OREANDA-NEWS. April 7, 2011. OJSC Far East Telecom, telecommunications operator in the Far East Federal Territory announces audited consolidated financial results for 12 months 2010 according to IFRS[1].

FINANCIAL HIGHLIGHTS

RUR mln.

2010

2009

Changes, %

Revenues

18,274

17,197

6%

OIBDA[2]

6,132

6,164

(1%)

% of revenues

33.6%

35.8%

 

Operating profit

3,771

3,803

(1%)

% of revenues

20.6%

22.1%

 

Net profit

2,470

2,518

(2%)

% of revenues

13.5%

14.6%

 

Net Debt[3]

6, 614

5,938

0,3%

Net Debt/OIBDA

1,08

0,96

 

Capital investment

3,020

3,520

(14%)

% of revenues

16.5%

20.5%

 

OIBDA margin decreased year on year due to the increase in operating expenses, including the write - off of expenses related to the introduction of Amdocs billing system

COMPANY REVENUES

RUR mln

2010

2009

Changes, %

Local telephone communication services

6,737

6,385

6%

Telegraph communication, data transmission and telematic services (Internet)

5,749

4,835

19%

Intrazone telephone communication services

2,302

2,477

(7%)

Mobile radiotelephone communication (cellular) services

1,185

1,101

8%

Traffic interconnection services

1,082

1,401

(23%)

Support and agency services

200

283

(29%)

Mobile radio communication, wire communication services, broadcasting, television services

167

161

4%

Other communication services (basic activities)

46

46

0.0%

Revenues from other sales

806

508

59%

Total

18,274

17,197

6%

Broadband Internet access subscriber base of OJSC Far East Telecom increased by 15% up to 517.5 thousand persons.

OPERATING EXPENSES LESS DEPRECIATION AND AMORTIZATION

RUR mln.

2010

2009

Changes, %

Personnel expenses

(5,377)

(4,971)

8%

Materials, repairs and maintenance, utilities

(1,854)

(1,736)

7%

Expenses on telecommunications operator services

(2,121)

(2,108)

1%

Other operating expenses

(2,790)

(2,218)

26%

Total

(12,142)

(11,033)

10%

Accounting statements of OJSC Far East Telecom for 2010 prepared in accordance with RAS are available on the Company web-site.

Appendixes:

1. Summary Consolidated Statements of Comprehensive Income

2. Summary Consolidated Statements of Cash Flows

3. Summary Consolidated Statements of Financial Position

Appendix 1

Consolidated Statements of Comprehensive Income

 

2010

2009

Revenues

18,274

17,197

Personnel expenses

(5,377)

(4,971)

Depreciation and amortization

(2,361)

(2,361)

Expenses on telecommunications operator services

(2,121)

(2,108)

Materials, repairs and maintenance, utilities

(1,854)

(1,736)

Other operating earnings

313

395

Other operating expenses

(3,103)

(2,613)

Profit from operating activities

3,771

3,803

Profit from associated companies

5

6

Financial expenses

(611)

(576)

Other earnings and expenses from financial and investment activities

76

(14)

Exchange loss

(1)

(6)

Earnings before tax

3,240

3,213

Profit tax

(770)

(695)

Profit for the report period

2,470

2,518

Other consolidated profit

 

 

Change in fair value of available-for-sale financial assets

118

7

Profit tax for other consolidated profit

(23)

(1)

Total other consolidated profit less profit tax

95

6

Total annual consolidated profit

2,565

2,524

 

 

 

Profit in the report period related to:

 

 

Shareholders of Open Joint Stock Company Far East Telecom

2,463

2,152

Non-controlling shareholders of subsidiaries

7

366

Total annual profit

2,470

2,518

Total consolidated annual profit related to:

 

 

Shareholders of Open Joint Stock Company Far East Telecom

2,558

2,158

Non-controlling shareholders of subsidiaries

7

366

Totalconsolidated annualprofit

2,565

2,524

Appendix 2

Consolidated Statements of Cash Flows

 

