Rostelcom Announced 1Q Unaudited Consolidated Financial Results
OREANDA-NEWS. July 01, 2010. Rostelecom (RTS, MICEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, announces its unaudited consolidated financial results for the first quarter of
Cоnsolidated revenue for the first quarter of 2010 amounted to RUR 14.9 bn;
OIBDA* amounted to RUR 2.7 bln, which implies am 18.3% OIBDA margin;
Net profit amounted to RUR 0.6 bln;
Revenues from new high-tech services increased to RUR 2.8 bn and accounted for a larger proportion of the Company’s consolidated revenue (18.4%).
For the first quarter of 2010, Rostelecom and its subsidiaries, (hereinafter, “the Company”), delivered the following financial results:
|
RUR, mln |
3M 2010 |
3M 2009 |
Change, % |
|
Revenue |
14,937.0 |
16,374.0 |
-8.8% |
|
Operating expenses |
14,100.0 |
15,477.0 |
-8.9% |
|
OIBDA |
2,732.0 |
2,811.0 |
-2.8% |
|
OIBDA margin, % |
18.3% |
17.2% |
N/A |
|
Operating profit |
837.0 |
897.0 |
-6.7% |
|
Operating margin, % |
5.6% |
5.5% |
N/A |
|
Net profit |
579.0 |
849.0 |
-31.8% |
|
Net margin, % |
3.9% |
5.2% |
N/A |
|
Aggregate revenue, total |
587.0 |
846.0 |
-30.6% |
The Company's consolidated revenue for the first quarter of 2010 amounted to RUR 14,937.0 mn, a decrease of 8.8% year-on-year, which was largely due to a reduction in revenues from traditional long-distance services.
However, owing to continued business diversification, the Company managed to increase its overall revenues from new high-tech services such as Internet access for both operators and corporate clients, VPN, data center and intelligent network services, which rose to 18.4% of the Company’s consolidated revenue.
Datacom as a standalone, including Internet access services for operators and corporate clients, as well as VPN,
The Company’s positions in the traditional voice telecom segments during the first quarter of 2010 can be summed up as follows:
Domestic long-distance (DLD) revenues fell by 11.7% to RUR 6,039.0 mln. Revenue from international long-distance (ILD) services to Russian end-customers and operators amounted to RUR 2,387.0 mln, a 10.8% decrease year-on-year.
The decline in DLD and OILD revenues is primarily attributable to the continued migration of long-distance end-customer traffic from fixed-line to mobile networks as well as a lower volume of traffic from the Big Three mobile operators through Rostelecom’s network, as they are nearing completion of the construction of their own long-distance networks.
Total revenues from international operators for incoming ILD telephone traffic transit and termination dropped by 23.3% year-on-year to RUR 1,308.0 mln. This was mainly due to the decrease in incoming ILD traffic that was terminated in
Revenues from leased-line services fell by 20.3% year-on-year to RUR 1,472.0 mln. This fall was mainly attributable to the fact that Russian mobile operators are coming close to completing the construction of their own networks, thus reducing their demand for channels. In addition, this has given these operators the opportunity to provide channels for rent, thus resulting in increased competition in the Russian leased line market.
Revenues from leased-line services fell by 20.3% year-on-year to RUR 1,472.0 mln. This decline was mainly attributable to the fact that Russian mobile operators are about to complete the construction of their own networks, thus reducing their demand for channels. In addition, this gave these operators the opportunity to provide channels for rent, which resulted in stronger competition on the Russian leased line market.
Operating expenses
The Company’s total operating expenses in the first quarter of 2010 contracted 8.9% year-on-year to RUR 14,100.0 mln. This decrease was mainly attributable to a reduction in direct costs, specifically lower payments made to both Russian and international operators.
In the first quarter of 2010 there was also a decrease in staff costs – in particular, as a result of a 6% headcount reduction at Rostelecom and its subsidiaries compared to the same period last year. As of March 31, 2010 the Company’s headcount stood at 20,953 employees compared to 22,300 employees at March 31, 2009.
OIBDA, Operating Profit
In the first quarter of 2010, OIBDA dropped by 2.8% year-on-year to RUR 2,732.0 mn, while the OIBDA margin increased to 18.3% compared to 17.2% for the same period last year. This increase reflects the increased share in the Company’s consolidated revenue from new high-tech and high-margin services.
Depreciation charges for the first quarter of 2010 amounted to RUR 1,887.0 mln, which implies a 1.2% year-on-year decrease.
The Company’s first quarter 2010 operating profit fell by 6.7% year-on-year to RUR 837.0 mln, with a 5.6% operating margin.
Other income/loss, Profit before income tax
Other loss (net) for the first quarter of 2010 amounted to RUR 115.0 mln compared to other income (net) of RUR 354.0 mln in the same period a year ago (see Appendix I). This difference is mainly due to a significant foreign exchange loss over the accounting period.
The Company’s profit before income tax for the first quarter of 2010 thus amounted to RUR 734.0 mln, compared to RUR 1,268.0 mln in the first quarter of 2009.
Net profit
The Company’s first quarter 2010 consolidated net profit decreased by 31.8% compared to the same period in 2009 and amounted to RUR 579.0 mln, with net margin amounting to 3.9%.
Consolidation
Consolidated numbers for the first quarter of 2010 include the results of the operations of Rostelecom and its subsidiaries: GlobalTel, Globus-Telecom, Zebra Telecom, MTs NTT, RTComm.ru and its subsidiaries and Vestelcom, among others.
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