OREANDA-NEWS. On April 17, 2007 “COMSTAR - United TeleSystems” announced its unaudited consolidated US GAAP financial results for the fourth quarter and twelve months ended December 31, 2006, reported the press-centre of COMSTAR.

FULL YEAR HIGHLIGHTS
Consolidated revenues up 23% year on year to US$ 1,12 billion
Group OIBDA  before non-recurring US$ 62,1 million stock bonus awards up 19% year on year to US$ 428,6 million with margin of 38,3%
Cash flow from operations up 25% year on year to US$ 333,7 million before US$ 62,1 million stock bonus awards
US$ 975,5 million raised through successful  initial public offering and listing on London Stock Exchange
US$ 181,4 million invested to increase shareholding in MGTS from 46% to 56%
US$ 1,3 billion of cash invested in landmark acquisition of 25% plus 1 share stake in state telecommunications operator Svyazinvest

FOURTH QUARTER HIGHLIGHTS
Consolidated revenues up 8% year on year to US$ 292,1 million
Group OIBDA before the stock bonus awards up 9% year on year to US$ 97,4 million with margin of 33,3%
Cash flow from operations up 72% year on year to US$ 91,8 million before the stock bonus awards
US$ 33,4 million adverse impact on net income following revaluation of put and call option issued as part of Svyazinvest share acquisition


Eric Franke, Chief Executive Officer, commented: “2006 was a year of significant and far reaching change for the Group. The year started with the raising of nearly one billion US dollars through our IPO and ended with the strategic acquisition of a 25 per cent plus one share stake in state telecommunications investment company Svyazinvest. During 2006 Comstar was successfully transformed from a loose collection of related but un-integrated telecommunications companies and brands. The re-branding program has been successfully accomplished, and the restructuring of Comstar Moscow has now been largely completed.  We have reorganized the Group from the top down and put in place a new management structure. Despite the regulatory changes we managed to show healthy revenue and OIBDA growth. Our efforts to optimize the Group’s operations have laid the foundation for increasing profitability moving forward, despite the wide ranging regulatory changes to which we have successfully adopted”.


Nikolay Tokarev, Chief Financial Officer, added: “The US$ 976 million of net proceeds from our successful IPO at the beginning of the year, combined with substantially increased cash flow from operations, enabled us to invest over US$ 300 million in our existing operations, and to spend over US$ 1,5 billion on key scale acquisitions in existing and new markets, as well as increased shareholdings in core assets. The Svyazinvest acquisition has already created significant value for Comstar shareholders when acquisition cost is measured against 25% of the total of the current market values of Svyazinvest’ stakes in its publicly listed subsidiaries.

“The fourth quarter results were adversely impacted by the exceptional US$ 62,1 million stock bonus awarded under the approved by shareholders in 2006 share option program, as well as by a non-cash charge to net income of US$ 33,4 million arising from the revaluation of the put and call option issued in connection with the acquisition of the stake in Svyazinvest. Excluding these items, Comstar delivered solid operating performance. With 23% growth to over 1,1 billion dollars in revenues, and with OIBDA margin before stock award of over 38%, Comstar is among the largest and fastest growing public fixed-line telecoms operators in Russia. It is also the most profitable among them” .