OREANDA-NEWS. September 19, 2007.  VolgaTelecom (RTS: NNSI/NNSIP, MICEX: VTEL/VTELP, ADR: VLGAY) presents non-audited financial statements for 1H 2007 prepared in accordance with International Financial Reporting Standards (IFRS).

According to non-audited financial statements for 1H 2007:

- the Company’s consolidated revenues amounted to RUR 14 450,4 million which is by 25,2% more vs. the same period of 2006;

- operating profit has grown by 15,5% vs. 1H 2006 and amounted to RUR 2 841,7 million;

- net income accounted for RUR 1 612,2 million which is by 6,4% more vs. similar period of 2006;

- EBITDA has grown by 21,2% - to RUR 5 508,2 million; EBITDA margin – 38,1%.

At June 30, 2007 non-current assets accounted for RUR 37 576,6 million which is by 2,9% more than the similar indicator at December 31, 2006.

Long-term and short-term borrowings and loans have grown by 5% since the beginning of the current year and at June 30, 2007 amounted to RUR 11 631,8 million.

Revenue growth was due to:

- Increase in growth rates of revenue from services rendered to Russian operators.  In the reporting period, due to the change of settlements procedure for interconnections effective since July 1, 2006, VolgaTelecom’s revenue from connection and traffic transit services accounted for RUR 2 246 million, which is by 40,5% more than the indicator of the similar period of 2006;

- Gain on intra-region telephony services revenue. The revenue amounted to RUR 2 319,4 million, the growth rate of 173,3% vs. similar period of 2006. The major driver of revenue growth rates was introduction of CPP principle effective since July 1, 2006;   

- Increase in Internet access services revenue. In 1H 2007 the subscribers’ base of wideband access services users has grown by 56% and amounted to 187 000 users. The share of Internet access services revenue in the Company’s overall revenue structure has grown from 7,3% (1H 2006) to 8,7% in the reporting period;

- Increase in mobile cellular services revenue. In the reporting period this sector’s revenue accounted for RUR 1 967 million (growth rate of 118,5% vs. H1 2006). The number of cellular subscribers has grown by 42,3% and is 2,5 million.

The Company’s operating expenses amounted to RUR 11 608,7 million.

The increase in operating expenses was mainly due to;

 - the increase in volume of payments to operators due to the change of interconnection settlement procedure effective since July 1, 2006;

- the growth of depreciation charges related to the increase in CAPEX in accordance with the Company’s investment program.

Performance indicators

The number of lines per an employee has grown by 34,2% to 192 lines (143 lines in H1 2006).

Revenue per a line has grown by 11% - from RUR 1743,2 in 1H 2006 to RUR 1934,4 in the reporting period. 

Revenue per an employee amounted to RUR 372 000, which is by 48,9% more than in 1H 2006 (RUR 250 000).

At 1H 2007 end the Company’s headcount has decreased by 16% and at June 30, 2007 it was 38 500.

The full version of IFRS statements is available at VolgaTelecom’s site at:  http://www.vt.ru/4043