) | |
| (7,219 | ) | |
| (18,163 | ) | |
| (208.7 | ) |
Selling, general and administrative expenses | |
| (1,544 | ) | |
| (2,143 | ) | |
| (24.6 | ) |
Personnel expenses | |
| (3,675 | ) | |
| (5,785 | ) | |
| (66.5 | ) |
Depreciation and amortization | |
| (564 | ) | |
| (624 | ) | |
| (7.2 | ) |
Credit loss (expense)/income | |
| (694 | ) | |
| (282 | ) | |
| (3.2 | ) |
Impairment of non-current assets | |
| (36 | ) | |
| - | | |
| - | |
Profit from operations | |
| 10,000 | | |
| 8,912 | | |
| 102.4 | |
| |
| | | |
| | | |
| | |
Gain from disposal of subsidiary | |
| - | | |
| 424 | | |
| 4.9 | |
Share of loss of an associate | |
| - | | |
| (44 | ) | |
| (0.5 | ) |
Foreign exchange gain/(loss), net | |
| (2,810 | ) | |
| 2,115 | | |
| 24.3 | |
Other income and expenses, net | |
| 111 | | |
| (246 | ) | |
| (2.8 | ) |
Profit before tax | |
| 7,301 | | |
| 11,161 | | |
| 128.2 | |
Income tax expense | |
| (2,234 | ) | |
| (1,845 | ) | |
| (21.2 | ) |
Net profit for the period | |
| 5,067 | | |
| 9,316 | | |
| 107.0 | |
Attributable to: | |
| | | |
| | | |
| | |
Equity holders of the parent | |
| 4,799 | | |
| 8,994 | | |
| 103.3 | |
Non-controlling interests | |
| 268 | | |
| 322 | | |
| 3.7 | |
| |
| | | |
| | | |
| | |
Other comprehensive (loss)/income | |
| | | |
| | | |
| | |
Other comprehensive income to be reclassified to profit or loss in subsequent periods: | |
| | | |
| | | |
| | |
Foreign currency translation: | |
| | | |
| | | |
| | |
Exchange differences on translation of foreign operations | |
| 76 | | |
| 213 | | |
| 2.4 | |
Net gain recycled to profit or loss upon disposal | |
| - | | |
| (424 | ) | |
| (4.9 | ) |
Debt securities at fair value through other comprehensive income (FVOCI): | |
| | | |
| | | |
| | |
Net gain/(loss) arising during the period, net of tax | |
| 110 | | |
| (64 | ) | |
| (0.7 | ) |
Net gain recycled to profit or loss upon disposal | |
| - | | |
| (18 | ) | |
| (0.2 | ) |
Share of other comprehensive Income of an associate | |
| - | | |
| 3 | | |
| 0.0 | |
Total other comprehensive (loss)/income, net of tax | |
| 186 | | |
| (290 | ) | |
| (3.3 | ) |
Total comprehensive income, net of tax | |
| 5,253 | | |
| 9,026 | | |
| 103.7 | |
Attributable to: | |
| | | |
| | | |
| | |
Equity holders of the parent | |
| 5,006 | | |
| 8,683 | | |
| 99.8 | |
Non-controlling interests | |
| 247 | | |
| 343 | | |
| 3.9 | |
| |
| | | |
| | | |
| | |
Earnings per share: | |
| | | |
| | | |
| | |
Basic, earnings attributable to ordinary equity holders of the parent | |
| 76.75 | | |
| 143.42 | | |
| 1.65 | |
Diluted, earnings attributable to ordinary equity holders of the parent | |
| 76.75 | | |
| 143.42 | | |
| 1.65 | |
QIWI plc.
Consolidated Statement
of Cash Flows
(in millions)
| |
Six months ended (unaudited) | |
| |
June 30, 2022 | | |
June 30, 2023 | | |
June 30, 2023 | |
| |
RUB | | |
RUB | | |
USD(1) | |
Operating activities | |
| | | |
| | | |
| | |
Profit before tax | |
| 7,301 | | |
| 11,161 | | |
| 128.2 | |
Adjustments to reconcile profit before tax to net cash flows generated from operating activities | |
| | | |
| | | |
| | |
Depreciation and amortization | |
| 564 | | |
| 624 | | |
| 7.2 | |
Foreign exchange loss/(gain), net | |
| 2,810 | | |
| (2,115 | ) | |
| (24.3 | ) |
Interest income, net | |
| (3,212 | ) | |
| (3,540 | ) | |
| (40.7 | ) |
Credit loss expense | |
| 694 | | |
| 282 | | |
| 3.2 | |
Share of loss of an associate | |
| - | | |
| 44 | | |
| 0.5 | |
Gain from disposal of subsidiary | |
| - | | |
| (424 | ) | |
| (4.9 | ) |
Impairment of non-current assets | |
| 36 | | |
| - | | |
| - | |
Other | |
| 78 | | |
| 277 | | |
| 3.2 | |
Net cash flow generated from operating activities before changes in working capital | |
| 8,271 | | |
| 6,309 | | |
| 72.5 | |
Changes in operating assets and liabilities: | |
| | | |
| | | |
| | |
Decrease/(Increase) in trade and other receivables | |
| (1,739 | ) | |
| 2,847 | | |
| 27.4 | |
Decrease in other assets | |
| 144 | | |
| 884 | | |
| 15.5 | |
Increase in customer accounts and amounts due to banks | |
| 3,728 | | |
| 3,213 | | |
| 36.9 | |
Decrease in accounts payable and accruals | |
| (5,345 | ) | |
| (4,519 | ) | |
| (51.9 | ) |
(Decrease)/Increase in other liabilities | |
| 313 | | |
| (328 | ) | |
| (3.8 | ) |
Increase in loans issued as operating activity | |
| (1,670 | ) | |
| (2,459 | ) | |
| (28.3 | ) |
Cash generated from operations | |
| 3,702 | | |
| 5,947 | | |
| 68.3 | |
Interest received | |
| 3,569 | | |
| 4,140 | | |
| 47.6 | |
Interest paid | |
| (283 | ) | |
| (196 | ) | |
| (2.3 | ) |
Income tax paid | |
| (1,033 | ) | |
| (2,266 | ) | |
| (26.0 | ) |
Net cash flow generated from operating activities | |
| 5,955 | | |
| 7,625 | | |
| 87.6 | |
Investing activities | |
| | | |
| | | |
| | |
Proceeds from sale of an associate | |
| 4,855 | | |
| - | | |
| - | |
Cash paid for investments in associates | |
| - | | |
| (315 | ) | |
| (3.6 | ) |
Cash used in business combinations | |
| (215 | ) | |
| (50 | ) | |
| (0.6 | ) |
Purchase of property and equipment | |
| (133 | ) | |
| (359 | ) | |
| (4.1 | ) |
Purchase of intangible assets | |
| (106 | ) | |
| (141 | ) | |
| (1.6 | ) |
Proceeds from sale of fixed and intangible assets | |
| 5 | | |
| 27 | | |
| 0.3 | |
Loans issued | |
| (7 | ) | |
| (19 | ) | |
| (0.2 | ) |
Repayment of loans issued | |
| 30 | | |
| 79 | | |
| 0.9 | |
Purchase of debt securities | |
| (1,737 | ) | |
| (19,873 | ) | |
| (228.3 | ) |
Proceeds from sale and redemption of debt instruments | |
| - | | |
| 3,150 | | |
| 36.2 | |
Net cash flow generated from investing activities | |
| 2,692 | | |
| (17,501 | ) | |
| (201.1 | ) |
Financing activities | |
| | | |
| | | |
| | |
Repayment of debt | |
| (392 | ) | |
| (161 | ) | |
| (1.8 | ) |
Payment of principal portion of lease liabilities | |
| (34 | ) | |
| (57 | ) | |
| (0.7 | ) |
Dividends paid to non-controlling shareholders | |
| (106 | ) | |
| (218 | ) | |
| (2.5 | ) |
Transactions with non-controlling interest | |
| - | | |
| (304 | ) | |
| (3.5 | ) |
Net cash flow used in financing activities | |
| (532 | ) | |
| (740 | ) | |
| (8.5 | ) |
Effect of exchange rate changes on cash and cash equivalents | |
| (2,068 | ) | |
| 2,724 | | |
| 31.3 | |
Effect of change in ECL on cash and cash equivalents | |
| (10 | ) | |
| - | | |
| - | |
Net increase/(decrease) in cash and cash equivalents equivalents | |
| 6,037 | | |
| (7,892 | ) | |
| (90.7 | ) |
Cash and cash equivalents at the beginning of the period | |
| 33,033 | | |
| 47,462 | | |
| 545.3 | |
Cash and cash equivalents at the end of the period | |
| 39,070 | | |
| 39,570 | | |
| 454.6 | |
Non-IFRS Financial Measures and Supplemental Financial Information
This
release presents Total Net Revenue, Payment Services (PS) Net Revenue, PS Payment Net Revenue, PS Other Net Revenue, Digital Marketing
(DM) Net Revenue, Corporate and Other (CO) Net Revenue, Adjusted
EBITDA, Adjusted EBITDA margin, Adjusted Net Profit, PS Adjusted Net Profit, DM Adjusted Net Profit, CO Adjusted Net Profit, and Adjusted
Net Profit per share, which are non-IFRS financial measures. You should not consider these non-IFRS financial measures as substitutes
for or superior to revenue, in the case of Total Net Revenue, PS Net Revenue, PS Payment Net Revenue, PS Other Net Revenue, DM Net Revenue,
CO Net Revenue; Net Profit, in the case of Adjusted EBITDA, Adjusted Net Profit, PS Adjusted Net Profit, DM Adjusted Net Profit, CO Adjusted
Net Profit, and earnings per share, in the case of Adjusted Net Profit per share, each prepared in accordance with IFRS.
Furthermore, because these non-IFRS financial
measures are not determined in accordance with IFRS, they are susceptible to varying calculations and may not be comparable to other similarly
titled measures presented by other companies. QIWI encourages investors and others to review our financial information in its entirety
and not rely on a single financial measure. For more information regarding Total Net Revenue, PS Net Revenue, PS Payment Net Revenue,
PS Other Net Revenue, DM Net Revenue, CO Net Revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Profit and Adjusted Net Profit
per share, including a quantitative reconciliation of Total Net Revenue and its breakdown by segments, Adjusted EBITDA and Adjusted Net
Profit to the most directly comparable IFRS financial performance measures, which is revenue in the case of Total Net Revenue, PS Payment
Net Revenue and PS Other Net Revenue, and Net Profit in the case of Adjusted EBITDA and Adjusted Net Profit, see Reconciliation of IFRS
to Non-IFRS Operating Results in this earnings release.
We define non-IFRS financial measures as follows:
| ● | “Total Net Revenue” is calculated by subtracting cost of revenue from revenue. |
| ● | “Adjusted EBITDA” as Net profit plus/(less): (1) depreciation and amortization, (2) other
expenses/(income), (3) foreign exchange loss/(gain), (4) share of loss/(gain) of associates and joint ventures, (5) interest
expenses/ (income), (6) income tax expenses, (7) share-based payment expenses, (8) impairment of non-current assets, (9) loss/(gain)
on disposal of subsidiary. |
| ● | “Adjusted Net profit” as Net profit plus/(less): (1) fair value adjustments recorded
on business combinations and their amortization, (2) impairment of non-current assets, (3) share-based payment expenses, (4) loss/(gain)
on disposal of subsidiary, (5) effect of taxation of the above items. |
| ● | “Adjusted EBITDA Margin” as Adjusted EBITDA divided by Total Net Revenue. |
| ● | “Adjusted Net profit Margin” as Adjusted Net profit divided by Total Net Revenue. |
Total
Net Revenue is a key measure used by management to observe our operational profitability since it reflects our portion
of the revenue net of fees that we pass through, primarily to our agents and other reload channels providers. In addition, under IFRS,
most types of fees are presented on a gross basis whereas certain types of fees are presented on a net basis. Therefore, in order to analyze
our two sources of payment processing fees on a comparative basis, management reviews Total Net Revenue.
We provide a breakdown of Total Net Revenue by
segments - PS Net Revenue, including PS Payment Net Revenue and PS Other Net Revenue, DM Net Revenue, CO Net Revenue. We define the above
measures as follows:
| ● | PS Payment Net Revenue is the Net Revenue comprising the merchant and consumer fees collected
for the payment transactions. |
| ● | PS Other Net Revenue primarily comprises revenue from fees for inactive accounts and unclaimed
payments, interest revenue, cash and settlement services and related conversion income, fees for intercompany and third-party funding,
and advertising fees. |
| ● | DM Net Revenue includes revenue generated with services provided for context and media advertising
management services, including platform services under subscription, social network presence, programmatic, CPA and mobile marketing type
of services. The segment includes results of full-cycle digital marketing service provider RealWeb and Flocktory services in marketing
automation and advertising technologies. |
| ● | CO Net Revenue comprises from results of ROWI business, Tochka project (before 2Q2022) and
Corporate and Other projects, including interest income. |
Adjusted
EBITDA is a key measure used by management as a supplemental performance measure that facilitates operating performance
comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures
(affecting interest expenses, net), changes in foreign exchange rates that impact financial assets and liabilities denominated in currencies
other than our functional currency (affecting foreign exchange (loss)/gain, net), tax positions (such as the impact on periods or companies
of changes in effective tax rates), the age and book depreciation of fixed assets (affecting relative depreciation expense), non-cash
charges (affecting share-based payments expenses and impairment of non-current assets), and certain one-time income and expenses (affecting
other income, offering and related expenses, etc.). Adjusted EBITDA also excludes other expenses, share in losses of associates and
impairment of investment in associates because we believe it is helpful to view the performance of our business excluding the impact of
entities that we do not control, and because our share of the net income (loss) of associates and other expenses includes items that have
been excluded from Adjusted EBITDA (such as finance expenses, net, income tax, and depreciation and amortization). Because Adjusted EBITDA
facilitates internal comparisons of operating performance on a more consistent basis, we also use Adjusted EBITDA in measuring our performance
relative to that of our competitors.
Adjusted
Net Profit is a key measure used by management to observe the operational profitability of the company. We believe Adjusted
Net Profit is useful to an investor in evaluating our operating performance because it measures a company’s operating performance
without the effect of non-recurring items or items that are not core to our operations. For example, loss on disposals of subsidiaries
and the effects of deferred taxation on excluded items do not represent the core operations of the business, and fair value adjustments
recorded on business combinations and their amortization, impairment of non-current assets and share-based payments expenses
do not have a substantial cash effect. Nevertheless, such gains and losses can affect our financial performance.
In
order to reflect the operational profitability of each segment, we provide a following breakdown of Adjusted Net Profit: Payment
Services Adjusted Net Profit, Digital Marketing Adjusted Net Profit, Corporate and Other Adjusted Net Profit.
Payment
Services segment payment volume provides a measure of the overall size and growth of the business, and increasing our payment
volumes is essential to growing our profitability.
