OREANDA-NEWS. On 22 June 2009 was announced, that SBTLY, Frankfurt and Berlin Stock Exchanges – ISIN: US8257351036, WKN: 260452), a telecommunication operator in the Siberian Federal District, submits the audited consolidated financial statements for 2008 prepared in accordance with international financing reporting standards (IFRS). The financial statements for 2008 were audited by KPMG CJSC.

The audited consolidated financial statements includes assets, liabilities and the results of activities of Sibirtelecom OJSC and its subsidiary enterprises, hereinafter referred to as the Company. Providing cellular communication services and other telecommunication services is the major activity of its subsidiary enterprises.

Main financial indices in accordance with IFRS (bln rubles):

 

2008

2007

Change, %

Revenues

37,674

35,246

6.9

OIBDA

13,095

12,286

6.6

OIBDA margin

34,8%

34.9%

 

EBITDA

11,870

12,403

(4.3)

EBITDA margin

31.5%

35.2%

 

Operating expenses

33,080

30,170

9.6

Operation profit

5,738

6,158

(6.8)

Margin of profit from operating activities

15.2%

17.5%

  

Profit before income tax

2,434

4,238

(42.6)

Profit for the year

1,529

2,659

(42.5)

Profit margin for the year

4.1%

7.5%

 

The Company Revenues

Ø     The consolidated revenues of the Company in 2008 increased by 2,428 mln rubles or by 6.9% as compared with 2007 and amounted to 37,674 mln rubles.

In the structure of consolidated revenues of the Company, the main components are the incomes from provided services of local telephone connection (11,432 bln rubles) and services of cellular communication (9,951 mln rubles) or 30.3% and 26.4%, respectively. The significant items in the income structure are incomes from provided services of intra-zone telephone communication (5,383 mln rubles) and services of data transmission network and telematic services (Internet) (4,401 mln rubles), 14.3 and 11.7%, respectively. The incomes received from the connection and traffic transmission services amounted to 10.9% (4,106 mln rubles) of the consolidated revenues.

The main sources of the Company income growth in the reporting period are the growth of the subscriber base of the cellular communication and the development of services of broad-band access.

As compared with 2007, in 2008:

§         The greatest growth of incomes occurred due to providing services of data transmission network and telematic services (Internet): 1,337 mln rubles or 43.6%. The main factors are the growth of the number of users of services of broad-band access and consequently the increase in incomes from providing an Internet access (dedicated and dial-up). In 2008, the number of subscribers of broad-band access increased by 2.2 times and amounted to 415 thousand of users at the end of the reporting period;

§         The growth of incomes from provided services of cellular communication amounted to 842 mln rubles or 9.2% due to the increased subscriber base. For the reporting period the subscriber base increased by 14% and exceeded 4.8 mln subscribers;

§         The growth of rental income amounted to 271 mln rubles or 91.2%, which is governed by the increased number of leased objects;

§         The growth of incomes from intra-zone telephone services was 161 mln rubles or 3.1%, which is caused by the increased traffic from the fixed-line subscribers to the networks of cellular operators.

The structure of revenues of the Company (mln rubles):

Type of revenues

2008

2007

Change

mln rubles

%

Services of local telephone services

11,432

11,547

(115)

(1.0)

Mobile communication services

9,951

9,109

842

9.2

Intra-zone telephone services

5,383

5,222

161

3.1

Services of telegraph communication network, network of data transmission and telematic services (Internet)

4,654

3,282

1,372

41.8

including services of network of data transmission and telematic services (Internet)

4,401

3,064

1,337

43.6

Interconnection services

4,106

4,255

(149)

(3.5)

Fees on assistance services and agency fees

609

649

(40)

(6.2)

Rental income

568

297

271

91.2

Radio and TV broadcasting

426

406

20

4.9

Other telecommunication services

10

67

(57)

(85.1)

Other revenues

535

412

123

29.9

Total

37,674

35,246

2,428

6.9

The Company expenses

Ø     In 2008 the consolidated expenses of the Company increased by 2,910 mln rubles or by 9.6% as compared with 2007 and amounted to 33,080 mln rubles.

In the total amount of expenses, the greatest share belongs to salary expenses, other payments and social allocations (31.8%), other operational expenses (23.0%), depreciation and amortization (22.2%).

As compared with 2007, in 2008:

§         The growth of other operational expenses was 1,352 mln rubles or 21.6% which is governed by the increased expenses for transportation services, services of outside organizations and expenses related to management, formation of provision for depreciation on fixed assets, incompleted construction and intangible assets;

§         The depreciation and amortisation increased by 1,229 mln rubles or by 20.1%, which is caused by the active investment policy of the Company aimed at the network development;

§         The growth of interconnection charges was 485 mln rubles or 12,4%, which was governed by the growth of traffic subject to payment in the order of interoperator relations in accordance with the regulatory and legal framework of the branch;

§         The reduction of personnel costs by 280 mln rubles or by 2.6% is caused by measures to optimize the number of employees.

The structure of expenses of the Company (mln rubles):

Type of expenses

2008

2007

Change

mln rubles

%

Personnel costs

(10,504)

(10,784)

280

(2.6)

Depreciation and amortisation

(7,357)

(6,128)

(1,229)

20.1

Interconnection charges

(4,400)

(3,915)

(485)

12.4

Materials, repair and maintenance, utilities

(3,217)

(3,093)

(124)

4.0

Other operational expenses

(7,602)

(6,250)

(1,352)

21.6

Total

(33,080)

(30,170)

(2,910)

9.6

The capital expenses of the Company

Ø     The amount of capital expenses of the Company in 2008 was 12.5 bln rubles, which is less than the level of 2007 by 5.6%. The main part of capital expenses in 2008 is used for the development of telephone communication facilities, the network of data transmission and the objects of communication infrastructure. The level of investments in the development of services of mobile radiotelephony (cellular communication) made up 20% of the total capital investments in 2008.

Debt load of the Company

Ø     The debt load of the Company is maintained at the supportable level. At the end of 2008, the total debt was 24.9 bln rubles (53% of which is a permanent debt), which is higher by 11.3% than this index in 2007. The net-debt-to-EBITDA ratio is 1.9.

Financial results of the Company

As compared with 2007, in 2008:

Ø     The growth of OIBDA index amounted to 809 mln rubles or 6.6%. OIBDA margin is 34.8%.

Ø     The operating profit decreased by 420 mln rubles or by 6.8% and amounted to 5,738 mln rubles, which was caused by the higher-than-anticipated growth of expenses (9.6%) as compared with the growth of incomes (6.9%).

The operating profit comprises the payment of damages from provided universal communication services in the amount of 680 mln rubles and other operational expenses in the amount of 464 mln rubles.

The margin of operating profit is 15.2%.

Ø     The profit before income tax reduced by 1,804 mln rubles or by 42.6% and amounted to 2,434 mln rubles, which is governed by the decreased operation profit and the result of influence of non-monetary losses due to currency differences.

Ø     The profit for the year amounted to 1,529 mln rubles having decreased by 42.5% as compared with 2007. The profit margin for the year is 4.1%. The non-monetary losses due to currency differences (a negative balance with respect to currency differences was 1,230 mln rubles) were the basic factor of reduction in the net profit.

The audited consolidated financial statements of Sibirtelecom OJSC for 2008 in accordance with IFRS are available on the corporate site of the Company www.sibirtelecom.ru in the section “Financial Statements for Investors”.