OREANDA-NEWS. April 12, 2010. North-West Telecom announced its financial and economic performance results for 2009 under the Russian Accounting Standards. The Company’s reports were audited by PricewaterhouseCoopers Audit CJSC.

According to the 2009 results, the Company’s revenue grew up 7% as against the past year to RUR 26,295 million.

The main drivers for the rise in revenue from communications services were new services (Internet and data transmission), intra-zonal and local access. As compared with 2008, the incomes from Internet access and data transmission services rose 22% to RUR 5,062 million, while the incomes from intra-zonal and local access rose 7% and 4% to RUR 2,594 million rubles and RUR 13,358 million respectively.

The operating income amounted to RUR 2,308 million, which is 41% less than in 2008. This income reduction is attributable to the existing accounting methodology for expenses relating to the state program for the multifunctional communications service. North-West Telecom refers relevant expenses to the operating expenses and the compensation for these expenses from the Multifunctional Service Reserve to other incomes. Taking into account the compensation from the Multifunctional Service Reserve, NWT’s operating income rose 5% as against the past year and reached RUR 6,591 million.

In 2009, NWT’s efficiency ratios developed positively on the year-to-year basis, with the EBITDA rising 12% to RUR 10,818 million and the EBITDA margin rising 1.8 p.p. to 41%.

NWT’s net income for 2009 fell 4%* as against 2008 to RUR 3,473 million. At the same time, the organic growth for the 2009 net income reached 26.3% (with the 2008 net income calculated without taking account of the one-time asset sale and revaluation transactions such as sale of a 25% stake in Medexpress CJSC and revaluation of the contribution to the authorized capital of SvyaZisT Recreational and Prophylactic Complex CJSC).

In 2009, NWT reduced its investment program considerably to RUR 7.0 billion rubles (including RUR 2.2 billion in non-cash investments*), giving preference to projects with a payback period up to 5 years, such as expansion of the broadband network and construction of fiber optical lines in the North-West Federal District. In 2009, the Company commissioned as many as 88.9 thousand telephone numbers, 269.6 thousand xDSL ports, 69.4 thousand PON ports, 2,976 km of fiber optical lines, raising the network digitalization rate to 68%.

In 2009, NWT continued its expansion on the broadband market. A proactive marketing policy, a wider range of services and more attractive pricing plans enabled the Company to increase the number of broadband users to 894 thousand and its market share (in terms of revenue) to 47%.

The Company keeps its debt on a comfortably moderate level. The total debt at the end of 2009 is equal to 16,765 million rubles (with long-term debts accounting for 48%), the equity ratio is 0.60, and the net debt to EBITDA ratio is 1.52.

Commenting on the 2009 results, NWT Chief Executive officer Vladimir Akulich noted: “Despite a rather difficult year for the national economy, North-West Telecom succeeded in reaching all budget targets, consolidating significantly its market positions in the broadband segment and raising its business efficiency to the level of similar European companies”.


* Cost of the PTT CJSC equipment put on the NWT balance sheet after the scheduled PTT CJSC liquidation.


For NWT’s 2009 balance sheet, profit and losses report and auditor report, please visit NWT’s corporate web-site, Economics and Finance section.

EBITDA is calculated according to the following formula: “before-tax profit (loss)” + “interest payable” – “interest receivable” + “depreciation and amortization of fixed assets” + “leasing expenses”.