OREANDA-NEWS. On 18 August 2009 Southern Telecommunications Company (UTK) [(RTS: KUBN, KUBNP; МICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the largest fixed-line operator in the Southern Federal District of Russia, presented its unaudited financial results for the first six months of 2009 in accordance with Russian Accounting Standards (RAS).

UTK’s revenue amounted to Rub 10,751.1 mln in the first half of 2009, which is 4.9% higher than in the year-earlier period.  By contrast, expenses rose by only 1.8% to Rub 8,035.5 mln.

Revenue from local voice telephony increased by 1.2% to Rub 4,739.8 mln (45.8% in the company’s revenue breakdown), which is attributable to local voice tariff hikes effective March 1, 2009.

Revenue from intrazonal telephony decreased by 5.7% and amounted to Rub 1,725.3 mln (16.7% of the company’s revenue breakdown), which is due to a decrease in demand for calls between fixed-line network users and from fixed-line network users to mobile telephony subscribers.

As a result of an increase in the broadband access subscriber base, Internet revenue from datacom and ISP rose by 34.7% to Rub 2,632.8 mln in the first half of 2009.  At the end of H1 2009 the share of this revenue in the company’s revenue breakdown increased by 5.6% to 25.4%.

Revenue from interconnect and traffic transmission decreased by 12.5% to Rub 988.9 mln (9.5% in the company’s revenue breakdown) as a result of structural changes in traffic and the cancellation in accordance with the legislative procedure of charges at interconnection points as of March 1, 2008.

Payroll expenses in the first six months of 2009 amounted to Rub 2,241 mln (27.9% of the company’s cost side), which is 7.2% less than in the same period a year ago.

The depreciation of fixed assets rose by 14.7% to Rub 1,995.1 mln (24.8% of the company’s cost side).

Material expenses decreased by 9.9% to Rub 768.7 mln (9.6% of the company’s cost side).

Interconnect expenses (including Rostelecom) increased by 7.9% and amounted to Rub 929.6 mln (11.6% of the company’s cost side).

Despite the influence of the financial and economic crisis and the accrual in the first six months of 2009 of Rub 1,391.4 mln as negative foreign exchange rate differences, the company reported a positive financial result amounting to Rub 517.8 mln.

EBITDA remained virtually unchanged and stood at Rub 3,869 mln, while EBITDA margin decreased by 1.8% to 36%.

As a result of headcount optimization compared with the first six months of 2008 the company achieved a 5.2% reduction in the number of its employees down to 25,214 and a 3.9% increase in the number of lines per employee to Rub 159.4 lines per employees.

Amid the financial downturn the company reduced the amount of its capital investments for the purpose of saving funds.  During the first six months of 2009 investments stood at Rub 241.8 mln, which is 82% less than in the first six months of 2008. The digitalization rate of UTK’s local voice network increased by 3.05% and stood at 72.4% as of July 1, 2009.