Russian e-payment system Qiwi reported IFRS 4Q20 flat year-on-year revenue growth to RUB6.2bn ($82mn), with Ebitda and net income jumping by 125% and 117% y/y respectively, with 58% and 40% margins.

As reported by bne IntelliNews, Qiwi is facing strong regulatory headwinds in the online betting segment, the main revenue stream of the company. The capitalisation of the company dropped as the Central Bank of Russia (CBR) limited the operations Qiwi Bank as part of the regulator's crackdown on online gambling.

In 4Q20 the payments segment saw revenue growth decelerate (to +6% y/y from +11% in 3Q20), while adjusted net income was around flat (+1%) due to the negative impact from the CBR suspending or limiting most of Qiwi’s payments to foreign merchants, BCS Global Markets commented on March 31.

"Results were solid on the bottom line, as expected, while revenue was under pressure. Qiwi did not cancel dividends, which could be positive for sentiment, but we note that risks to the top line are significant, confirmed in 2021 guidance," BCS GM notes.

The payment system expects 2021 revenues to decline by 15-25%, with net income anticipated to decline by 15-30%. For 2021, Qiwi’s BoD approved a target of at least 50% payout of adjusted net income.

"The worst-case declines reflect a scenario in which Qiwi is unable to restore its currently suspended cross-border payment operations and also loses more than 50% of its sports betting-related revenue due to a new regulation expected to come into force in September," Sova Capital commented on March 31.

So far, the CBR has allowed Qiwi to resume payments to “certain key foreign merchants”, but they are “not significant” in volume.

In a separate announcement prior to the publication of the IFRS results, Qiwi also announced its CEO Boris Kim intends to resign in June 2021, while Andrey Protopopov (current head of payments segment) will become CEO instead. Previously the CFO of Qiwi, Pavel Korzh, said he would step down in April 2020, only a few months after being appointed in December 2020.

"Qiwi is in chaos as CBR deprived it of [its] main revenue source," unnamed sources on the payment market told The Bell.

"With numerous uncertainties in Qiwi's major areas of operation, we view the results and management comments as mixed for now," Sova Capital wrote, seeing the major catalysts for Qiwi going forward as further easing of CBR restrictions on cross-border payments, if any, and/or Qiwi becoming Russia’s centralised processor of betting payments. 

Both Sova Capital and BCS GM analysts have the rating on Qiwi's share as Under Review.