OREANDA-NEWS. June 28, 2010. The consolidated financial statements include 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 (mln rubles):

 

2009

2008

Change, %

Revenues

38,036

37,509

1.4%

OIBDA[1][1]

14,356

13,132

9.3%

OIBDA margin

37.7%

35.0%

 

EBITDA[2][2]

14,069

11,906

18.2 %

EBITDA margin

37.0 %

31.7 %

 

Net Debt[3][3]

18,078

22,913

(21.1 %)

Net Debt/ EBITDA

1.28

1.92

 

Operating expenses[4][4]

(33,256)

(32,875)

1.2%

Operation profit

6,136

5,775

6.3%

Margin of profit from operating activities

16.1%

15.4%

 

Profit before income tax

2,863

2,434

17.6%

Profit for the reporting period

1,974

1,529

29.1%

Profit margin for the reporting period

5.2%

4.1%

 

Company Revenues

-  The consolidated revenues of the Company in 2009 increased by 527 mln rubles or by 1.4% as compared with 2008 and amounted to 38,036 mln rubles.

In the structure of consolidated revenues of the Company, the main components are proceeds from provided services of local telephone connection (11,731 mln rubles) and services of cellular communication (9,657 mln rubles) or 30.8% and 25.4%, respectively. Significant items in the revenue structure are proceeds from provided services of data transmission network and telematic services (Internet) (5,632 mln rubles) or 14.8 and 13.0%, respectively. Proceeds from the connection and traffic transmission services made up 9.6% (3,655 mln rubles) of the consolidated revenues.

The main source of the Company revenue growth during the reporting period was the development of broad-band access: growth of the number of subscribers to Internet access.

As compared with 2008, in 2009:

-    The biggest growth of proceeds was from providing services of data transmission network and telematic services (Internet): 1,231 mln rubles or 28.0%. The main factor was the growth of the base of subscribers to broad-band and, respectively, growth of proceeds from dedicated access to Internet. In 2009 the number of subscribers to broad-band access increased 1.45 times and amounted to 594 thousand users at the end of the reporting period;

-    The growth of proceeds from services of cellular communication amounted to 299 mln rubles or 2.6%, which resulted mainly from indexation of regulated tariffs from March 01, 2009;

-    The growth of rental income amounted to 166.0 mln rubles or 29.5%, which is connected with the increased number of leased objects;

-    Proceeds from intra-zone telephone services decreased by 455 mln rubles or by 8.5%, which is connected with a decrease of the traffic from fixed-line subscribers to both networks of fixed and of cellular operators;

-    Proceeds from services of connection and traffic transmission decreased by 451 mln rubles or 11.0%, which was a result of decreased volumes of the transmitted traffic, as well as of cancellation of connection point rating from March 01, 2008.

The structure of Company’s revenues from sales (mln rubles):

Type of revenues

2009

2008

Change

mln rubles

%

Services of intra-zone telephony services, including:       

4,928

5,383

(455)

(8.5)

        universal communication services

1

1

0

0.0

Local telephony services      

11,731

11,432

299

2.6

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

 

 

 

 

including:

5,864

4,654

1,210

26.0

         services of the data transmission network and telematic

         services (Internet)

5,632

4,401

1,231

28.0

Services of mobile communication services

9,657

9,786

(129)

(1.3)

Connection and traffic transmission services

3,655

4,106

(451)

(11.0)

Fees for assistance services and agency fees

502

609

(107)

(17.6)

Services of mobile radio, wired radio, radio broadcasting, television

403

426

(23)

(5.4)

Other services (principal types of activity)

6

10

(4)

(40.0)

Proceeds from other sales, including:

1,290

1,103

187

17.0

          Proceeds from assets leasing

729

563

166

29.5

          Proceeds from investment property leasing

3

5

(2)

(40.0)

Total

38,036

37,509

527

1.4

Company expenses

-  In 2009 the consolidated expenses of the Company increased by 381 mln rubles or by 1.2% as compared with 2008 and amounted to 33,256 mln rubles.

In the total amount of expenses, the greatest share is personnel expenses (29.7%), depreciation and amortization (24.7%), and other operational expenses (22.7%),.

As compared with 2008, in 2009:

-    Other operational expenses grew by 863 mln rubles or by 11.7% which was connected with the implementation of the investment program of the Company aimed at network development;

-    Expenses of communication operators grew by 190 mln rubles or by 4.3%, which was a result of the growth of traffic to be paid subject to the procedure of inter-operator relations in accordance with the regulatory and legal basis in the branch;

-    Other operating expenses grew by 168 mln rubles or by 2.3%, which resulted from the growth of commercial expenses, expenses connected with providing universal communication services and with the formation of the bad debt reserve due to the growth of overdue receivables;

-    Personnel expenses reduced by 620 mln rubles or by 5.9% due to some measures taken to optimize the number of employees.

-    Expenses of materials, repair and servicing, communal public utilities decreased by 219 mln rubles or by 6.8%, which was connected with realization of some measures to decrease expenses.

The structure of Company expenses (mln rubles):

Type of expenses

2009

2008

Change

mln rubles

%

Personnel expenses

(9,883)

(10,504)

621

(5.9)

Depreciation and amortization

(8,220)

(7,357)

(863)

(11.7)

Materials, repair and maintenance, utilities

(2,998)

(3,217)

219

(6.8)

Communication operator charges

(4,590)

(4,400)

(190)

(4.3)

Other operating expenses

(7,565)

(7,397)

(168)

(2.3)

Total

(33,256)

(32,875)

(381)

(1.2)

Capital expenses of the Company

-  The amount of capital expenses of the Company in 2009 was 4,811 mln rubles, which is less than the level of 2008 by 61.7%. The main part of capital investments is used for the development of local telephony facilities, of the data transmission network and of communication infrastructure objects. The level of investments in the development of services of mobile radiotelephony (cellular communication) made up 36.3% of the total capital investments in 2009.

Financial results of the Company

As compared with 2008, in 2009:

-  The OIBDA index grew by 1,224 mln rubles or by 9.3%. The OIBDA margin is 37.7%.

-  The operating profit increased by 361 mln rubles or by 6.3% and amounted to 6,136 mln rubles, which was caused by a higher-than-anticipated growth of expenses (1.4%) as compared with the growth of expenses (1.2%).

The operating profit includes other operating expenses in the amount of 1,356 mln rubles, including reimbursement of loss from providing universal communication services in the amount of 893 mln rubles.

The margin of operating profit is 16.1%.

-  The profit before income tax increased by 429 mln rubles or by 17.6% and amounted to 2,863 mln rubles, which was mainly a result of the dynamics of the operating profit.

-  The profit for the reporting period amounted to 1,974 mln rubles having increased by 29.1% as compared with 2008. It was a result of an increase in the income before tax. The income margin for the reporting period if 5.2%.