OREANDA-NEWS. On April 04, 2008 Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the principal fixed-line telecommunications provider for Russia’s Southern Federal District, announced its audited financial results for the year 2007 compiled in accordance with Russian Accounting Standards (RAS), reported the press-centre of UTK.

2007 revenue is up 12,5% over 2006  to RUR 19,8 billion;

2007 EBITDA increased 16,5% over 2006 to RUR 7,3 billion representing an EBITDA margin of 37,2% (up 1,3 percentage points);

Revenue from data transmission and Internet access services increased 65,2% to RUR 2,7 billion. Share of revenues from these services in total telecom revenue increased by 4,3 percentage points over 2006 to 14,1%.

UTK’s 2007 revenue made RUR 19,772.4 million, representing a 12,5%- increase over 2006. Operating expenses grew by 11,6% to RUR 14,274.9 million. Thus, 2007 operating profit was up 14,9% to RUR 5,497.5 million and 2007 net profit was up 54,2% to RUR 1,826.8 million. EBITDA for the reporting period amounted to RUR 7,348.0 million or 16,5% higher than in 2006.

Revenues from local telephone services increased by 7,2% to RUR 9,008.6 million due to the increase in local tariffs in February 2007and accounted for 47,6% of the Company’s telecom revenues.

Revenues from intra-zonal telephone services rose 23,8% to RUR 3,768.9 million in the period due to introduction of “Calling Party Pays” principle and accounted for 19,9% of the Company’s telecom revenues.

Active development and roll out of new technologies enabled UTK to increase 2007 revenues from data transfer and Internet access services by 65,2% to RUR 2,669.7 million, accounting for 14,1% of the Company’s telecom revenues.. Number of Internet broadband access subscribers surged 130,7% to 169,6 thousand users.

Revenues from interconnection and traffic transit services decreased 0,7% to 2,895.5 million roubles accounting for15,3% of the Company’s telecom revenues.

2007 expenses for wages and salaries increased 1,2% over 2006 to RUR 4,297.7 million accounting for 30,1% of the Company’s operating expenses. Depreciation charges grew 10.7% to RUR 2,887.5 million accounting for 20,2% of the Company’s operating expenses.. 2007 material expenses amounted to RUR 1,666.9 million representing a 13,6%-increase over 2006 and accounting for 11,7% of the Company’s operating expenses.. Amount of payments to national telecom operators rose 74,6% to RUR 1,738.3 million due Internet traffic growth and introduction of “Calling Party Pays” principle and accounted for 12,2% of the Company’s operating expenses.

In 2007 the Company continued to optimize the headcount aiming to raise UTK’s business efficiency. As a result the Company managed to slash the average number of employees by 16,2% to 28,852 people and bring a number of lines per employee to 141,6 representing a 20,3%-increase.

2007 capex amounted to RUR 4,079.7 million, a 98,6% increase over. 2006. Capex were funded only from in-house funds. Digitalization rate of the Company’s local network climbed 3,61% y-o-y and stood at 68,89% as of the beginning of 2008.

The Company’s financial statements can be viewed at the corporate website in the section "Investor relations. Financial reports": www.stcompany.ru