OREANDA-NEWS. May 3, 2007.  Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia’s national long-distance telecommunications operator, today announced unaudited first quarter 2007 results in accordance with Russian accounting legislation (RAS).

In total, Rostelecom’s first quarter 2007 revenues amounted to RUR 15,206.2 million - a year-on-year increase of 4.3%.

Domestic long-distance (DLD) traffic for the first three months 2007 grew by 3.1% to 2,491.8 million minutes. First quarter 2007 DLD revenues decreased by 2.1% and totaled RUR 7,693.7 million.

Outgoing international long-distance (ILD) traffic rose 2.5% to 462.8 million minutes. ILD revenues from Russian operators and subscribers amounted to RUR 3,113.7 million down 2.7% year on year.

First quarter 2007 incoming ILD traffic totaled 662.9 million minutes - a year-on-year increase of 26.7%. Rostelecom increased its share of incoming international traffic, underscoring the strength of the Company’s market position. Revenues from international operators for incoming ILD traffic transit and termination rose 19.6% year on year to RUR 1,213.3 million.

Revenue from other business segments increased by 26.7% compared to Q1 2006 to RUR 3,185.5 million, reflecting the growth of new products and services. Rostelecom delivered solid increases in revenues from leased lines, intelligent network services and customer equipment servicing. For the first three months of 2007, revenues from leased line services grew 13,9% to RUR 1,973.5 compared to the same period last year.

Rostelecom’s operating expenses for the first quarter 2007 amounted to RUR 12,222.2 million down 0.5% year on year.

Depreciation for the first three months of 2007 amounted to RUR 926.6 million. The increase of 20.5% compared to the same period last year is a result of significant additions of property, plant and equipment in 2006.

Thus, EBITDA for the first quarter 2007 grew 27.4% year on year to RUR 3,910.6 million, representing an EBITDA margin of 25.7%.

Operating profit amounted to RUR 2,984.0 million, up 29.7% year on year.

The result from other activities for the first three months 2007 totaled RUR 902.9 million compared to RUR 395.5 million a year ago. The increase is mainly driven by a revaluation of the Company’s financial investments. Rostelecom recorded a RUR 848.4 million net revaluation gain for the first quarter 2007 compared to RUR 368.1 million net revaluation gain for the same period last year.