OREANDA-NEWS. On 14 April Southern Telecommunications, the largest fixed-line operator in the Southern Federal District of Russia, announced its 2007 audited financial report drafted to Russian Accounting Standards (RAS).

- 2007 sales rose 12.5% y-o-y to Rub 19.8 bln;

- EBITDA amounted to Rub 7.3 bln in 2007, 16.5% more than the 2006 indicator. EBITDAmargincameinat37.2% in2007 (a1.3% increase).

- Earnings derived from datacom and Internet access services soared 65.2% to Rub 2.7 bln in the reporting period. The weighting of these revenue items in the operator’s tariff earnings grew 4.3% vs. 2006 to 14.1%.

 Southern Telecommunications Company’s 2007 sales jumped 12.5% y-o-y to Rub 19,772.4 mln. Meanwhile, COGS grew 11.6% to Rub 14,274.9 mln. As a result, operating profit rose 14.9% to Rub 5,497.5 mln, net profit rocketed 54.2% to Rub 1,826.8 mln and EBITDA came to Rub 7,348 mln in the reporting period or 16.5%more than in 2006.

Local voice earnings leapt 7.2% to Rub 9,008.6 mln (47.6% of the company’s tariff earnings) following a hike of local voice tariffs in February 2007.

Intrazonal revenues surged 23.8% to Rub 3,768.9 mln (19.9% of the company’s tariff earnings) in connection with introduction of the CPP principle.

Aggressive expansion and the promotion of new technologies allowed the company to boost its datacom and Internet revenues by a solid 65.2% to Rub 2,669.7 mln (14.1% of the company’s tariff earnings), while broadband Internet users skyrocketed 130.7% to 169,600.

 Interconnect and traffic transmission earnings dropped 0.7% to Rub 2,895.5 mln (15.3% of the company’s tariff earnings).

In 2007, payroll expenses amounted to Rub 4,297.7 mln (30.1% of the company’s expenses), growing 1.2% against 2006. Fixed asset depreciation jumped 10.7% to Rub 2,887.5 mln (20.2% of the company’s cost mix). Tangible costs climbed 13.6% to Rub 1,666.9 mln (11.7% of the company’s cost mix). Expenses related to the services provided by telecom operators rocketed 74.6% to Rub 1,738.3 mln (12.2% of the company’s cost mix) owing to a sharp rise in Internet traffic and introduction of the CPP principle.

In 2007 the company continued operations to optimize its headcount in order to improve operating efficiency. As a result, the average number of the company’s direct staff decreased 16.2% to 28,852 and lines per employee increased 20.3% to 141.6 lines.

Southern Telecommunications Company’s 2007 investments totaled Rub 4,079.7 mln or a record 98.6% higher than in 2006, with 100% of capital investments made using in-house funds. The digitalization rate of the telecom carrier’s local voice network improved 3.61% y-o-y, reaching 68.89% at the beginning of 2008.