Payment
Services segment net revenue yield. We calculate Payment Services segment net revenue yield by dividing Payment Services
segment net revenue by Payment Services segment payment volume. Payment Services segment net revenue yield provides a measure of our ability
to generate net revenue per unit of volume we process.
QIWI plc.
Reconciliation of IFRS to Non-IFRS Operating
Results
(in millions, except per share data)
| |
Three months ended (unaudited) | |
| |
June 30, 2022 | | |
June 30, 2023 | | |
June 30, 2023 | |
| |
RUB | | |
RUB | | |
USD | |
Revenue | |
| 14,015 | | |
| 18,037 | | |
| 207.2 | |
Minus: Cost of revenue | |
| 3,807 | | |
| 8,843 | | |
| 101.6 | |
Total Net Revenue | |
| 10,208 | | |
| 9,194 | | |
| 105.6 | |
Segment Net Revenue | |
| | | |
| | | |
| | |
Payment Services Segment Revenue | |
| 12,854 | | |
| 11,087 | | |
| 127.4 | |
| |
| | | |
| | | |
| | |
PS Payment Revenue(1) | |
| 10,839 | | |
| 8,687 | | |
| 99.8 | |
Minus: Cost of PS Payment Revenue (2) | |
| 3,260 | | |
| 3,645 | | |
| 41.9 | |
PS Payment Net Revenue | |
| 7,579 | | |
| 5,042 | | |
| 57.9 | |
| |
| | | |
| | | |
| | |
PS Other Revenue(3) | |
| 2,015 | | |
| 2,400 | | |
| 27.6 | |
Minus: Cost of PS Other Revenue (4) | |
| 276 | | |
| 227 | | |
| 2.6 | |
PS Other Net Revenue | |
| 1,739 | | |
| 2,173 | | |
| 25.0 | |
Payment Services Segment Net Revenue | |
| 9,318 | | |
| 7,215 | | |
| 82.9 | |
| |
| | | |
| | | |
| | |
Digital Marketing Revenue | |
| 187 | | |
| 5,600 | | |
| 64.3 | |
Minus: Cost of DM revenue | |
| 59 | | |
| 4,669 | | |
| 53.7 | |
Digital Marketing Net Revenue | |
| 128 | | |
| 930 | | |
| 10.7 | |
| |
| | | |
| | | |
| | |
Corporate and Other Category Revenue | |
| 974 | | |
| 1,350 | | |
| 15.5 | |
Minus: Cost of CO Revenue | |
| 212 | | |
| 301 | | |
| 3.5 | |
Corporate and Other Category Net Revenue | |
| 762 | | |
| 1,049 | | |
| 12.1 | |
| |
| | | |
| | | |
| | |
Total Segment Net Revenue | |
| 10,208 | | |
| 9,194 | | |
| 105.6 | |
| |
| | | |
| | | |
| | |
Net profit | |
| 2,810 | | |
| 4,817 | | |
| 55.3 | |
Plus: | |
| | | |
| | | |
| | |
Depreciation and amortization | |
| 287 | | |
| 315 | | |
| 3.6 | |
Other income and expenses, net | |
| (22 | ) | |
| 262 | | |
| 3.0 | |
Foreign exchange (gain)/loss, net | |
| 2,369 | | |
| (1,296 | ) | |
| (14.9 | ) |
Gain on disposal of subsidiary | |
| - | | |
| - | | |
| - | |
Share of gain/(loss) of an associate | |
| - | | |
| 5 | | |
| 0.1 | |
Income tax expenses | |
| 1,433 | | |
| 954 | | |
| 11.0 | |
Share-based payment expenses | |
| 59 | | |
| - | | |
| - | |
Impairment of non-current assets | |
| 36 | | |
| - | | |
| - | |
Adjusted EBITDA | |
| 6,972 | | |
| 5,057 | | |
| 58.1 | |
Adjusted EBITDA margin | |
| 68.3 | % | |
| 55.0 | % | |
| 55.0 | % |
| |
| | | |
| | | |
| | |
Net profit | |
| 2,810 | | |
| 4,817 | | |
| 55.3 | |
Fair value adjustments recorded on business combinations and their amortization(5) | |
| 98 | | |
| 438 | | |
| 5.0 | |
Impairment of non-current assets | |
| 36 | | |
| - | | |
| - | |
Share-based payment expenses | |
| 59 | | |
| - | | |
| - | |
Gain on disposal of subsidiary | |
| - | | |
| - | | |
| - | |
Effect from taxation of the above items | |
| (39 | ) | |
| (21 | ) | |
| (0.2 | ) |
Adjusted Net Profit | |
| 2,964 | | |
| 5,234 | | |
| 60.0 | |
| |
| | | |
| | | |
| | |
Adjusted Net Profit per share: | |
| | | |
| | | |
| | |
Basic | |
| 47.35 | | |
| 83.46 | | |
| 0.96 | |
Diluted | |
| 47.35 | | |
| 83.46 | | |
| 0.96 | |
| |
| | | |
| | | |
| | |
Weighted-average number of shares used in computing Adjusted Net Profit per share: | |
| | | |
| | | |
| | |
Basic | |
| 62,600 | | |
| 62,713 | | |
| 62,713 | |
Diluted | |
| 62,600 | | |
| 62,713 | | |
| 62,713 | |
| (1) | PS Payment Revenue represents payment processing fees, which primarily consists of the merchant and consumer
fees charged for the payment transactions. |
| (2) | Cost of PS Payment Revenue primarily consists of transaction costs to acquire payments from our customers
payable to agents, mobile operators, international payment systems and other parties. |
| (3) | PS Other Revenue primarily consists of revenue from fees for inactive accounts and unclaimed payments,
interest revenue, cash and settlement services and related conversion income, fees for intercompany and third-party funding, and advertising
fees. |
| (4) | Cost of PS Other Revenue primarily consists of direct costs associated with other revenue and other costs,
including but not limited to: interest expenses related to issued bonds, costs of sms notification, advertising commissions. |
| (5) | Amortization of fair value adjustments primarily includes the effect of the acquisition of control in
CONTACT, Rapida and Realweb. |
QIWI plc.
Reconciliation of IFRS to Non-IFRS Operating
Results
(in millions, except per share data)
| |
Six months ended (unaudited) | |
| |
June 30, 2022 | | |
June 30, 2023 | | |
June 30, 2023 | |
| |
RUB | | |
RUB | | |
USD | |
Revenue | |
| 23,732 | | |
| 35,909 | | |
| 412.6 | |
Minus: Cost of revenue | |
| 7,219 | | |
| 18,163 | | |
| 208.7 | |
Total Net Revenue | |
| 16,513 | | |
| 17,746 | | |
| 203.9 | |
Segment Net Revenue | |
| | | |
| | | |
| | |
Payment Services Segment Revenue | |
| 21,584 | | |
| 21,890 | | |
| 251.5 | |
| |
| | | |
| | | |
| | |
PS Payment Revenue(1) | |
| 17,787 | | |
| 17,435 | | |
| 200.3 | |
Minus: Cost of PS Payment Revenue (2) | |
| 6,088 | | |
| 7,307 | | |
| 84.0 | |
PS Payment Net Revenue | |
| 11,699 | | |
| 10,128 | | |
| 116.4 | |
| |
| | | |
| | | |
| | |
PS Other Revenue(3) | |
| 3,797 | | |
| 4,455 | | |
| 51.2 | |
Minus: Cost of PS Other Revenue (4) | |
| 529 | | |
| 424 | | |
| 4.9 | |
PS Other Net Revenue | |
| 3,268 | | |
| 4,031 | | |
| 46.3 | |
Payment Services Segment Net Revenue | |
| 14,967 | | |
| 14,159 | | |
| 162.7 | |
| |
| | | |
| | | |
| | |
Digital Marketing Revenue | |
| 388 | | |
| 11,522 | | |
| 132.4 | |
Minus: Cost of DM revenue | |
| 103 | | |
| 9,851 | | |
| 113.2 | |
Digital Marketing Net Revenue | |
| 285 | | |
| 1,671 | | |
| 19.2 | |
| |
| | | |
| | | |
| | |
Corporate and Other Category Revenue | |
| 1,760 | | |
| 2,497 | | |
| 28.7 | |
Minus: Cost of CO Revenue | |
| 498 | | |
| 581 | | |
| 6.7 | |
Corporate and Other Category Net Revenue | |
| 1,261 | | |
| 1,916 | | |
| 22.0 | |
| |
| | | |
| | | |
| | |
Total Segment Net Revenue | |
| 16,513 | | |
| 17,746 | | |
| 203.9 | |
| |
| | | |
| | | |
| | |
Profit for the period | |
| 5,067 | | |
| 9,316 | | |
| 107.0 | |
Plus: | |
| | | |
| | | |
| | |
Depreciation and amortization | |
| 564 | | |
| 624 | | |
| 7.2 | |
Other income and expenses, net | |
| (111 | ) | |
| 246 | | |
| 2.8 | |
Foreign exchange (gain)/loss, net | |
| 2,810 | | |
| (2,115 | ) | |
| (24.3 | ) |
Gain on disposal of an associate | |
| - | | |
| (424 | ) | |
| (4.9 | ) |
Share of gain of an associate and a joint venture | |
| - | | |
| 44 | | |
| 0.5 | |
Income tax expenses | |
| 2,234 | | |
| 1,845 | | |
| 21.2 | |
Share-based payment expenses | |
| 59 | | |
| - | | |
| - | |
Impairment of non-current assets | |
| 36 | | |
| - | | |
| - | |
Adjusted EBITDA | |
| 10,659 | | |
| 9,536 | | |
| 109.6 | |
Adjusted EBITDA margin | |
| 64.5 | % | |
| 53.7 | % | |
| 53.7 | % |
| |
| | | |
| | | |
| | |
Profit for the period | |
| 5,067 | | |
| 9,316 | | |
| 107.0 | |
Fair value adjustments recorded on business combinations and their amortization(5) | |
| 181 | | |
| 563 | | |
| 6.5 | |
Impairment of non-current assets | |
| 36 | | |
| - | | |
| - | |
Share-based payment expenses | |
| 59 | | |
| - | | |
| - | |
Gain on disposal of an associate | |
| - | | |
| (424 | ) | |
| (4.9 | ) |
Effect from taxation of the above items | |
| (53 | ) | |
| (41 | ) | |
| (0.5 | ) |
Adjusted Net Profit | |
| 5,290 | | |
| 9,414 | | |
| 108.2 | |
| |
| | | |
| | | |
| | |
Adjusted Net Profit per share: | |
| | | |
| | | |
| | |
Basic | |
| 84.61 | | |
| 150.11 | | |
| 1.72 | |
Diluted | |
| 84.61 | | |
| 150.11 | | |
| 1.72 | |
| |
| | | |
| | | |
| | |
Weighted-average number of shares used in computing Adjusted Net Profit per share: | |
| | | |
| | | |
| | |
Basic | |
| 62,525 | | |
| 62,713 | | |
| 62,713 | |
Diluted | |
| 62,525 | | |
| 62,713 | | |
| 62,713 | |
| (1) | PS Payment Revenue represents payment processing fees, which primarily consists of the merchant and consumer
fees charged for the payment transactions. |
| (2) | Cost of PS Payment Revenue primarily consists of transaction costs to acquire payments from our customers
payable to agents, mobile operators, international payment systems and other parties. |
| (3) | PS Other Revenue primarily consists of revenue from fees for inactive accounts and unclaimed payments,
interest revenue, cash and settlement services and related conversion income, fees for intercompany and third-party funding, and advertising
fees. |
| (4) | Cost of PS Other Revenue primarily consists of direct costs associated with other revenue and other costs,
including but not limited to: interest expenses related to issued bonds, costs of sms notification, advertising commissions. |
| (5) | Amortization of fair value adjustments primarily includes the effect of the acquisition of control in
CONTACT, Rapida and Realweb. |
Exhibit 99.2
QIWI plc
Unaudited interim
condensed consolidated
financial statements
June 30,
2023
QIWI plc
Unaudited interim
condensed consolidated financial statements
June 30, 2023
Content
Report of Independent Registered Public
Accounting Firm |
F-2 |
|
|
Interim condensed consolidated financial
statements |
|
|
|
Interim condensed
consolidated statement of financial position |
F-3 |
Interim condensed consolidated
statement of comprehensive income |
F-4 |
Interim condensed consolidated
statement of cash flows |
F-5 |
Interim condensed consolidated
statement of changes in equity |
F-6 |
|
|
Notes to interim condensed consolidated
financial statements |
F-8 |
Report of Independent Registered Public Accounting
Firm
To the Shareholders and Board of Directors
QIWI plc:
Results of Review of Interim Financial Information
We have reviewed the interim condensed consolidated
statement of financial position of QIWI plc and subsidiaries (the “Group”) as of June 30, 2023, the related interim condensed
consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2023 and 2022, interim condensed
consolidated statements of cash flows and changes in equity for the six-month periods ended June 30, 2023 and 2022, and the related
notes (collectively referred to as the “interim condensed consolidated financial information”). Based on our reviews, we are
not aware of any material modifications that should be made to the interim condensed consolidated financial information for it to be in
conformity with IAS 34 Interim Financial Reporting.
We have previously audited, in accordance with
the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position
of the Group as of December 31, 2022, the related consolidated statements of comprehensive income, cash flows and changes in equity
for the year then ended, and the related notes (not presented herein); and in our report dated March 31, 2023, we expressed an unqualified
audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated
statement of financial position as of December 31, 2022, is fairly stated, in all material respects, in relation to the consolidated
statement of financial position from which it has been derived.
