OREANDA-NEWS. September 7, 2010. The unaudited consolidated interim financial statements include assets, liabilities and results of activity of Sibirtelecom OJSC and its subsidiary companies (hereinafter referred to as “the Company”). The primary activity of subsidiaries is provision of mobile (cellular) communication and other telecommunication services.

Key financial indices according to the IFRS (mln. rubles):

 

Over the period of 6 months, ended June 30,2010

Change,

%

        2010

         2009

Revenue from sales

19, 465

19, 015

2.4

OIBDA

8, 167

7, 407

10.3

OIBDA margin

42.0%

39.0%

 

EBITDA

8, 152

6, 981

16.8

EBITDA margin

41.9 %

36.7 %

 

Net Debt

16, 038

21, 183

(24.3)

Operating expenses

(15, 921)

(16, 318)

(2.4)

Operating profit

4, 320

3, 335

29.5

Operating profit margin

22.2%

17.5%

 

Profit before tax 

3, 150

1, 276

146.9

Profit for the reporting period

2, 444

851

187.2

Margin of profit for the reporting period

12.6%

4.5%

 

 

 

 

 

 

 

The Company’s revenues from sales 

The Company’s consolidated revenue from sales over the period of 6 months ended June 30, 2010 made up 19,465 mln. rubles, having increased by 450 mln. rubles, or by 2.4% in comparison with the similar period of 2009.

In the structure of the Company’s consolidated revenue the main components are  income from provision of local telephony services (6,251 mln. rubles) and mobile radiotelephony (cellular) communication (4,843 mln. rubles). Important items in the structure of revenue are income from services of data transfer network and telematic services (Internet) (3,270 mln. rubles) and from provision of intrazone telephony communication services (2,223 mln. rubles), or 16.8% and 11.4% respectively. Income obtained from the services of interconnection and traffic transmission amounted to 9.0% (1,743 mln. rubles) from consolidated revenue.

The basic factor of the Company’s revenue growth in the reporting period was the development of broad-band access services: the growing number of users of Internet access.

As compared with the same period of 2009, over the period of 6 months ended June 30, 2010:

-         the greatest increase in revenues was obtained from providing services of data transmission network and telematic services (Internet) – 536 mln. rubles, or 19.6%. The main factors are the growing number of users of broad-band access (BBA) services and therefore the growth of income from providing detached access to the Internet. As of July 1, 2010 the number of BBA subscribers was 692.5 thousand users;

-         increase in revenues from rendering local telephony services amounted to 397 mln. rubles, or 6.8%, which is attributed to the aggregate effect of adjustment of fixed tariffs from February 1, 2010;

-         decrease in revenues from providing intrazone telephony services amounted to 275 mln. rubles, or 11.0%, which is connected with reduction of traffic from fixed subscribers both to networks of landline and cellular operators and decrease of tariffs on intrazone connections with “long-range” tariff zones for some territories from January 30, 2010;

-         decrease in revenues from leasing of assets made up 192,0 mln. rubles, or 50.5%, due to reduction of the number of objects let on lease;

-         decrease in revenues from services of connection and traffic transmission amounted to 97 mln. rubles, or 5.3%, which was caused by reduction of transmitted traffic.

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

Revenue type

Over the period of 6 months, ended June 30,2010

Change

   2010

   2009

mln. rubles

%

Services of local telephone communication

6, 251

5, 854

397

6.8

Services of mobile radiotelephone (cellular) communication

4, 843

4, 837

6

0.1

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

3, 380

2, 855

525

18.4

including services of data transmission network and telematic services (Internet)

3, 270

2 ,734

536

19.6

Services of intrazone telephone communication

2, 223

2, 498

(275)

(11.0)

Services of connection and traffic transmission

1, 743

1, 840

(97)

(5.3)

Assistance and agency services

220

266

(46)

(17.3)

Services of mobile radio communication, wire broadcasting, television

116

217

(101)

(46.5)

Other services (primary types of activity)

1

3

(2)

(66.7)

Revenues from other sales

688

645

43

6.7

including revenues from leasing of assets

188

380

(192)

(50.5)

Total 

19, 465

19, 015

450

2.4

 

 

 

 

 

 

The Company’s expenses

-     The Company’s consolidated expenses over the period of 6 months ended June 30, 2010 reduced by 397 mln. rubles, or 2.4%, against the same period of 2009 and amounted to 15,921 mln. rubles.

Personnel expenses (30.4%), depreciation and amortization (24.2%) and other operating expenses (20.8%) form the biggest share of the total amount of expenses.

As compared with the same period of 2009, over the period of 6 months ended June 30, 2010:

-         expenses on materials, repair and maintenance, utilities increased by 240 mln. rubles, or 16.5%, due to adjustment of tariffs on electric and thermal energy and growth of cost of connection of subscribers;

-         reduction of personnel costs by 291 mln. rubles, or 5.7%, which is referred to current optimization of the headcount;

-         amount of the charged depreciation and amortization decreased by 225 mln. rubles, or 5.5%, due to growth of the share of completely depreciated fixed assets and suppression of the Company’s investment program in 2009;

-         decrease of expenses on telecoms operators’ services amounted to 101 mln. rubles, or 4.4%, due to reduction of initiated and landed traffic.

-         decrease of other operating expenses amounted to 20 mln. rubles, or 0.6%, which was mainly caused by optimization of business processes with third-party organizations and use of software products.

The Company’s expenses structure (mln. rubles):

Type of expenses

Over the period of 6 months, ended June 30,2010

               Change

2010

2009

mln. rubles

%

Personnel expenses

(4, 846)

(5, 137)

291

(5.7)

Depreciation and amortization 

(3, 847)

(4, 072)

225

(5.5)

Telecoms’ services

(2, 219)

(2, 320)

101

(4.4)

Materials, repair and maintenance, utilities

(1, 697)

(1, 457)

(240)

16.5

Other operating expenses

(3, 312)

(3, 332)

20

(0.6)

Total 

(15, 921)

(16, 318)

397

(2.4)

 

 

 

 

 

 

 

The Company’s capital expenditure

-     The Company’s capital costs over the period of 6 months ended June 30, 2010 amounted to 3,545 mln. rubles, having increased by 1,173 mln. rubles, or 49.5%, as compared with the same period of 2009. The investments in the development of mobile radiotelephone (cellular) communication services made up 23.8% of the total volume of the Company's capital costs.

The Company’s financial results

As compared with the same period of 2009, over the period of 6 months ended June 30, 2010:

-     The growth of OIBDA amounted to 760 mln. rubles, or 10.3%. OIBDA margin – 42.0%.

-     The operating profit increased by 985 mln. rubles, or 29.5%, and made up 4,320 mln. rubles, due to growing revenues (2.4%) and simultaneously decreasing costs (2.4%).

The structure of operating profit includes other operating income amounting to 776 mln. rubles, including compensation for losses from provision of universal communication services making up 600 mln. rubles.

The operating profit margin is 22.2%.

-     Profit before tax increased by 1,874 mln. rubles and reached 3,150 mln. rubles due to performance of operating profit, reduction of interest expenses, and positive behavior of profit from exchange difference during foreign currency valuation (by the results over the period of 6 months ended June 30, 2010, the balance of negative exchange difference amounted to 18 mln. rubles, whereas during the similar period of 2009 the balance of negative exchange difference amounted to 428 mln. rubles).

-     The profit for the reporting period increased by 1,593 mln. rubles and reached 2,444 mln. rubles, due to the growth of profit before tax. The margin of profit for the reporting period – 12.6%.