Rostelecom Generates 1H 2010 Net Profit of RUR 2.23 bln

OREANDA-NEWS. August 18, 2010. Rostelecom hereby announces its unaudited results for the first six months of 2010, in accordance with Russian Accounting Standards (RAS).

Rostelecom’s H1 2010 revenue amounted to RUR 28,467.7 mln, i.e. a 6.8% y-o-y decrease, which was mainly attributable to a decline in revenue from a number of traditional segments.

However, as a result of ongoing business diversification, Rostelecom managed to lift its revenues from high-tech value-added services, and accordingly, their proportion in total revenue compared to the same period last year. During the reporting period, datacom and intelligent network services (INS) amounted to 15.1% of Rostelecom’s total revenue while revenue from data transmission and telematic services (mainly Internet and VPN services) increased by 46.3% y-o-y, amounting to RUR 3,715.1 mn. It is noteworthy that revenue from VPN services amounted to RUR 1,275.1 mln, which implies a rise of 176% in y-o-y terms. INS revenue rose 11.1% y-o-y to RUR 580.4 mln.    

Rostelecom’s operating expenses for the reporting period totaled RUR 25,258.3 mln, a 6.4% y-o-y decrease, which was mainly due to a reduction in direct costs.

Consequently, Operating Income before Depreciation and Amortization (OIBDA) remained relatively stable compared to the same period last year, amounting to RUR 5,789.7 mln, i.e. a 0.2% y-o-y increase.

The Company’s OIBDA margin was 20.3% compared to 18.9% in the first half of 2009.

Depreciation in the first half of 2010 increased 16.9% y-o-y to RUR 2,580.3 mln, owing to a higher level of investment in the expansion of the Company’s IP/MPLS network.

In the first half of 2010, operating profit decreased by 10.1% y-o-y to RUR 3,209.4 mln.

Other gains and losses for the first half of 2010 amounted to a net loss of RUR 342.5 mln compared to a net loss of RUR 575.8 mln a year ago. This decrease in overall net loss was mainly attributable to a foreign exchange loss.  

Rostelecom’s H1 2010 net profit amounted to RUR 2,233.9 mln, which implies a 5.5% decrease y-o-y.