Basis for Review Results
This interim condensed consolidated financial
information is the responsibility of the Group’s management. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with the
standards of the PCAOB. A review of interim consolidated condensed financial information consists principally of applying analytical procedures
and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted
in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
/s/ JSC “Kept”
Moscow, Russia
August 16, 2023
QIWI plc
Interim condensed
consolidated statement of financial position
(in millions
of rubles)
| |
Notes | | |
As of December 31, 2022 | | |
As of June 30, 2023 (Unaudited) | |
Assets | |
| | | |
| | | |
| | |
Non-current assets | |
| | | |
| | | |
| | |
Property and equipment | |
| | | |
| 1,163 | | |
| 1,271 | |
Goodwill and other intangible assets | |
| | | |
| 13,126 | | |
| 13,077 | |
Investments in associates | |
| 13 | | |
| 303 | | |
| 579 | |
Long-term debt securities | |
| 21 | | |
| 2,946 | | |
| 4,991 | |
Long-term loans issued | |
| 6, 21 | | |
| 843 | | |
| 623 | |
Other non-current assets | |
| | | |
| 257 | | |
| 241 | |
Deferred tax assets | |
| | | |
| 208 | | |
| 242 | |
Total non-current assets | |
| | | |
| 18,846 | | |
| 21,024 | |
| |
| | | |
| | | |
| | |
Current assets | |
| | | |
| | | |
| | |
Trade and other receivables | |
| 7 | | |
| 15,194 | | |
| 12,169 | |
Short-term loans issued | |
| 6 | | |
| 14,200 | | |
| 16,728 | |
Short-term debt securities | |
| 21 | | |
| 14,029 | | |
| 28,809 | |
Other current assets | |
| 9 | | |
| 2,195 | | |
| 1,846 | |
Cash and cash equivalents | |
| 8 | | |
| 47,462 | | |
| 39,570 | |
Total current assets | |
| | | |
| 93,080 | | |
| 99,122 | |
Total assets | |
| | | |
| 111,926 | | |
| 120,146 | |
| |
| | | |
| | | |
| | |
Equity and liabilities | |
| | | |
| | | |
| | |
Equity attributable to equity holders of the parent | |
| | | |
| | | |
| | |
Share capital | |
| | | |
| 1 | | |
| 1 | |
Additional paid-in capital | |
| | | |
| 1,876 | | |
| 1,876 | |
Share premium | |
| | | |
| 12,068 | | |
| 12,068 | |
Other reserves | |
| | | |
| 2,696 | | |
| 2,352 | |
Retained earnings | |
| | | |
| 39,941 | | |
| 48,935 | |
Translation reserve | |
| | | |
| 401 | | |
| 169 | |
Total equity attributable to equity holders of the parent | |
| | | |
| 56,983 | | |
| 65,401 | |
Non-controlling interests | |
| | | |
| 912 | | |
| 977 | |
Total equity | |
| | | |
| 57,895 | | |
| 66,378 | |
| |
| | | |
| | | |
| | |
Non-current liabilities | |
| | | |
| | | |
| | |
Long-term deferred income | |
| | | |
| 1,154 | | |
| 1,062 | |
Long-term lease liabilities | |
| 14 | | |
| 133 | | |
| 84 | |
Other non-current liabilities | |
| | | |
| 156 | | |
| 81 | |
Deferred tax liabilities | |
| | | |
| 1,847 | | |
| 1,749 | |
Total non-current liabilities | |
| | | |
| 3,290 | | |
| 2,976 | |
| |
| | | |
| | | |
| | |
Current liabilities | |
| | | |
| | | |
| | |
Trade and other payables | |
| 10 | | |
| 33,048 | | |
| 29,740 | |
Customer accounts and amounts due to banks | |
| 11 | | |
| 11,203 | | |
| 15,011 | |
Short-term debt | |
| 12 | | |
| 3,922 | | |
| 3,745 | |
Short-term lease liabilities | |
| 14 | | |
| 300 | | |
| 302 | |
Other current liabilities | |
| 9 | | |
| 2,268 | | |
| 1,994 | |
Total current liabilities | |
| | | |
| 50,741 | | |
| 50,792 | |
Total equity and liabilities | |
| | | |
| 111,926 | | |
| 120,146 | |
The accompanying notes form an integral
part of these interim condensed consolidated financial statements.
QIWI
plc
Interim condensed
consolidated statement of comprehensive income
(in millions
of rubles, except per share data)
(Unaudited)
| |
Notes | | |
Three months ended | | |
Six months ended | | |
Three months ended | | |
Six months ended | |
| |
| | |
June 30, 2022 | | |
June 30, 2023 | |
Revenue: | |
| | | |
| 14,015 | | |
| 23,732 | | |
| 18,037 | | |
| 35,909 | |
Revenue from contracts with customers | |
| 15 | | |
| 11,650 | | |
| 19,460 | | |
| 15,645 | | |
| 31,373 | |
Interest revenue calculated using the effective interest rate | |
| 15 | | |
| 1,929 | | |
| 3,381 | | |
| 1,944 | | |
| 3,708 | |
Fees from inactive accounts and unclaimed payments | |
| | | |
| 436 | | |
| 891 | | |
| 448 | | |
| 828 | |
Operating costs and expenses: | |
| | | |
| (7,425 | ) | |
| (13,732 | ) | |
| (13,295 | ) | |
| (26,997 | ) |
Cost of revenue (exclusive of items shown separately below) | |
| 16 | | |
| (3,807 | ) | |
| (7,219 | ) | |
| (8,843 | ) | |
| (18,163 | ) |
Selling, general and administrative expenses | |
| 17 | | |
| (773 | ) | |
| (1,544 | ) | |
| (1,184 | ) | |
| (2,143 | ) |
Personnel expenses | |
| | | |
| (2,002 | ) | |
| (3,675 | ) | |
| (3,034 | ) | |
| (5,785 | ) |
Depreciation and amortization | |
| | | |
| (287 | ) | |
| (564 | ) | |
| (315 | ) | |
| (624 | ) |
Credit loss (expense)/income | |
| 6,7,8 | | |
| (520 | ) | |
| (694 | ) | |
| 81 | | |
| (282 | ) |
Impairment of non-current assets | |
| | | |
| (36 | ) | |
| (36 | ) | |
| – | | |
| – | |
Profit from operations | |
| | | |
| 6,590 | | |
| 10,000 | | |
| 4,742 | | |
| 8,912 | |
Gain from disposal of subsidiary | |
| | | |
| – | | |
| – | | |
| – | | |
| 424 | |
Share of loss of an associate | |
| | | |
| – | | |
| – | | |
| (5 | ) | |
| (44 | ) |
Foreign exchange gain/(loss), net | |
| | | |
| (2,369 | ) | |
| (2,810 | ) | |
| 1,296 | | |
| 2,115 | |
Other income and expenses, net | |
| | | |
| 22 | | |
| 111 | | |
| (262 | ) | |
| (246 | ) |
Profit before tax | |
| | | |
| 4,243 | | |
| 7,301 | | |
| 5,771 | | |
| 11,161 | |
Income tax expense | |
| 18 | | |
| (1,433 | ) | |
| (2,234 | ) | |
| (954 | ) | |
| (1,845 | ) |
Net profit for the period | |
| | | |
| 2,810 | | |
| 5,067 | | |
| 4,817 | | |
| 9,316 | |
Attributable to: | |
| | | |
| | | |
| | | |
| | | |
| | |
Equity holders of the parent | |
| | | |
| 2,625 | | |
| 4,799 | | |
| 4,653 | | |
| 8,994 | |
Non-controlling interests | |
| | | |
| 185 | | |
| 268 | | |
| 164 | | |
| 322 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Other comprehensive (loss)/income | |
| | | |
| | | |
| | | |
| | | |
| | |
Other comprehensive income to be reclassified to profit or loss in subsequent periods: | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation: | |
| | | |
| | | |
| | | |
| | | |
| | |
Exchange differences on translation of foreign operations | |
| | | |
| 88 | | |
| 76 | | |
| 143 | | |
| 213 | |
Net gain recycled to profit or loss upon disposal | |
| | | |
| – | | |
| – | | |
| – | | |
| (424 | ) |
Debt securities at fair value through other comprehensive income (FVOCI): | |
| | | |
| | | |
| | | |
| | | |
| | |
Net gain/(loss) arising during the period, net of tax | |
| | | |
| 964 | | |
| 110 | | |
| (77 | ) | |
| (64 | ) |
Net gain recycled to profit or loss upon disposal | |
| | | |
| – | | |
| – | | |
| (18 | ) | |
| (18 | ) |
Share of other comprehensive Income of an associate | |
| | | |
| – | | |
| – | | |
| (1 | ) | |
| 3 | |
Total other comprehensive (loss)/income, net of tax | |
| | | |
| 1,052 | | |
| 186 | | |
| 47 | | |
| (290 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total comprehensive income, net of tax | |
| | | |
| 3,862 | | |
| 5,253 | | |
| 4,864 | | |
| 9,026 | |
Attributable to: | |
| | | |
| | | |
| | | |
| | | |
| | |
Equity holders of the parent | |
| | | |
| 3,697 | | |
| 5,006 | | |
| 4,689 | | |
| 8,683 | |
Non-controlling interests | |
| | | |
| 165 | | |
| 247 | | |
| 175 | | |
| 343 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Earnings per share: | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic, earnings attributable to ordinary equity holders of the parent | |
| | | |
| 41.93 | | |
| 76.75 | | |
| 74.20 | | |
| 143.42 | |
Diluted, earnings attributable to ordinary equity holders of the parent | |
| | | |
| 41.93 | | |
| 76.75 | | |
| 74.20 | | |
| 143.42 | |
The accompanying notes form an integral
part of these interim condensed consolidated financial statements.
QIWI
plc
Interim condensed
consolidated statement of cash flows
(in millions
of rubles)
(Unaudited)
| |
| | |
Six months ended | |
| |
Notes | | |
June 30, 2022 | | |
June 30, 2023 | |
Operating activities | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Profit before tax | |
| | | |
| 7,301 | | |
| 11,161 | |
Adjustments to reconcile profit before tax to net cash flows generated from operating activities: | |
| | | |
| | | |
| | |
Depreciation and amortization | |
| | | |
| 564 | | |
| 624 | |
Foreign exchange loss/(gain), net | |
| | | |
| 2,810 | | |
| (2,115 | ) |
Interest income, net | |
| 15 | | |
| (3,212 | ) | |
| (3,540 | ) |
Credit loss expense | |
| | | |
| 694 | | |
| 282 | |
Share of loss of an associate | |
| | | |
| – | | |
| 44 | |
Gain from disposal of subsidiary | |
| | | |
| – | | |
| (424 | ) |
Impairment of non-current assets | |
| | | |
| 36 | | |
| – | |
Other | |
| | | |
| 78 | | |
| 277 | |
Changes in operating assets and liabilities: | |
| | | |
| | | |
| | |
Decrease/(Increase) in trade and other receivables | |
| | | |
| (1,739 | ) | |
| 2,847 | |
Decrease in other assets | |
| | | |
| 144 | | |
| 884 | |
Increase in customer accounts and amounts due to banks | |
| | | |
| 3,728 | | |
| 3,213 | |
Decrease in accounts payable and accruals | |
| | | |
| (5,345 | ) | |
| (4,519 | ) |
(Decrease)/Increase in other liabilities | |
| | | |
| 313 | | |
| (328 | ) |
Increase in loans issued as operating activity | |
| | | |
| (1,670 | ) | |
| (2,459 | ) |
Cash generated from operations | |
| | | |
| 3,702 | | |
| 5,947 | |
Interest received | |
| | | |
| 3,569 | | |
| 4,140 | |
Interest paid | |
| | | |
| (283 | ) | |
| (196 | ) |
Income tax paid | |
| | | |
| (1,033 | ) | |
| (2,266 | ) |
Net cash flow generated from operating activities | |
| | | |
| 5,955 | | |
| 7,625 | |
Investing activities | |
| | | |
| | | |
| | |
Cash used in business combinations | |
| 4 | | |
| (215 | ) | |
| (50 | ) |
Cash paid for
investments in associates | |
| 4 | | |
| – | | |
| (315 | ) |
Proceeds from sale of an associate | |
| 4 | | |
| 4,855 | | |
| – | |
Purchase of property and equipment | |
| | | |
| (133 | ) | |
| (359 | ) |
Purchase of intangible assets | |
| | | |
| (106 | ) | |
| (141 | ) |
Proceeds from sale of fixed and intangible assets | |
| | | |
| 5 | | |
| 27 | |
Loans issued | |
| | | |
| (7 | ) | |
| (19 | ) |
Repayment of loans issued | |
| | | |
| 30 | | |
| 79 | |
Purchase of debt securities | |
| | | |
| (1,737 | ) | |
| (19,873 | ) |
Proceeds from sale and redemption of debt instruments | |
| | | |
| – | | |
| 3,150 | |
Net cash flow generated from investing activities | |
| | | |
| 2,692 | | |
| (17,501 | ) |
Financing activities | |
| | | |
| | | |
| | |
Repayment of debt | |
| | | |
| (392 | ) | |
| (161 | ) |
Payment of principal portion of lease liabilities | |
| 14 | | |
| (34 | ) | |
| (57 | ) |
Dividends paid to non-controlling shareholders | |
| | | |
| (106 | ) | |
| (218 | ) |
Transactions with non-controlling interest | |
| | | |
| – | | |
| (304 | ) |
Net cash flow used in financing activities | |
| | | |
| (532 | ) | |
| (740 | ) |
Effect of exchange rate changes on cash and cash equivalents | |
| | | |
| (2,068 | ) | |
| 2,724 | |
Effect of change in ECL on cash and cash equivalents | |
| | | |
| (10 | ) | |
| – | |
Net increase/(decrease) in cash and cash equivalents | |
| | | |
| 6,037 | | |
| (7,892 | ) |
Cash and cash equivalents at the beginning of the period | |
| 8 | | |
| 33,033 | | |
| 47,462 | |
Cash and cash equivalents at the end of the period | |
| 8 | | |
| 39,070 | | |
| 39,570 | |
The accompanying notes form an integral
part of these interim condensed consolidated financial statements.
QIWI
plc
Interim condensed
consolidated statement of changes in equity
(in
millions of rubles, except number
of shares)
(Unaudited)
| |
| |
Attributable to equity holders of the parent | | |
| | |
| |
| |
| |
Share
capital | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
Notes | |
Number
of shares issued and outstanding | | |
Amount | | |
Additional
paid-in capital | | |
Share
premium | | |
Other
reserves | | |
Retained
earnings | | |
Translation
reserve | | |
Total | | |
Non-
controlling interests | | |
Total
equity | |
Balance as
of January 1, 2023 | |
| |
| 62,712,975 | | |
| 1 | | |
| 1,876 | | |
| 12,068 | | |
| 2,696 | | |
| 39,941 | | |
| 401 | | |
| 56,983 | | |
| 912 | | |
| 57,895 | |
Profit for the period | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 8,994 | | |
| – | | |
| 8,994 | | |
| 322 | | |
| 9,316 | |
Other comprehensive income: | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (232 | ) | |
| (232 | ) | |
| 21 | | |
| (211 | ) |
Debt instruments at FVOCI | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| (82 | ) | |
| – | | |
| – | | |
| (82 | ) | |
| – | | |
| (82 | ) |
Share of OCI of an associate | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| 3 | | |
| – | | |
| – | | |
| 3 | | |
| – | | |
| 3 | |
Total
comprehensive income for the period | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| (79 | ) | |
| 8,994 | | |
| (232 | ) | |
| 8,683 | | |
| 343 | | |
| 9,026 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Purchase of additional interest
in subsidiary | |
4 | |
| – | | |
| – | | |
| – | | |
| – | | |
| (265 | ) | |
| – | | |
| – | | |
| (265 | ) | |
| (39 | ) | |
| (304 | ) |
Dividends to non-controlling
interests | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (218 | ) | |
| (218 | ) |
Other | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (21 | ) | |
| (21 | ) |
Balance
as of June 30, 2023 | |
| |
| 62,712,975 | | |
| 1 | | |
| 1,876 | | |
| 12,068 | | |
| 2,352 | | |
| 48,935 | | |
| 169 | | |
| 65,401 | | |
| 977 | | |
| 66,378 | |
The accompanying notes form an integral
part of these interim condensed consolidated financial statements.
