OREANDA-NEWS  On 25 November Rostelecom (NYSE: ROS; RTS and MICEX: RTKM, RTKMP), Russia’s national telecom operator, announced its unaudited results for January-September 2008 in accordance with Russian Accounting Standards (RAS).

Revenue generated by Rostelecom in the first nine months of 2008 amounted to Rub 46.41 bln, largely flat against the year-earlier period;

Outgoing ILD traffic increased 6.7% vs. January-September 2007 and incoming ILD traffic spiked 7.1%;

Datacom and telematics earnings more than tripled y-o-y to Rub 2,019.5 mln;

OIBDA[2]jumped 9.3% y-o-y to Rub 12.06 bln and OIBDA margin came in at 26%;

The company’s nine-month net profit amounted to Rub 6.92 bln compared to Rub 8.84 bln in the same period a year ago.

Rostelecom’s 9M08 revenue remained largely unchanged compared to the year-earlier period (Rub 46.41 bln).

In the reporting period, DLD traffic amounted to 7,514.2 mln minutes, up 0.2% y-o-y. The telecom operator’s DLD earnings dropped 5% to Rub 21.94 bln.

Given the changes in the fixed-line market due to DLD traffic outflow from fixed-line networks to mobile ones, to offer subscribers competitive tariffs the company adheres to  flexible pricing methods, which keeps DLD traffic volumes from falling amid a drop in DLD earnings.

Outgoing international (ILD) traffic increased by 6.7% to 1,511.1 mln minutes. Earnings from ILD services offered to Russian clients totaled Rub 9.05 bln or 4.1% less than in the same period a year ago. This is attributable to changes in the structure of outgoing international traffic.

ILD traffic from foreign operators surged 7.1% vs. January-September 2007 to 2,407.6 mln minutes, which reflects Rostelecom’s stable positions on the international interconnect market. Earnings from termination and transit of incoming ILD traffic rose 5.9% y-o-y to Rub 4,455.9 mln.

Rostelecom continues to ramp up the portion of datacom earnings, which reflects the trend whereby earnings from these services are rising faster than those from the traditional services which the company provides.

The company’s profit from other services rose 11.8% y-o-y to Rub 10.95 bln in January-September 2008. This occurred due to a rise in earnings derived from datacom and telematic services, the lease of telecom lines, intellectual network services and also maintenance fees.

Profit from datacom and telematics services soared 3.4-fold in January-September 2008 to Rub 2.01 bln.

Intellectual network revenues climbed 21.7% to Rub 924.1 mln.

The company’s profit from line lease went up 1.1% y-o-y to Rub 5.88 bln.

Rostelecom’s operating expenses amounted to Rub 37.56 bln, representing a 2.1% drop compared to the year-earlier period.

Depreciation charges totaled Rub 3.21 bln in January-September 2008. A 12.7% y-o-y spike in depreciation charges was driven by the commissioning of some new fixed assets in 2007.

OIBDA increased 9.3% y-o-y to Rub 12.06 bln. One of the main factors that pushed up Rostelecom’s OIBDA was a drop in the company’s operating expenses owing to the cancellation of the compensatory surcharge effective January 1, 2008. OIBDA margin came in at 26%.

9M08 operating profit jumped 8.1% on the year to Rub 8.85 bln.

Other profits and losses in the first three quarters of 2008 amounted to Rub 412.1 mln compared to Rub 3.52 bln a year earlier.

Rostelecom’s nine-month net profit slid to Rub 6.92 bln from Rub 8.84 bln in the same period a year ago due to a reduction in financial investments that are subject to revaluation, given profit derived in Q108 from investments in stocks of other issuers and also owing to negative forex differences in January-September 2008.