QIWI
plc
Interim condensed
consolidated statement of changes in equity (continued)
(in
millions of rubles, except number
of shares)
(Unaudited)
| |
| |
Attributable to equity holders of the
parent | | |
| | |
| |
| |
| |
Share
capital | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
Notes | |
Number
of shares issued and outstanding | | |
Amount | | |
Additional
paid-in capital | | |
Share
premium | | |
Other
reserves | | |
Retained
earnings | | |
Translation
reserve | | |
Total | | |
Non-
controlling interests | | |
Total
equity | |
Balance as
of January 1, 2022 | |
| |
| 62,437,768 | | |
| 1 | | |
| 1,876 | | |
| 12,068 | | |
| 2,376 | | |
| 26,822 | | |
| 542 | | |
| 43,685 | | |
| 155 | | |
| 43,840 | |
Profit for the period | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 4,799 | | |
| – | | |
| 4,799 | | |
| 268 | | |
| 5,067 | |
Other comprehensive income: | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 97 | | |
| 97 | | |
| (21 | ) | |
| 76 | |
Debt instruments
at FVOCI | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| 110 | | |
| – | | |
| – | | |
| 110 | | |
| – | | |
| 110 | |
Total
comprehensive income for the period | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| 110 | | |
| 4,799 | | |
| 97 | | |
| 5,006 | | |
| 247 | | |
| 5,253 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Share-based payments | |
| |
| 263,841 | | |
| – | | |
| – | | |
| – | | |
| 86 | | |
| – | | |
| – | | |
| 86 | | |
| – | | |
| 86 | |
Exercise of options | |
| |
| 11,366 | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | |
Dividends to non-controlling
interests | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (106 | ) | |
| (106 | ) |
Business combinations | |
4 | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 39 | | |
| 39 | |
Other | |
| |
| – | | |
| – | | |
| – | | |
| – | | |
| (1 | ) | |
| – | | |
| – | | |
| (1 | ) | |
| – | | |
| (1 | ) |
Balance
as of June 30, 2022 | |
| |
| 62,712,975 | | |
| 1 | | |
| 1,876 | | |
| 12,068 | | |
| 2,571 | | |
| 31,621 | | |
| 639 | | |
| 48,776 | | |
| 335 | | |
| 49,111 | |
The accompanying notes form an integral
part of these interim condensed consolidated financial statements.
QIWI
plc
Notes to interim
condensed consolidated financial statements (Unaudited)
(in millions
of rubles, except when otherwise indicated)
1. | Corporate Information and description
of business |
The interim condensed consolidated financial
statements of QIWI plc (hereinafter “the Company”) and its subsidiaries (collectively “the Group”) for the three
and six months ended June 30, 2023 were authorized for issue on August 16, 2023.
The Company was registered on February 26,
2007 as a limited liability company OE Investments in Cyprus under the Cyprus Companies Law, Cap. 113. The registered office of the Company
is Kennedy 12, Kennedy Business Centre, 2nd Floor, P.C.1087, Nicosia, Cyprus. On September 13, 2010 the directors of the Company
resolved to change the name of the Company from OE Investments Limited to QIWI Limited and later to QIWI plc.
Sergey Solonin is the ultimate controlling
shareholder of the Group as of June 30, 2023.
Information on the Company’s principal
subsidiaries is disclosed in Note 3.
2. | Basis of preparation and changes
to the Group’s accounting policies |
2.1. Basis of preparation
The interim condensed consolidated financial
statements for the three and six months ended June 30, 2023 have been prepared in accordance with IAS 34 Interim Financial Reporting.
The interim condensed consolidated financial
statements are presented in Russian rubles (“RUB”) and all values are rounded to the nearest million except where otherwise
indicated.
The interim condensed consolidated financial
statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction
with the Group’s annual financial statements as of December 31, 2022, included in the annual report on form 20-F.
2.2. New standards, interpretations
and amendments adopted by the Group
The accounting policies adopted in
the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of
the Group’s annual consolidated financial statements for the year ended December 31, 2022, except for the adoption of new
and amended IFRS and IFRIC interpretations effective as of January 1, 2023. The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet effective.
The following amended standards and
interpretations became effective for the Group from January 1, 2023, but did not have any material impact on the financial statements
of the Group:
| - | IFRS
17 Insurance Contracts (issued in May 2017) |
| - | Amendments
to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative
Information (issued in December 2021) |
| - | Amendments
to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of
Accounting policies (issued in February 2021) |
| - | Amendments
to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates (issued in February 2021) |
| - | Amendments
to IAS 12 Income tax: Deferred tax related to assets and liabilities arising from a single
transaction (issued in May 2021) and International Tax Reform—Pillar Two
Model Rules (issued in May 2023) |
2.3. Changes in presentation
In 2023 the Group decided to present Payment processing fees and Other
revenue as a single «Revenue from contracts with customers».
The effects of the change in presentation on the previously reported
amounts in interim condensed consolidated statement of comprehensive income are set out below:
| |
Three months ended | | |
Six months ended | | |
Three months ended | | |
Six months ended | |
| |
June 30, 2022 | | |
June 30, 2022 | |
| |
As previously reported | | |
Restated | |
Revenue from contracts with customers | |
| – | | |
| – | | |
| 11,650 | | |
| 19,460 | |
Payment processing fees | |
| 10,839 | | |
| 17,787 | | |
| – | | |
| – | |
Other revenue | |
| 811 | | |
| 1,673 | | |
| – | | |
| – | |
QIWI plc
Notes to interim
condensed consolidated financial statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
The interim condensed consolidated IFRS
financial statements include the assets, liabilities and financial results of the Company and its subsidiaries. The subsidiaries are
listed below:
| |
| |
Ownership interest | |
Subsidiary | |
Main activity | |
As of December 31, 2022 | | |
As of June 30, 2023 | |
JSC QIWI (Russia) | |
Operation of electronic payment kiosks | |
| 100 | % | |
| 100 | % |
QIWI Bank JSC (Russia) | |
Maintenance of electronic payment systems, money transfers and Bank operations | |
| 100 | % | |
| 100 | % |
QIWI Payments Services Provider Ltd (UAE)1 | |
Operation of online payments | |
| 100 | % | |
| – | |
QIWI International Payment System LLC (USA) | |
Operation of electronic payment kiosks | |
| 100 | % | |
| 100 | % |
Qiwi Kazakhstan LP (Kazakhstan) | |
Operation of electronic payment kiosks | |
| 100 | % | |
| 100 | % |
JLLC OSMP BEL (Belarus) | |
Operation of electronic payment kiosks | |
| 51 | % | |
| 51 | % |
QIWI-M S.R.L. (Moldova) | |
Operation of electronic payment kiosks | |
| 51 | % | |
| 51 | % |
QIWI Technologies LLC (Russia) (Note 4) | |
Software development | |
| 80 | % | |
| 100 | % |
ROWI Factoring Plus LLC (Russia) | |
Factoring services to SME | |
| 51 | % | |
| 51 | % |
ContactPay Solution (United Kingdom) | |
Operation of on-line payments | |
| 100 | % | |
| 100 | % |
Rocket Universe LLC (Russia) | |
Software development | |
| 100 | % | |
| 100 | % |
Billing Online Solutions LLC (Russia) | |
Software development | |
| 100 | % | |
| 100 | % |
Flocktory Ltd (Cyprus) | |
Holding company | |
| 100 | % | |
| 100 | % |
Flocktory Spain S.L. (Spain) | |
SaaS platform for customer lifecycle management and personalization | |
| 100 | % | |
| 100 | % |
FreeAtLast LLC (Russia) | |
SaaS platform for customer lifecycle management and personalization | |
| 100 | % | |
| 100 | % |
SETTE FZ-LLC (UAE) | |
Payment Services Provider | |
| 100 | % | |
| 100 | % |
LALIRA DMCC (UAE) | |
Payment Services Provider | |
| 100 | % | |
| 100 | % |
MFC Polet Finance LLC(Russia) | |
Retail financial services | |
| 100 | % | |
| 100 | % |
QIWI Finance LLC (Russia) | |
Financing management | |
| 100 | % | |
| 100 | % |
ROWI Tech LLC (Russia) | |
Software development | |
| 51 | % | |
| 51 | % |
Flocktory LLC (Russia) | |
Research and development | |
| 100 | % | |
| 100 | % |
Qiwi Lab LLC (Russia) | |
Software development | |
| 100 | % | |
| 100 | % |
QIWI Payments LLC (Russia) (Note 4) | |
Software development | |
| 80 | % | |
| 100 | % |
IntellectMoney LLC (Russia) | |
Software development | |
| 100 | % | |
| 100 | % |
Managing Company "RealWeb" LLC (Russia) | |
Management services | |
| 100 | % | |
| 100 | % |
IA RealWeb LLC (Russia) | |
Digital marketing | |
| 75 | % | |
| 75 | % |
Sfera LLC (Russia) | |
Digital marketing | |
| 83 | % | |
| 83 | % |
Centra LLC (Russia) | |
Software development | |
| 100 | % | |
| 100 | % |
Fusion Tech LLC (Russia) 3 | |
Digital marketing | |
| 100 | % | |
| – | |
De Vision LLC (Russia) | |
Software development | |
| 75 | % | |
| 75 | % |
Vailmobail LLC (Russia) | |
Digital marketing | |
| 75 | % | |
| 75 | % |
Konversiya LLC (Russia) | |
Recruitment services | |
| 75 | % | |
| 75 | % |
IA REAL WEB CJSC (Armenia) | |
Digital marketing | |
| 75 | % | |
| 75 | % |
RW Consulting SIA (Latvia) | |
Digital marketing | |
| 83 | % | |
| 83 | % |
RealWeb Latvia SIA (Latvia) | |
Digital marketing | |
| 83 | % | |
| 83 | % |
IT LAB AND PAYMENTS FE LLC (Uzbekistan) | |
Software development | |
| 100 | % | |
| 100 | % |
Epic Growth LLC (Russia)2 | |
Digital marketing | |
| – | | |
| 83 | % |
Data Go LLC (Russia)2 | |
Software development | |
| – | | |
| 75 | % |
Associate | |
| |
| | | |
| | |
Advanced Digital Applications Holding Ltd (BVI) | |
Operation of on-line payments | |
| 9.91 | % | |
| 12.6 | % |
1 | The entity was liquidated during
2023 |
2 | The entities were acquired in
2023 for insignificant consideration |
3 | The entity was sold in 2023 for
insignificant consideration |
QIWI
plc
Notes to interim
condensed consolidated financial statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
4. | Acquisitions, disposals and
discontinued operations |
2022
Taxiaggregator
During December 2021 - January 2022,
the Group completed a series of transactions related to the acquisition of assets of the Taxiaggregator business combined with the hiring
of its employees into an existing Group subsidiary QIWI Technologies LLC. In January 2022, the Group obtained control over the Taxiaggregator
business. As a result, the Group came to own 80% of the business with the remaining 20% owned by the founder of Taxiaggregator. The acquisition
has been accounted for using the acquisition method.
Taxiaggregator is a SaaS platform
that provides payment solutions and data analytics tool for taxi companies and taxi drivers. The platform allows drivers to see
balances and order history from all aggregators consolidated in real time at a convenient interface and get instant payouts after
each trip. The transaction falls within the Group’s strategy to further develop its value proposition in payment segment for
self-employed. QIWI had been an exclusive payment partner of Taxiaggregator form its inception. The Group’s expenses for
information services from the business for the year ended December 31, 2021, amounted to 139.
The consideration measured at fair values
comprised the following:
The acquisition date fair value of the Group’s previously held interest | |
| 116 | |
Cash consideration | |
| 706 | |
Total consideration transferred | |
| 822 | |
Cash consideration has been paid in
full as of March 31, 2022 (215 during the first quarter 2022 and 491 during the year 2021).
The fair value of the identifiable assets
and liabilities as of the date of acquisition was:
| |
Fair value | |
Net assets acquired: | |
| | |
Intangible assets | |
| 233 | |
Software | |
| 64 | |
Client base | |
| 169 | |
Deferred tax liabilities | |
| (39 | ) |
Total identifiable net assets at fair value | |
| 194 | |
Group’s share of net assets acquired (80%) | |
| 155 | |
Goodwill arising on acquisition | |
| 667 | |
The Goodwill resulted as the difference
between group’s share of fair value of net assets acquired in the business combination and the consideration paid amounted to 667
and related to potential synergy with the Payment services segment of the Group. Goodwill was allocated to CGU Payment services. None
of the goodwill recognized is expected to be deductible for income tax purposes.
Revenue and net profit of Taxiaggregator
business from the acquisition date to December 31, 2022 was insignificant.
During the second quarter of 2023, the
Group acquired remaining 20% for the amount of 304.
QIWI
plc
Notes to interim
condensed consolidated financial statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
4. | Acquisitions, disposals and
discontinued operations (continued) |
RealWeb
During December 2022,
the Group completed a series of transactions related to the acquisition of subsidiaries of RealWeb
group. In the middle of December 2022, the Group obtained control over the RealWeb
business. As a result, the Group owns 79% of the business and has the intention to increase
its share to 100% during the year 2023. The acquisition has been accounted for using the acquisition method. Pre-existing relationships
between the Group and RealWeb were not significant.
RealWeb is
a leading full-cycle digital marketing service provider in Russia, which provides context and media advertising management services,
social network presence, programmatic, CPA and mobile marketing type of services. The transaction allows the Group to attain leading
positions in the growing advertising and digital marketing business segments based on RealWeb’s expertise, and to further diversify
the Group’s product portfolio.
The consideration transferred to the
seller comprised cash only and amounted to 1,773.
The provisional fair value of the identifiable
assets and liabilities as of the date of the acquisition was:
Net assets acquired: | |
Fair value | |
Intangible assets | |
| 1,163 | |
Software | |
| 792 | |
Trademarks | |
| 371 | |
Trade and other receivables | |
| 3,248 | |
Cash and cash equivalents | |
| 3,089 | |
Other assets | |
| 116 | |
Deferred tax | |
| (123 | ) |
Trade and other payables | |
| (6,140 | ) |
Other liabilities | |
| (273 | ) |
Total identifiable net assets at fair value | |
| 1,080 | |
Group’s share of net assets acquired (79%) | |
| 849 | |
Goodwill arising on acquisition | |
| 924 | |
The Group applied the relief-from-royalty
method to determine the fair value of the trademarks and replacement cost approach to determine the fair value of the software. The significant
assumptions used to estimate the fair value of the trademarks are the forecasted revenue growth rates, royalty rate and discount rate.
The significant assumptions used to estimate the fair value of the software are the number of staff hours required to develop the software
and the related personnel cost.
The provisional Goodwill calculated
as the difference between the Group’s share of the fair value of the identifiable net assets acquired in the business combination
and the consideration paid amounted to 924 and related to the expected synergy with the Group’s existing business.
Goodwill was allocated to the new CGU RealWeb. None of the goodwill recognised is expected to be deductible for the income tax
purposes.
Revenue of
RealWeb business from the acquisition date to December 31, 2022, amounted to 981 and the net profit was insignificant.
The management of the Group does not provide the information regarding revenue and profit or loss of the combined entity for the
year 2022 as though the acquisition happened on January 1, 2022, due to the fact that RealWeb had no financial statements prepared
in accordance with IFRS and therefore preparation of such disclosure would have been impracticable.
QIWI
plc
Notes to interim
condensed consolidated financial statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
4.
Acquisitions, disposals and discontinued operations (continued)
RealWeb (continued)
Analysis of cash flows on acquisition: | |
Amount | |
Cash paid | |
| (1,773 | ) |
Net cash acquired with the subsidiaries | |
| 3,089 | |
Total cash acquired in business combination | |
| 1,316 | |
Investment in associate
At the end of September, 2022, the Group acquired a minority stake
in fintech company that provides financial services for underbanked customers in Middle East and North Africa region. The transaction
is in line with the management plans for an expansion to the international fintech markets. Also, as part of the deal, the Group obtained
for free the option to increase its stake in the future, valid until the end of August 2024. The Group recognizes this investment as an
associate and accounts for it under the equity method, given the Group has call option and representation on the board of directors of
the associate
The consideration measured at fair values
was made by the following:
Cash consideration transferred ($11 million) | |
| 660 | |
Fair value of option received from associate | |
| (333 | ) |
Total consideration | |
| 327 | |
Cash consideration has been paid in
full as of the reporting date.
The fair value of the identifiable assets
and liabilities as of the date of acquisition was:
Net assets acquired: | |
Fair value | |
Intangible assets | |
| 408 | |
Accounts receivable | |
| 610 | |
Cash and cash equivalents | |
| 603 | |
Other assets | |
| 25 | |
Debt | |
| (512 | ) |
Trade and other payables | |
| (204 | ) |
Other liabilities | |
| (57 | ) |
Total identifiable net assets at fair value | |
| 873 | |
Group’s share of net assets acquired | |
| 86 | |
Goodwill arising on acquisition | |
| 241 | |
Goodwill related to the associate amounted
to 241 and is included in the carrying amount of the investment in associate.
At the end of June 2023, the Group invested another tranche of cash
in the amount of 315 and recognized additional goodwill of 308.
QIWI plc
Notes to interim
condensed consolidated financial statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
The Chief executive officer (CEO) of
the Group is considered as the chief operating decision maker of the Group (CODM). In reviewing the operational performance of the Group
and allocating resources, the CODM reviews selected items of each segment’s interim condensed consolidated statement of comprehensive
income.
In determining that the CODM was the
CEO, the Group considered his responsibilities as well as the following factors:
- | The
CEO determines compensation of other executive officers while the Group’s board of
directors approves corporate key performance indicators (KPIs) and total bonus pool for those
executive officers. In case of underperformance of corporate KPIs a right to make a final
decision on bonus pool distribution is left with the Board of directors (BOD); |
- | The
CEO is actively involved in the operations of the Group and regularly chairs meetings on
key projects of the Group; and |
- | The
CEO regularly reviews the financial and operational reports of the Group. These reports primarily
include segment net revenue, segment profit before tax and segment net profit for the Group
as well as certain operational data. |
The financial data is presented on a
combined basis for all key subsidiaries and associates representing the segment net revenue, segment profit before tax and segment net
profit, which are the metrics the Group uses to measure the performance of its operating segments. Segment net revenue is a measure
of profitability defined as the segment revenues less segment direct revenue-related costs. The Group does not monitor balances of assets
and liabilities by segment as the CODM considers they have no impact on decision-making.
The Group has identified its operating
segments based on the types of products and services the Group offers. The CODM reviews segment net revenue, segment profit before tax
and segment net profit separately for each reportable segment.
- | Payment
Services (PS) is the operating segment that generates revenue through operations of the payment
processing system offered to the Group’s customers through a diverse range of channels
and interfaces. |
- | Digital
Marketing (DM) is the operating segment that generates revenue through providing
context and media advertising management services, including platform services under subscription,
social network presence, programmatic, CPA and mobile marketing type of services. After RealWeb acquisition in December 2022 (note 4), DM segment exceeds
the quantitative thresholds, thus became reportable. Results of DM segment were previously presented in Corporate and Other category. |
For the purpose of management reporting,
expenses related to corporate back-office operations were not allocated to any operating segment and are presented separately to the
CODM. Results of other operating segments and corporate expenses are included in Corporate and Other (CO) category for the purpose of
segment reporting.
Management reporting is different from
IFRS, because it does not include certain IFRS adjustments, which are not analyzed by the CODM in assessing the operating performance
of the business. The adjustments affect such major areas as share-based payments, the effect of disposal of subsidiaries and fair value
adjustments, such as amortization and impairment, as well as non-recurring items that occur from time to time and are evaluated for adjustment
as and when they occur. The tax effect of these adjustments is also excluded from management reporting.
QIWI
plc
Notes to interim
condensed consolidated financial statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
5. | Operating segments (continued) |
The segments’ interim condensed
consolidated statements of income for the six months ended June 30, 2023, as presented to the CODM are presented below:
| |
Six months ended June 30, 2023 | |
| |
PS | | |
DM | | |
CO | | |
Total | |
Segment net revenue | |
| 14,159 | | |
| 1,671 | | |
| 1,916 | | |
| 17,746 | |
Segment profit before tax | |
| 8,112 | | |
| 375 | | |
| 2,813 | | |
| 11,300 | |
Segment net profit/(loss) | |
| 6,462 | | |
| 329 | | |
| 2,623 | | |
| 9,414 | |
The segments’ interim condensed
consolidated statements of income for the three months ended June 30, 2023, as presented to the CODM are presented below:
| |
Three months ended June 30, 2023 | |
| |
PS | | |
DM | | |
CO | | |
Total | |
Segment net revenue | |
| 7,215 | | |
| 930 | | |
| 1,049 | | |
| 9,194 | |
Segment profit before tax | |
| 3,733 | | |
| 250 | | |
| 2,226 | | |
| 6,209 | |
Segment net profit/(loss) | |
| 2,926 | | |
| 213 | | |
| 2,095 | | |
| 5,234 | |
The segments’ interim condensed
consolidated statements of income for the six months ended June 30, 2022, as presented to the CODM are presented below:
| |
Six months ended June 30, 2022 | |
| |
PS | | |
DM | | |
CO | | |
Total | |
Segment net revenue | |
| 14,967 | | |
| 285 | | |
| 1,261 | | |
| 16,513 | |
Segment profit/(loss) before tax | |
| 10,735 | | |
| (37 | ) | |
| (3,121 | ) | |
| 7,577 | |
Segment net profit/(loss) | |
| 8,601 | | |
| (26 | ) | |
| (3,285 | ) | |
| 5,290 | |
The segments’ interim condensed
consolidated statements of income for the three months ended June 30, 2022, as presented to the CODM are presented below:
| |
Three months ended June 30, 2022 | |
| |
PS | | |
DM | | |
CO | | |
Total | |
Segment net revenue | |
| 9,318 | | |
| 128 | | |
| 762 | | |
| 10,208 | |
Segment profit/(loss) before tax | |
| 6,979 | | |
| (67 | ) | |
| (2,476 | ) | |
| 4,436 | |
Segment net profit/(loss) | |
| 5,572 | | |
| (56 | ) | |
| (2,552 | ) | |
| 2,964 | |
QIWI plc
Notes to interim
condensed consolidated financial statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
5. | Operating segments (continued) |
Segment net revenue, as presented to
the CODM, for the three and six months ended June 30, 2023 and 2022 is calculated by subtracting cost of revenue from revenue as
presented in the table below:
| |
Three months
ended June 30,
2022 | | |
Six months
ended June 30,
2022 | | |
Three months
ended June 30,
2023 | | |
Six months
ended June 30,
2023 | |
Revenue under IFRS | |
| 14,015 | | |
| 23,732 | | |
| 18,037 | | |
| 35,909 | |
Cost of revenue | |
| (3,807 | ) | |
| (7,219 | ) | |
| (8,843 | ) | |
| (18,163 | ) |
Total segments net revenue, as presented to CODM | |
| 10,208 | | |
| 16,513 | | |
| 9,194 | | |
| 17,746 | |
A reconciliation of segment profit before
tax as presented to the CODM to IFRS interim condensed consolidated profit before tax of the Group, for the three and six months ended
June 30, 2023 and 2022, is presented below:
| |
Three months ended June 30, 2022 | | |
Six months ended June 30, 2022 | | |
Three months ended June 30, 2023 | | |
Six months ended June 30, 2023 | |
Interim condensed consolidated profit before tax under IFRS | |
| 4,243 | | |
| 7,301 | | |
| 5,771 | | |
| 11,161 | |
Fair value adjustments recorded on business combinations, and their amortization | |
| 98 | | |
| 181 | | |
| 438 | | |
| 563 | |
Gain on disposal of subsidiary | |
| – | | |
| – | | |
| – | | |
| (424 | ) |
Impairment of non-current assets | |
| 36 | | |
| 36 | | |
| – | | |
| – | |
Share-based payments | |
| 59 | | |
| 59 | | |
| – | | |
| – | |
Total segments profit before tax, as presented to CODM | |
| 4,436 | | |
| 7,577 | | |
| 6,209 | | |
| 11,300 | |
A reconciliation of segment net profit
as presented to the CODM to IFRS interim condensed consolidated net profit of the Group, for the three and six months ended June 30,
2023 and 2022, is presented below:
| |
Three months
ended June 30,
2022 | | |
Six months
ended June 30,
2022 | | |
Three months
ended June 30,
2023 | | |
Six months
ended June 30,
2023 | |
Interim condensed consolidated net profit under IFRS | |
| 2,810 | | |
| 5,067 | | |
| 4,817 | | |
| 9,316 | |
Fair value adjustments recorded on business combinations, and their amortization | |
| 98 | | |
| 181 | | |
| 438 | | |
| 563 | |
Gain on disposal of subsidiary | |
| – | | |
| – | | |
| – | | |
| (424 | ) |
Impairment of non-current assets | |
| 36 | | |
| 36 | | |
| – | | |
| – | |
Share-based payments | |
| 59 | | |
| 59 | | |
| – | | |
| – | |
Effect from taxation of the above items | |
| (39 | ) | |
| (53 | ) | |
| (21 | ) | |
| (41 | ) |
Total segments net profit, as presented to CODM | |
| 2,964 | | |
| 5,290 | | |
| 5,234 | | |
| 9,414 | |
QIWI
plc
Notes to interim
condensed consolidated financial statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
5. | Operating segments (continued) |
Geographic information
Revenues from external customers are
presented below:
| |
Three months
ended June 30,
2022 | | |
Six months
ended June 30,
2022 | | |
Three months
ended June 30,
2023 | | |
Six months
ended June 30,
2023 | |
Russia | |
| 12,681 | | |
| 21,085 | | |
| 14,767 | | |
| 28,757 | |
Other CIS | |
| 727 | | |
| 1,409 | | |
| 844 | | |
| 1,738 | |
EU | |
| 172 | | |
| 340 | | |
| 1,740 | | |
| 4,186 | |
Other | |
| 435 | | |
| 898 | | |
| 686 | | |
| 1,228 | |
Total revenue | |
| 14,015 | | |
| 23,732 | | |
| 18,037 | | |
| 35,909 | |
Revenue is recognized according to merchants’
or consumers’ geographic place. The majority of the Group’s non-current assets are located in Russia.
The Group does
not have any single external customer amounting to 10% or greater of the Group’s revenue for the six months and the three months
ended June 30, 2023 and for the six months ended June 30, 2022. There was one third party customer, which generated revenues in excess
of 10% (13.7%) of the Group’s revenue for the three months ended June 30, 2022. This revenue was generated within the PS segment.
Disaggregated revenue information
Disaggregation of revenues from contracts
with customers for the six months ended June 30, 2023 are presented below:
| |
PS | | |
DM | | |
CO | | |
Total | |
Payment processing fees | |
| 17,435 | | |
| – | | |
| – | | |
| 17,435 | |
Cash and settlement service fees | |
| 1,233 | | |
| – | | |
| 5 | | |
| 1,238 | |
Platform and marketing services related fees | |
| 81 | | |
| 11,377 | | |
| – | | |
| 11,458 | |
Fees for guarantees issued | |
| 9 | | |
| – | | |
| 886 | | |
| 895 | |
Other revenue | |
| 237 | | |
| 75 | | |
| 35 | | |
| 347 | |
Total revenue from contracts with customers | |
| 18,995 | | |
| 11,452 | | |
| 926 | | |
| 31,373 | |
Disaggregation of revenues from contracts
with customers for the three months ended June 30, 2023 are presented below:
| |
PS | | |
DM | | |
CO | | |
Total | |
Payment processing fees | |
| 8,687 | | |
| – | | |
| – | | |
| 8,687 | |
Cash and settlement service fees | |
| 719 | | |
| – | | |
| 3 | | |
| 722 | |
Platform and marketing services related fees | |
| 36 | | |
| 5,517 | | |
| – | | |
| 5,553 | |
Fees for guarantees issued | |
| 4 | | |
| – | | |
| 474 | | |
| 478 | |
Other revenue | |
| 137 | | |
| 49 | | |
| 19 | | |
| 205 | |
Total revenue from contracts with customers | |
| 9,583 | | |
| 5,566 | | |
| 496 | | |
| 15,645 | |
QIWI
plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
5. | Operating segments (continued) |
Disaggregation of revenues from contracts
with customers for the six months ended June 30, 2022 are presented below:
| |
PS | | |
DM | | |
CO | | |
Total | |
Payment processing fees | |
| 17,787 | | |
| – | | |
| – | | |
| 17,787 | |
Cash and settlement service fees | |
| 383 | | |
| – | | |
| 77 | | |
| 460 | |
Platform and marketing services related fees | |
| 57 | | |
| 379 | | |
| – | | |
| 436 | |
Fees for guarantees issued | |
| 10 | | |
| – | | |
| 590 | | |
| 600 | |
Other revenue | |
| 167 | | |
| – | | |
| 10 | | |
| 177 | |
Total revenue from contracts with customers | |
| 18,404 | | |
| 379 | | |
| 677 | | |
| 19,460 | |
Disaggregation of revenues from contracts
with customers for the three months ended June 30, 2022 are presented below:
| |
PS | | |
DM | | |
CO | | |
Total | |
Payment processing fees | |
| 10,839 | | |
| – | | |
| – | | |
| 10,839 | |
Cash and settlement service fees | |
| 185 | | |
| – | | |
| – | | |
| 185 | |
Platform and marketing services related fees | |
| 23 | | |
| 178 | | |
| – | | |
| 201 | |
Fees for guarantees issued | |
| 5 | | |
| – | | |
| 329 | | |
| 334 | |
Other revenue | |
| 86 | | |
| – | | |
| 5 | | |
| 91 | |
Total revenue from contracts with customers | |
| 11,138 | | |
| 178 | | |
| 334 | | |
| 11,650 | |
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions
of rubles, except when otherwise indicated)
6.
Long-term and short-term loans issued
As of June 30, 2023, long-term
and short-term loans issued consisted of the following:
| |
Total as of June 30, 2023 | | |
Expected credit loss allowance | | |
Net as of June 30, 2023 | |
Long-term loans | |
| | | |
| | | |
| | |
Loans to legal entities, including SME | |
| 636 | | |
| (16 | ) | |
| 620 | |
Loans to individuals | |
| 3 | | |
| – | | |
| 3 | |
Total long-term loans | |
| 639 | | |
| (16 | ) | |
| 623 | |
Short-term loans | |
| | | |
| | | |
| | |
Factoring loans | |
| 12,245 | | |
| (155 | ) | |
| 12,090 | |
Loans to legal entities, including SME | |
| 4,881 | | |
| (327 | ) | |
| 4,554 | |
Loans to individuals | |
| 193 | | |
| (109 | ) | |
| 84 | |
Total short-term loans | |
| 17,319 | | |
| (591 | ) | |
| 16,728 | |
As of December 31, 2022, long-term
and short-term loans consisted of the following:
| |
Total as of December 31, 2022 | | |
Expected credit loss allowance | | |
Net as of December 31, 2022 | |
Long-term loans | |
| | | |
| | | |
| | |
Loans to legal entities, including SME | |
| 871 | | |
| (28 | ) | |
| 843 | |
Total long-term loans | |
| 871 | | |
| (28 | ) | |
| 843 | |
Short-term loans | |
| | | |
| | | |
| | |
Factoring loans | |
| 12,668 | | |
| (100 | ) | |
| 12,568 | |
Loans to legal entities, including SME | |
| 1,840 | | |
| (254 | ) | |
| 1,586 | |
Loans to individuals | |
| 85 | | |
| (39 | ) | |
| 46 | |
Total short-term loans | |
| 14,593 | | |
| (393 | ) | |
| 14,200 | |
The amounts in the tables show the maximum
exposure to credit risk regarding loans issued. Loans issued within the factoring scheme are collateralized with the accounts receivable
of the debtor. The other part of loans issued are not collateralized.
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
6. Long-term and short-term loans
issued (continued)
An analysis of the changes in the ECL allowances
due to changes in corresponding gross carrying amounts for the six months ended June 30, 2023, was the following:
| |
Stage 1 Collective | | |
Stage 2 Collective | | |
Stage 3 | | |
Total | |
ECL allowance as of January 1, 2023 | |
| (24 | ) | |
| (120 | ) | |
| (277 | ) | |
| (421 | ) |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | |
| (162 | ) | |
| 40 | | |
| (68 | ) | |
| (190 | ) |
Transfers between stages | |
| 121 | | |
| (2 | ) | |
| (119 | ) | |
| – | |
Amounts sold and written off | |
| – | | |
| – | | |
| 4 | | |
| 4 | |
ECL allowance as of June 30, 2023 | |
| (65 | ) | |
| (82 | ) | |
| (460 | ) | |
| (607 | ) |
An analysis of the changes in the ECL allowances
due to changes in corresponding gross carrying amounts for the three months ended June 30, 2023, was the following:
| |
Stage 1 Collective | | |
Stage 2 Collective | | |
Stage 3 | | |
Total | |
ECL allowance as of April 1, 2023 | |
| (90 | ) | |
| (76 | ) | |
| (363 | ) | |
| (529 | ) |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | |
| 24 | | |
| (5 | ) | |
| (97 | ) | |
| (78 | ) |
Transfers between stages | |
| 1 | | |
| (1 | ) | |
| – | | |
| – | |
Amounts sold and written off | |
| – | | |
| – | | |
| – | | |
| – | |
ECL allowance as of June 30, 2023 | |
| (65 | ) | |
| (82 | ) | |
| (460 | ) | |
| (607 | ) |
An analysis of the changes in the ECL allowances due to changes in
corresponding gross carrying amounts for the six months ended June 30, 2022, was the following:
| |
Stage 1 Collective | | |
Stage 2 Collective | | |
Stage 3 | | |
Total | |
ECL allowance as of January 1, 2022 | |
| (34 | ) | |
| (5 | ) | |
| (53 | ) | |
| (92 | ) |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | |
| – | | |
| (120 | ) | |
| (77 | ) | |
| (197 | ) |
Transfers between stages | |
| 9 | | |
| (3 | ) | |
| (6 | ) | |
| – | |
Amounts sold and written off | |
| – | | |
| – | | |
| 7 | | |
| 7 | |
ECL allowance as of June 30, 2022 | |
| (25 | ) | |
| (128 | ) | |
| (129 | ) | |
| (282 | ) |
An analysis of the changes in the ECL allowances due to changes in
corresponding gross carrying amounts for the three months ended June 30, 2022, was the following:
| |
Stage 1 Collective | | |
Stage 2 Collective | | |
Stage 3 | | |
Total | |
ECL allowance as of April 1, 2022 | |
| (21 | ) | |
| (65 | ) | |
| (80 | ) | |
| (166 | ) |
Changes because of financial instruments (originated or acquired)/derecognized during the reporting period | |
| (7 | ) | |
| (61 | ) | |
| (55 | ) | |
| (123 | ) |
Transfers between stages | |
| 3 | | |
| (2 | ) | |
| (1 | ) | |
| – | |
Amounts sold and written off | |
| – | | |
| – | | |
| 7 | | |
| 7 | |
ECL allowance as of June 30, 2022 | |
| (25 | ) | |
| (128 | ) | |
| (129 | ) | |
| (282 | ) |
As of June 30, 2023, and December 31, 2022, the Group had
no overdue but not impaired loans.
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
7. | Trade and other receivables |
As of June 30, 2023, trade and other receivables consisted of
the following:
| |
Total as of June 30, 2023 | | |
Expected credit
loss allowance | | |
Net as of June 30, 2023 | |
Cash receivable from agents | |
| 1,623 | | |
| (178 | ) | |
| 1,445 | |
Deposits issued to merchants | |
| 5,685 | | |
| (15 | ) | |
| 5,670 | |
Receivables related to marketing activity | |
| 3,539 | | |
| (59 | ) | |
| 3,480 | |
Receivables related to guarantees issued and exercised | |
| 1,000 | | |
| (933 | ) | |
| 67 | |
Commissions receivable | |
| 276 | | |
| (15 | ) | |
| 261 | |
Other receivables | |
| 869 | | |
| (111 | ) | |
| 758 | |
Total financial assets | |
| 12,992 | | |
| (1,311 | ) | |
| 11,681 | |
Advances issued | |
| 488 | | |
| – | | |
| 488 | |
Total trade and other receivables | |
| 13,480 | | |
| (1,311 | ) | |
| 12,169 | |
As of December 31, 2022, trade and other receivables consisted
of the following:
| |
Total as of December 31, 2022 | | |
Expected
credit loss
allowance | | |
Net as of December 31, 2022 | |
Cash receivable from agents | |
| 4,385 | | |
| (325 | ) | |
| 4,060 | |
Deposits issued to merchants | |
| 6,771 | | |
| (15 | ) | |
| 6,756 | |
Receivables related to marketing activity | |
| 3,422 | | |
| (20 | ) | |
| 3,402 | |
Receivables related to guarantees issued and exercised | |
| 686 | | |
| (589 | ) | |
| 97 | |
Commissions receivable | |
| 394 | | |
| (30 | ) | |
| 364 | |
Other receivables | |
| 226 | | |
| (37 | ) | |
| 189 | |
Total financial assets | |
| 15,884 | | |
| (1,016 | ) | |
| 14,868 | |
Advances issued | |
| 326 | | |
| – | | |
| 326 | |
Total trade and other receivables | |
| 16,210 | | |
| (1,016 | ) | |
| 15,194 | |
The amounts in the tables show the maximum exposure to credit risk
regarding Trade and other receivables. Receivables are non-interest bearing, except for agent receivables bearing, generally, interest
rate of 20%-36% per annum and credit terms generally do not exceed 30 days. There is no requirement for collateral for customer to receive
an overdraft.
An analysis of changes in the ECL allowances
due to changes in the corresponding gross carrying amounts for the six months ended June 30, 2023 and June 30, 2022, was the
following:
| |
2022 | | |
2023 | |
ECL allowance as of January 1, | |
| (509 | ) | |
| (1,016 | ) |
Changes because of financial instruments (originated or acquired)/ derecognized during the reporting period | |
| (106 | ) | |
| (432 | ) |
Amounts written off | |
| 31 | | |
| 137 | |
ECL allowance as of June 30, | |
| (584 | ) | |
| (1,311 | ) |
An analysis of changes in the ECL allowances
due to changes in the corresponding gross carrying amounts for the three months ended June 30, 2023 and June 30, 2022, was
the following:
| |
2022 | | |
2023 | |
ECL allowance as of April 1, | |
| (553 | ) | |
| (966 | ) |
Changes because of financial instruments (originated or
acquired)/ derecognized during the reporting period | |
| (41 | ) | |
| (359 | ) |
Amounts written off | |
| 10 | | |
| 14 | |
ECL allowance as of June 30, | |
| (584 | ) | |
| (1,311 | ) |
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
8. | Cash and cash equivalents |
As of June 30, 2023, and December 31, 2022, cash and cash
equivalents consisted of the following:
|
|
As of
December 31, 2022 |
|
|
As of
June 30, 2023 |
|
Correspondent accounts with Central Bank of Russia (CBR) |
|
|
3,025 |
|
|
|
1,870 |
|
Сash with banks and on hand |
|
|
9,833 |
|
|
|
12,295 |
|
Short-term CBR deposits |
|
|
27,100 |
|
|
|
17,300 |
|
Other short-term bank deposits |
|
|
7,507 |
|
|
|
8,108 |
|
Less: Allowance for ECL |
|
|
(3 |
) |
|
|
(3 |
) |
Total cash and cash equivalents |
|
|
47,462 |
|
|
|
39,570 |
|
The amounts in the table show the maximum exposure to credit risk
regarding cash and cash equivalents. The banks the Group holds its cash have low credit risk and are approved by the Board of Directors
of the Group on a regular basis.
The Group holds cash and cash equivalents in different currencies
and therefore is exposed to foreign currency risk.
|
|
As of
December 31, 2022 |
|
|
As of
June 30, 2023 |
|
Russian ruble |
|
|
39,980 |
|
|
|
28,820 |
|
Euro |
|
|
735 |
|
|
|
969 |
|
US Dollar |
|
|
2,230 |
|
|
|
2,346 |
|
Chinese Yuan |
|
|
2,160 |
|
|
|
2,599 |
|
Others |
|
|
2,357 |
|
|
|
4,836 |
|
Total |
|
|
47,462 |
|
|
|
39,570 |
|
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
9. | Other current assets and other current liabilities |
9.1 Other current assets
As of June 30, 2023, and December 31, 2022, other current
assets consisted of the following:
|
|
As of
December 31, 2022 |
|
|
As of
June 30, 2023 |
|
Other financial assets |
|
|
|
|
|
|
|
|
Reserves at CBR* |
|
|
63 |
|
|
|
129 |
|
Option received from ADAH |
|
|
470 |
|
|
|
158 |
|
Restricted cash accounts and payments |
|
|
2,015 |
|
|
|
1,035 |
|
Less: Allowance for ECL |
|
|
(1,404 |
) |
|
|
(1,035 |
) |
Total other financial assets |
|
|
1,144 |
|
|
|
287 |
|
Other non-financial assets |
|
|
|
|
|
|
|
|
Prepaid expenses |
|
|
191 |
|
|
|
178 |
|
Tax receivables |
|
|
288 |
|
|
|
860 |
|
Costs of obtaining a contract |
|
|
455 |
|
|
|
495 |
|
Other |
|
|
117 |
|
|
|
26 |
|
Total other current assets |
|
|
2,195 |
|
|
|
1,846 |
|
* | Banks are currently required to post mandatory
reserves with the CBR to be held in non-interest-bearing accounts. Such mandatory reserves
are established by the CBR for liabilities in RUB and in foreign currency according to its
monetary policy. The amount is excluded from cash and cash equivalents for the purposes of
interim condensed consolidated statement of cash flows and does not have a repayment date. |
As of June 30, 2023, cash with banks in the amount of 574 and
payments to partners in the amount of 461 were restricted due to the sanctions imposed on certain Russian banks and other restrictions
(December 31, 2022 – 2,015). Restricted cash accounts and the related ECL allowance in the amount of 1,035 fall under stage
3 of impairment (December 31, 2022 – 1,404).
9.2 Other current liabilities
As of June 30, 2023, and December 31, 2022, other current
liabilities consisted of the following:
| |
As of
December 31, 2022 | | |
As of
June 30, 2023 | |
Contract liability related to guarantees issued | |
| 1,157 | | |
| 1,243 | |
Deferred income | |
| 131 | | |
| 137 | |
Tax payable | |
| 913 | | |
| 526 | |
Other | |
| 67 | | |
| 88 | |
Total other current liabilities | |
| 2,268 | | |
| 1,994 | |
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
10. | Trade and other payables |
As of June 30, 2023, and December 31, 2022, the Group's
trade and other payables consisted of the following:
| |
As of December 31, 2022 | | |
As of June 30, 2023 | |
Payables to merchants | |
| 11,431 | | |
| 8,581 | |
Money remittances and e-wallets accounts payable | |
| 8,807 | | |
| 9,282 | |
Deposits received from agents | |
| 3,415 | | |
| 2,407 | |
Payables related to marketing activity | |
| 5,751 | | |
| 5,720 | |
Commissions payable | |
| 485 | | |
| 375 | |
Accrued personnel expenses and related taxes | |
| 2,073 | | |
| 1,865 | |
Other payables | |
| 1,086 | | |
| 1,510 | |
Total trade and other payables | |
| 33,048 | | |
| 29,740 | |
11. | Customer accounts and amounts due to banks |
As of June 30, 2023, and December 31, 2022, customer accounts
and amounts due to banks consisted of the following:
| |
As of December 31, 2022 | | |
As of June 30, 2023 | |
Legal entities’ current/demand accounts | |
| 8,829 | | |
| 11,257 | |
Correspondent accounts of other banks | |
| 2,335 | | |
| 3,695 | |
Individuals’ current/demand accounts | |
| 39 | | |
| 59 | |
Total customer accounts and amounts due to banks | |
| 11,203 | | |
| 15,011 | |
Customer accounts and correspondent accounts of other banks bear interest
of up to 7% (2022 – 7%).
As of June 30, 2023, and December 31, 2022, Group’s
debt consisted of the following:
| |
Credit limit | | |
Effective
interest
rate | |
Maturity | | |
As of December 31, 2022 | | |
As of June 30, 2023
| |
Non-current interest-bearing debt | |
| | | |
| |
| | | |
| | | |
| | |
Bonds issued | |
| 5,000 | | |
9.3% | |
| October 10, 2023 | | |
| 3,922 | | |
| 3,745 | |
Total debt | |
| | | |
| |
| | | |
| 3,922 | | |
| 3,745 | |
Including short-term portion | |
| | | |
| |
| | | |
| 3,922 | | |
| 3,745 | |
The Group is subject to various covenants regarding its bonds issued.
As of June 30, 2023, and December 31, 2022, the Group was in compliance with all covenants stipulated by the public irrevocable
offers.
Interest expense regarding Group’s debt for the six months ended
June 30, 2023 amounted to 141 (for the six months ended June 30, 2022 – 184).
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
13. | Investments in associates |
The following table illustrates the summarized financial information
of the Group’s investment in the associate (see Note 4):
| |
As of December 31, 2022 | | |
As of June 30, 2023 | |
Current assets, including cash and cash equivalents of 124 (2022-82) | |
| 750 | | |
| 1,366 | |
Non-current assets | |
| 497 | | |
| 571 | |
Current liabilities | |
| (342 | ) | |
| (1,359 | ) |
Non-current debt | |
| (281 | ) | |
| (348 | ) |
Equity | |
| 624 | | |
| 230 | |
Group’s share in equity 12.6% (2022 - 9.9%) | |
| 62 | | |
| 30 | |
Goodwill | |
| 241 | | |
| 549 | |
Group’s carrying amount of the investment | |
| 303 | | |
| 579 | |
| |
Six months
ended June 30,
2022 | | |
Six months
ended June
30, 2023 | |
Revenue | |
| – | | |
| 572 | |
Cost of revenue | |
| – | | |
| (440 | ) |
Other income and expenses, net | |
| – | | |
| (1,067 | ) |
including personnel expenses | |
| – | | |
| (458 | ) |
including depreciation and amortization | |
| – | | |
| (44 | ) |
Total net loss | |
| – | | |
| (935 | ) |
Group’s share of total net loss | |
| – | | |
| (93 | ) |
Gain from contribution to equity by other investors | |
| – | | |
| 49 | |
Total share of loss of an associate | |
| – | | |
| (44 | ) |
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
The Group has commercial lease agreements of office buildings. The
leases have an average life up to four years. The contracts for a term of less than a year fall under the recognition exemption for being
short-term leases. Total lease expense for the six months ended June 30, 2023 recognized under such contracts is 28 (six months
ended June 30, 2022 – 14). Future minimum lease rentals under non-cancellable lease commitments for office premises
for a term less than one year as of June 30, 2023 are 15 (December 31, 2022 – 25).
For long-term contracts, right-of-use assets and lease liabilities
were recognized. Right-of-use assets are included into property and equipment. The change in the balances of Right-of-use assets and
Lease liabilities for the six months ended June 30, 2023 was as follows:
| |
Right-of-use assets Office buildings | | |
Lease
liabilities | |
As of January 1, 2023 | |
| 455 | | |
| 433 | |
Additions | |
| 29 | | |
| 21 | |
Derecognition | |
| (11 | ) | |
| (11 | ) |
Depreciation | |
| (130 | ) | |
| – | |
Interest expense | |
| – | | |
| 18 | |
Payments | |
| – | | |
| (75 | ) |
As of June 30, 2023 | |
| 343 | | |
| 386 | |
Including short-term portion | |
| | | |
| 302 | |
The change in the balances of Right-of-use assets and Lease liabilities
for the six months ended June 30, 2022 was as follows:
| |
Right-of-use assets Office buildings | | |
Lease
liabilities | |
As of January 1, 2022 | |
| 653 | | |
| 642 | |
Additions | |
| 104 | | |
| 104 | |
Derecognition | |
| (136 | ) | |
| (155 | ) |
Depreciation | |
| (137 | ) | |
| – | |
Interest expense | |
| – | | |
| 30 | |
Payments | |
| – | | |
| (64 | ) |
As of June 30, 2022 | |
| 484 | | |
| 557 | |
Including short-term portion | |
| | | |
| 263 | |
For the amount of rent expense recognized from short-term leases and
variable lease payments for the three and six months ended June 30, 2023 and June 30, 2022 see note 17.
QIWI plc
Notes to interim
condensed consolidated financial statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
15. | Revenue from contracts with customers |
Revenue from contracts with customers for three and six months ended
June 30 was as follows:
| |
Three months
ended June 30,
2022 | | |
Six months
ended June 30,
2022 | | |
Three months
ended June 30,
2023 | | |
Six months
ended June 30,
2023 | |
Payment processing fees | |
| 10,839 | | |
| 17,787 | | |
| 8,687 | | |
| 17,435 | |
Platform and marketing services related fees | |
| 201 | | |
| 436 | | |
| 5,553 | | |
| 11,458 | |
Fees for guarantees issued | |
| 334 | | |
| 600 | | |
| 478 | | |
| 895 | |
Cash and settlement service fees | |
| 185 | | |
| 460 | | |
| 722 | | |
| 1,238 | |
Other revenue | |
| 91 | | |
| 177 | | |
| 205 | | |
| 347 | |
Total revenue from contracts with customers | |
| 11,650 | | |
| 19,460 | | |
| 15,645 | | |
| 31,373 | |
For the purposes of interim condensed consolidated statement of cash
flows, “Interest income, net” consists of the following:
| |
Six months ended | |
| |
June 30, 2022 | | |
June 30, 2023 | |
Interest revenue calculated using the effective interest rate | |
| (3,381 | ) | |
| (3,708 | ) |
Interest expense classified as part of cost of revenue | |
| 241 | | |
| 162 | |
Interest income and expenses from non-operating activities | |
| (72 | ) | |
| 6 | |
Interest income, net, for the purposes of interim condensed consolidated statement of cash flows | |
| (3,212 | ) | |
| (3,540 | ) |
| |
Three months
ended June 30,
2022 | | |
Six months
ended June 30,
2022 | | |
Three months
ended June 30,
2023 | | |
Six months
ended June 30,
2023 | |
Transaction costs | |
| 3,260 | | |
| 6,090 | | |
| 3,645 | | |
| 7,309 | |
Platform and marketing services related expenses | |
| 29 | | |
| 54 | | |
| 4,630 | | |
| 9,765 | |
Guarantees issued related expenses | |
| 141 | | |
| 275 | | |
| 216 | | |
| 400 | |
Interest expense | |
| 121 | | |
| 241 | | |
| 84 | | |
| 162 | |
Other expenses | |
| 256 | | |
| 559 | | |
| 268 | | |
| 527 | |
Total cost of revenue | |
| 3,807 | | |
| 7,219 | | |
| 8,843 | | |
| 18,163 | |
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
17. | Selling, general and administrative expenses |
| |
Three months
ended June
30, 2022 | | |
Six months
ended June
30, 2022 | | |
Three months
ended June
30, 2023 | | |
Six months
ended June
30, 2023 | |
Advertising, client acquisition and related expenses | |
| 80 | | |
| 148 | | |
| 116 | | |
| 193 | |
Tax expenses, except for income and payroll taxes | |
| 69 | | |
| 146 | | |
| 77 | | |
| 166 | |
Advisory and audit services | |
| 190 | | |
| 434 | | |
| 247 | | |
| 490 | |
Rent of premises | |
| 25 | | |
| 51 | | |
| 34 | | |
| 68 | |
Expenses related to Tochka platform services | |
| 178 | | |
| 311 | | |
| 282 | | |
| 415 | |
IT related services | |
| 92 | | |
| 188 | | |
| 138 | | |
| 252 | |
Business travel and representative expenses | |
| 66 | | |
| 95 | | |
| 126 | | |
| 222 | |
Other expenses | |
| 73 | | |
| 171 | | |
| 164 | | |
| 337 | |
Total selling, general and administrative expenses | |
| 773 | | |
| 1,544 | | |
| 1,184 | | |
| 2,143 | |
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
The Company is incorporated in Cyprus under the Cyprus Companies Law,
but the business activity of the Group and joint ventures is subject to taxation in multiple jurisdictions, the most significant of which
include:
Cyprus
The Company is subject to 12.5% corporate income tax applied to its
worldwide income. On December 9, 2021, the Minister of Finance presented to parliament the proposed Cyprus budgetary plan for 2022
and envisaged fiscal policy plan for the next three-year period, including an outline of the government’s vision with respect to
a possible reform of the Cyprus tax system. Specifically, an increase of the corporate income tax rate from 12.5% to 15% is envisaged,
in line with the OECD Inclusive Framework’s Pillar Two agreement. The European Commission’s proposal indicates that the new
rules should be transposed into domestic law by EU Member States by December 31, 2023. Once duly adopted, it is proposed to
take effect from January 1, 2024.
The Company is exempt from the special contribution to the Defense
Fund on dividends received from abroad.
In 2020 the Company obtained a written confirmation from the Cyprus
tax authorities in the form of a tax ruling in which the Cyprus tax authorities accept in writing not to impose any deemed dividend distribution
liability since the Company is a public entity and it is impossible to identify the ultimate minority shareholders.
The Russian Federation
The Company’s subsidiaries incorporated in the Russian Federation
are subject to corporate income tax at the standard rate of 15% applied to income received from Russian government bonds and 20% applied
to their other taxable income.
The Protocol of September 8, 2020 effective from January 1,
2021 established withholding tax rates as 15% in respect of interest and dividend income paid to Cyprus (though it provides for a number
of exceptions where the lower rates of 5% or 0% are envisaged). The Company believes that it fulfills the conditions for application
of the reduced 5% tax rate under the amended Russia-Cyprus Double Tax Treaty in respect of dividend income.
Republic of Kazakhstan
The Company’s subsidiary incorporated in
Kazakhstan is subject to corporate income tax at the standard rate of 20% applied to their taxable income.
The major components of income tax expense in the interim condensed
consolidated statement of comprehensive income are:
| |
Three months
ended June 30,
2022 | | |
Six months
ended June 30,
2022 | | |
Three months
ended June 30,
2023 | | |
Six months
ended June 30,
2023 | |
Current income tax expense | |
| (1,179 | ) | |
| (1,893 | ) | |
| (761 | ) | |
| (1,860 | ) |
Deferred tax (expense)/benefit | |
| (254 | ) | |
| (341 | ) | |
| (193 | ) | |
| 15 | |
Income tax expense for the period | |
| (1,433 | ) | |
| (2,234 | ) | |
| (954 | ) | |
| (1,845 | ) |
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
19. | Commitments, contingencies and operating risks |
Operating environment
The Ukraine crisis, which started in late 2013 and escalated into
a major military conflict between Russia and Ukraine in February 2022, has had a devastating effect on Russian relations with the
West. In response to the Ukraine crisis, Ukraine, the European Union, the United Kingdom and the United States (as well as numerous other
countries such as Switzerland, Japan, Norway, Canada and Australia) have passed a variety of economic sanctions against numerous Russian
banks, other companies, private individuals, and whole sectors of the Russian economy, as well as export restrictions and “sectoral”
sanctions affecting specified types of transactions with named participants in certain industries, including named Russian financial
institutions, and sanctions that prohibit certain significant commercial activities of U.S., UK and EU entities in Russia, as well as
in certain specific territories affected by the conflict. While the scope of sanctions has been expanding since 2014, when they were
first introduced in response to annexation of Crimea, 2022 saw the imposition of extremely severe measures that have hitherto been unprecedented.
Introduction of further economic or trade sanctions remains highly likely as the conflict in Ukraine develops.
Several of Russia’s largest banks, as well as a number of smaller
banks are now on the U.S. Department of the Treasury’s Office of Foreign Assets Control’s List of Specially Designated Nationals
and Blocked Persons (SDNs), such that their property in the U.S. is blocked and U.S. entities are prohibited from transacting with them,
and are also subject to various EU and UK sanctions. Since March 2, 2022, a number of major Russian banks have been banned from
the SWIFT system by the EU.
As of the date of these interim condensed consolidated financial statements,
the Group is not subject to any sanctions from the US, the UK or the EU. However, further expansion of the sanctions list, the shutdown
of the SWIFT system for some Russian banks, the possible introduction of restrictions on the CBR and a number of companies, including
customers and counterparties of the Group, may have a significant impact on the activities and financial position of the Group in the
future.
In addition, in response to the Ukraine conflict, numerous companies
from the U.S., the EU, the UK and other countries have withdrawn from Russia or suspended, wound down or substantially scaled back their
Russian operations, stopped dealings with Russian counterparts, or announced plans to do so, due to what ostensibly is a combination
of compliance, political, reputational, and other reasons, in a manner that goes significantly beyond the mere compliance with applicable
sanctions. It has been observed that businesses from the U.S., the EU, the UK and certain other countries, are exhibiting an overall
trend of avoiding any associations with Russia. Such businesses include, among others, software and hardware providers the use of whose
products and services is material to the Group’s operations. Accordingly, the Group may face the risk of interruptions to its normal
operations due to the need to replace such products and services and integrate alternative solutions on an emergency basis, and its business,
financial condition and results of operations could be materially adversely affected as a result. Further, on March 5, 2022, Visa
and Mastercard suspended membership of all their Russian members, rendering Russian banks, including Qiwi Bank, unable to issue Visa
and Mastercard cards, and Russian consumers unable to execute purchases from most foreign merchants, which has had a limited negative
effect on the Group’s payment volumes in 2022 and 2023.
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
19. | Commitments, contingencies and operating risks (continued) |
Operating environment (continued)
In response to the actions of foreign countries and companies described
above, the Russian Federation has developed and continues to implement a number of legal, financial and economic measures in order to
secure and stabilize the Russian economy, as well as severe retaliatory measures, including significant restrictions on foreign companies
executing transactions, repatriating profits and proceeds from sales of businesses, challenging regulatory compliance, increasing taxes,
implementing new obligatory or voluntary fees and others. Such measures may be applied to the Group, especially given that its parent
company is registered in a country that is considered by the Russian Government to be an “unfriendly jurisdiction”.
On March 15, 2023, QIWI received a notice from the Nasdaq Listing Qualifications
Staff that the Staff had determined to delist the Company’s American Depositary Shares from the Nasdaq Global Select Market. On
June 6, 2023, upon hearing an appeal from the Company, the Panel granted its request to continue its listing on Nasdaq, subject in particular
to the Company timely implementing a restructuring plan to divest its Russian assets. Upon implementation of the restructuring plan, the
Group will focus on further growth of its international business both by developing its existing operations and through M&A activities.
Currently, the Board of Directors and management are considering various
ways to divest the Russian business from QIWI plc in order to maintain the listing on NASDAQ and protect the interests of all groups of
investors. At present, there is still additional work required to carefully and comprehensively evaluate the risks and consequences of
potential solutions. Furthermore, the restructuring may require certain approvals from various regulatory bodies in Russia, including
the CBR, or other countries. As a result, there is no single option for restructuring which could be considered as highly probable. At
the same time, such restructuring may result in substantial losses to be recognized in the consolidated financial statements depending
on the limitations imposed by such regulatory bodies, as has been evidenced in practice in a number of recent cases where other foreign
companies divested Russian assets.
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
19. | Commitments, contingencies and operating risks (continued) |
Regulatory environment
The Group’s business is impacted by laws and regulations that
affect its industry, the number of which has increased significantly in recent years. The Group is subject to a variety of regulations,
including those aimed at preventing money laundering and the financing of criminal activity and terrorism, financial services regulations,
payment services regulations, consumer protection laws, currency control regulations, advertising laws, betting laws and privacy and
data protection laws. As a result, the Group experiences periodic investigations by various regulatory authorities in connection with
such laws and regulations, which may sometimes result in the imposition of monetary or other sanctions. An example of such investigations
was a routine audit by the CBR that resulted in certain restrictions on operations of Qiwi Bank in July 2023 (see Note 22). Further,
these laws and regulations vary significantly from country to country. Many of these laws and regulations are constantly evolving, and
are often unclear and inconsistent with other applicable laws and regulations, including across various jurisdictions, making compliance
challenging and increasing the Group’s related operating costs and legal risks. If local authorities in Russia or other countries
choose to enforce specific interpretations of the applicable legislation that differ from the Group’s, it may be found to be in
violation and subject to penalties or other liabilities. This could also limit the Group’s ability to provide some of its services
going forward and may increase its cost of doing business.
For more detailed disclosure on operating and regulatory environment
and on other key risks please refer to the most recent annual report on Form 20-F and Financial Statements filed with the Securities
and Exchange Commission.
Taxation
Russian and the CIS countries’ tax, currency and customs legislation
is subject to varying interpretations, and changes, which can occur frequently. There can be no assurance that the Russian Tax Code and
CIS countries’ (specifically, Kazakhstan) tax legislation will not be changed in the future in a manner adverse to the stability
and predictability of the Russian and CIS countries’ tax system. These factors, together with the potential for state budget deficits,
raise the risk of the imposition of additional taxes on the Group. The introduction of new taxes or amendments to current taxation rules may
have a substantial impact on the overall amount of the Group’s tax liabilities. An example of such new tax is a new “windfall
tax” introduced in August 2023 (see Note 22). Recent events within the Russian Federation and Kazakhstan suggest that the
tax authorities are taking a more assertive position in their interpretation of the legislation and assessments and as a result, it is
possible that transactions and activities that have not been challenged in the past may be challenged. As such, significant additional
taxes, penalties and interest may be assessed. Fiscal periods remain open to review by the authorities in respect of taxes for three
calendar years preceding the year of review. Under certain circumstances reviews may cover longer periods. There is no assurance that
it would not be required to make substantially larger tax payments in the future, which may adversely affect the Group’s business,
financial condition and results of operations.
For more detailed disclosure on taxation please refer to the
most recent annual report on Form 20-F and Financial Statements filed with the Securities and Exchange Commission.
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
19. | Commitments, contingencies and operating risks (continued) |
Risk assessment
The Group’s management believes that its interpretation of
the relevant legislation is appropriate and is in accordance with the current industry practice and that the Group’s currency,
customs, tax and other regulatory positions will be sustained. However, the interpretations of the relevant authorities could differ
and the maximum effect of additional losses, if the authorities were successful in enforcing their different interpretations, could
be significant, amount up to RUB 1.4 billion as assessed by the Group as of June 30, 2023 (RUB 2.2 billion as of
December 31, 2022).
Legal proceedings
In the ordinary course of business, the Group is subject to legal
actions and complaints. Management does not believe that the ultimate liability, if any, arising from such actions or complaints will
have a material adverse effect on the financial condition or the results of future operations of the Group.
Following the disclosure of the restrictions imposed by the CBR on
the Group in December 2020, QIWI plc and certain of its current and former executive officers have been named as defendants in a putative
class action filed in the United States. These lawsuits allege that the defendants made certain false or misleading statements that were
supposedly revealed after the CBR audit results and restrictions were disclosed in December 2020, which the plaintiffs perceive as a violation
of Sections 10(b) and 20(a) of the 1934 Securities Exchange Act, and seek damages and other relief based upon such allegations. Management
believes that these lawsuits are without merit and intends to defend against them vigorously, and expects to incur certain costs associated
with defending against these actions. As of the date of these interim condensed consolidated financial statements there have been no developments
regarding the lawsuits, the ultimate outcomes are uncertain and management cannot reasonably predict the timing or outcomes, or estimate
the amount of loss, if any, or their effect, if any, on the Group’s financial position. Any negative outcome could result in payments
of substantial monetary damages and accordingly the Group’s business could be seriously harmed.
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
19. | Commitments, contingencies and operating risks (continued) |
Guarantees issued
The Group issues financial and performance guarantees to non-related
parties for the term of up to five years at market rates.
| |
December 31, 2022 | | |
June 30, 2023 | |
| |
(Stage 1) | | |
(Stage 1) | |
Performance guarantees | |
| 81,537 | | |
| 79,950 | |
Financial guarantees | |
| 1,116 | | |
| 783 | |
Total | |
| 82,653 | | |
| 80,733 | |
Financial guarantees are issued to Russian companies that do not have
an external credit rating. Performance guarantees are issued to small and medium enterprises within the ROWI segment. Starting January 1,
2023, for the assessment of expected credit losses of the performance guaranties the Group applies the same methodology as for the financial
guaranties based on the provisions of IFRS9 “Financial Instruments”. Management does not believe that expected losses from
the performance guarantees will exceed the amount of contract liability provided for in these interim condensed consolidated financial
statements (see Note 9.2).
Credit related commitments
The primary purpose of these instruments is to ensure that funds are
available to a customer as required. Commitments to extend credit represent unused portions of authorizations to extend credit in the
form of loans. With respect to credit risk on commitments to extend credit, the Group is potentially exposed to loss in an amount equal
to the total unused commitments, if the unused amounts were to be drawn down.
| |
December 31, 2022 | | |
June 30, 2023 | |
| |
(Stage 1) | | |
(Stage 1) | |
Unused limits on loans to legal entities | |
| 1,618 | | |
| 2,636 | |
Credit loss allowance | |
| (19 | ) | |
| (60 | ) |
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
20. | Balances and transactions with related parties |
The following table provides the total amount of transactions that
have been entered into with related parties during the six months ended June 30, 2023 and 2022, as well as balances with related
parties as of June 30, 2023 and December 31, 2022:
| |
For the six months ended
June 30, 2023 | | |
As of June 30, 2023 | |
| |
Sales to/
income from
related parties | | |
Purchases/
expenses from related
parties | | |
Amounts
owed by
related
parties | | |
Amounts
owed to
related
parties | |
Associates | |
| 11 | | |
| – | | |
| 131 | | |
| (47 | ) |
Key management personnel | |
| – | | |
| (269 | ) | |
| – | | |
| (256 | ) |
Other related parties | |
| 15 | | |
| (40 | ) | |
| 77 | | |
| (30 | ) |
| |
For the six months ended
June 30, 2022 | | |
As of December 31, 2022 | |
| |
Sales to/
income from
related parties | | |
Purchases/
expenses from related
parties | | |
Amounts
owed by
related
parties | | |
Amounts
owed to
related
parties | |
Associates | |
| – | | |
| – | | |
| – | | |
| (3 | ) |
Key management personnel | |
| – | | |
| (273 | ) | |
| – | | |
| (244 | ) |
Other related parties | |
| – | | |
| (6 | ) | |
| 101 | | |
| (11 | ) |
Benefits of key management and Board of Directors
for the six months ended June 30, 2023 comprise of short-term benefits of 173 and benefits under long-term incentive programs
of 96 (164 and 69, respectively, and share-based payments of 40 - for the six months ended June 30, 2022).
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
The Group's principal financial instruments comprise loans receivable,
trade and other receivables, customer accounts and amounts due to banks, trade and other payables, cash and cash equivalents, long- and
short-term debt instruments and reserves at CBR. The Group has various financial assets and liabilities which arise directly from its
operations. During the reporting period, the Group did not undertake trading in financial instruments.
The fair value of the Group's financial instruments as of June 30,
2023 and December 31, 2022 is presented by type of the financial instrument in the table below:
| |
| | |
As of December 31, 2022 | | |
As of June 30, 2023 | |
| |
| | |
Carrying
amount | | |
Fair value | | |
Carrying
amount | | |
Fair value | |
Financial assets | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt securities | |
| AC | | |
| 4,155 | | |
| 4,131 | | |
| 5,101 | | |
| 5,004 | |
Debt securities | |
| FVOCI | | |
| 12,820 | | |
| 12,820 | | |
| 28,699 | | |
| 28,699 | |
Long-term loans | |
| AC | | |
| 822 | | |
| 822 | | |
| 623 | | |
| 623 | |
Long-term loans | |
| FVPL | | |
| 21 | | |
| 21 | | |
| – | | |
| – | |
Option received from ADAH | |
| FVPL | | |
| 470 | | |
| 470 | | |
| 158 | | |
| 158 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Financial liabilities | |
| | | |
| | | |
| | | |
| | | |
| | |
Bonds issued | |
| AC | | |
| 3,922 | | |
| 3,887 | | |
| 3,745 | | |
| 3,739 | |
Financial instruments used by the Group are included in one of the
following categories:
| • | AC – accounted at amortized cost; |
| • | FVOCI – accounted at fair value through other comprehensive
income; |
| • | FVPL – accounted at fair value through profit or loss. |
Carrying amounts of cash and cash equivalents, short-term loans issued,
short-term deposits placed, debt, accounts receivable and payable, reserves at CBR, lease liabilities, customer accounts and amounts
due to banks approximate their fair values largely due to short-term maturities of these instruments.
Debt securities of the Group mostly consist of RUB nominated government
and high-quality corporate bonds with interest rate 0.0% - 12.33% and maturity up to January 2037.
Long-term loans generally represent RUB-denominated loans to Russian
legal entities and have a maturity up to three years. For the purpose of fair value measurement of these loans the Group uses comparable
market interest rates which range between 9 and 38%.
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
21. | Financial instruments (continued) |
The following table provides the fair value measurement hierarchy
of the Group’s financial instruments to be accounted for or disclosed at fair value:
| |
| | |
| | |
Fair value measurement using | |
| |
| | |
| | |
Quoted prices
in active
markets | | |
Significant
observable
inputs | | |
Significant
unobservable
inputs | |
| |
Date of valuation | | |
Total | | |
(Level 1) | | |
(Level 2) | | |
(Level 3) | |
Assets accounted at fair value through profit or loss | |
| | | |
| | | |
| | | |
| | | |
| | |
Long-term loans | |
| June 30, 2023 | | |
| – | | |
| – | | |
| – | | |
| – | |
Option received from ADAH | |
| June 30, 2023 | | |
| 158 | | |
| – | | |
| – | | |
| 158 | |
Assets accounted at fair value through other comprehensive income | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt securities | |
| June 30, 2023 | | |
| 28,699 | | |
| 28,699 | | |
| – | | |
| – | |
Assets for which fair values are disclosed | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt securities | |
| June 30, 2023 | | |
| 5,004 | | |
| 5,004 | | |
| – | | |
| – | |
Long-term loans | |
| June 30, 2023 | | |
| 623 | | |
| – | | |
| – | | |
| 623 | |
Liabilities for which fair values are disclosed | |
| | | |
| | | |
| | | |
| | | |
| | |
Bonds issued | |
| June 30, 2023 | | |
| 3,739 | | |
| 3,739 | | |
| – | | |
| – | |
Assets accounted at fair value through profit or loss | |
| | | |
| | | |
| | | |
| | | |
| | |
Long-term loans | |
| December 31, 2022 | | |
| 21 | | |
| – | | |
| – | | |
| 21 | |
Option received from ADAH | |
| December 31, 2022 | | |
| 470 | | |
| – | | |
| – | | |
| 470 | |
Assets accounted at fair value through other comprehensive income | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt securities | |
| December 31, 2022 | | |
| 12,820 | | |
| 12,820 | | |
| – | | |
| – | |
Assets for which fair values are disclosed | |
| | | |
| | | |
| | | |
| | | |
| | |
Debt instruments | |
| December 31, 2022 | | |
| 4,131 | | |
| 4,131 | | |
| – | | |
| – | |
Long-term loans | |
| December 31, 2022 | | |
| 822 | | |
| – | | |
| – | | |
| 822 | |
Liabilities for which fair values are disclosed | |
| | | |
| | | |
| | | |
| | | |
| | |
Bonds issued | |
| December 31, 2022 | | |
| 3,887 | | |
| 3,887 | | |
| – | | |
| – | |
There were no transfers between Level 1 and Level 2 fair value measurements
and no transfers into or out of Level 3 fair value measurements during the six months ended June 30, 2023.
The Group uses the following IFRS hierarchy for determining and disclosing
the fair value of financial instruments by valuation technique:
- | Level 1: Quoted (unadjusted) prices
in active markets for identical assets or liabilities; |
- | Level 2: Other techniques for which
all inputs that have a significant effect on the recorded fair value are observable, either
directly or indirectly; |
- | Level 3: Techniques that use inputs
that have a significant effect on the recorded fair value that are not based on observable
market data. |
QIWI plc
Notes to interim condensed consolidated financial
statements (Unaudited) (continued)
(in millions of rubles, except when otherwise
indicated)
21. | Financial instruments (continued) |
Valuation methods and assumptions
The fair value of the financial assets and liabilities are evaluated
at the amount the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale.
Long-term fixed-rate loans issued are evaluated by the Group based
on parameters such as interest rates, terms of maturity, specific country and industry risk factors and individual creditworthiness of
the customer. With regard to the level 3 assessment of fair value of loans issued, management believes that no reasonably possible change
in any of the unobservable inputs would be sensitive for the fair value of these assets.
22. | Events after the reporting date |
CBR inspection
At the end of July, 2023, during a routine audit of Qiwi Bank, the
CBR issued an order to introduce temporary and partial limitations for individuals to withdraw funds from
QIWI wallets to bank accounts or make cash withdrawals. As of the date of this condensed consolidated financial statements, Qiwi Bank
has already fixed the identified deficiencies and provided the respective evidence to the regulator. Management is currently working
closely with the CBR to lift these limitations fully or at least partially. The Group remains financially stable and profitable despite
the imposed restrictions. Qiwi Bank has substantial liquidity reserves and maintains the required capital adequacy ratios.
Taxation
In August, 2023, Federal Law 414-FZ was issued in Russia with the effective
date of January 1, 2024. It introduces a one-off special tax (windfall tax) which Russian Group subsidiaries are subject to. Although
certain terms and aspects of the windfall tax law are unclear and subject to interpretation, it is expected that in case companies will
transfer the windfall tax in the form of a voluntary "security payment" to the Russian federal budget in the fourth quarter
of 2023 they may reduce the effective rate by up to 50%. The Group expects to utilize the “early payment” option and expects
to settle its windfall tax obligation in the fourth quarter 2023 by making a payment of up to RUB 0,5 billion.
In August, 2023, the Russian Federation suspended certain articles
of its double taxation treaties with a number of countries, including Cyprus. Consequently, the withholding tax rate in respect of dividends
paid to Cyprus is 15% and in respect of interest and royalties, 20%.
Exhibit 99.3
Acknowledgement Letter of Independent Registered
Public Accounting Firm
To the Shareholders and Board of Directors of QIWI plc
Nicosia, Cyprus
With respect to the registration statements (No. 333-190918 and No. 333-212441) on Form S-8, we acknowledge our awareness of the use therein of our report dated August 16, 2023 related to our review of the unaudited interim condensed consolidated financial information of QIWI plc that is included in its Form 6-K dated August 16, 2023.
Pursuant to Rule 436 under the Securities Act of 1933 (the Act), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.
/s/ JSC “Kept”
Moscow, Russia
August 16, 2023
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