 

 

2010

2009

Operating activities

 

 

Profit before tax

3,240

3,213

Adjustments

 

 

Depreciation and amortization

2,361

2,361

Loss / (profit) oT from fixed and other assets retirement

147

58

Expenses on provisions for doubtful debts

102

100

Expenses on provision for HMA

120

-

Profit from associated companies

(5)

(6)

Expenses on interest

611

571

Other earnings and expenses from financial and investment activities

(76)

14

Credit debts charge-off

(22)

(34)

Contingent liability reserve recovery

(10)

(21)

Exchange loss

1

6

Operating profit adjusted for non-monetary transactions

6,469

6,262

Increase in inventory holdings

 

 

Increase in trade debt and other receivables

(44)

(94)

Reduction of other assets

(317)

(77)

Reduction of pension and long-term social security liabilities

-

7

Increase in payables and accrued liabilities

(309)

(189)

Reduction of reserves

111

163

Increase in other operating assets and liabilities

179

(25)

Cash received from operating activities

6,089

6,047

Interest expenses

(691)

(478)

Profit tax expenses

(624)

(690)

Cash received from operating activities

4,774

4,879

Investment activities

 

 

Acquisition of fixed assets, assets under construction and investment property

(3,048)

(3,319)

Sales of fixed assets, assets under construction and investment property

79

115

Acquisition of intangible assets

(229)

(547)

Acquisition of subsidiaries less cash received and share of non-controlling shareholders

-

(1,361)

Acquisition of financial assets

(1,007)

(155)

Financial assets sales

245

151

Interest received

75

26

Dividends received

2

3

Cash used in investment activities

(3,883)

(5,087)

Financial activities

 

 

Purchase of own stock

(845)

(1)

Attraction of bank credits and institution loans

9,811

6,416

Repayment of bank credits and institution loans

(8,299)

(6,513)

Attraction of bonded loans

-

1,500

Repayment of bonded loans

(688)

(750)

Repayment of commercial loans

-

(1)

Payment of financial lease liabilities

(30)

(196)

Attraction of other long-term liabilities

(768)

(463)

Dividends paid to shareholders

(819)

(8)

Cash used in financial activities

(845)

(1)

Net (reduction) / increase of cash and cash equivalents

72

(216)

Cash and cash equivalents as of the beginning of the year

338

554

Cash and cash equivalents as of the end of the year

410

338

Appendix 3

Consolidated Statements of Financial Position

 

December,31st,

2010

December,31st,

2009

ASSETS

 

 

Capital assets

 

 

Fixed assets

16,069

15,397

Intangible assets and goodwill

2,853

3,119

Long-term sundry assets

306

252

Investment property

81

74

Investments into associated companies

79

76

Long-term financial assets

676

18

Total capital assets

20,064

18,936

Current assets

 

 

Inventories

629

585

Trade and other receivables

1,773

1,490

Prepaid tax profit

88

128

Current sundry assets

347

297

Short-term financial assets

2

158

Cash and cash equivalents

410

338

 

3,249

2,996

Assets for sale

1

42

Total current assets

3,250

3,038

Total assets

23,314

21,974

CAPITAL AND LIABILITIES

 

 

Capital of Shareholders of Open Joint Stock Company Far East Telecom

 

 

Authorized capital

4,366

4,366

Treasury stock

(845)

(1)

Other reserves

(226)

6

Retained profit

8,553

6,814

Total capital of Shareholders of Open Joint Stock Company Far East Telecom

11,848

11,185

Share of non-controlling shareholders

46

39

Total capital

10,894

11,224

Long-term liabilities

 

 

Loan liabilities

4,689

3,260

Pension and long-term social security liabilities

629

898

Long-term sundry liabilities

58

70

Deferred profit tax payable

733

712

Total long-term liabilities

6,109

4,940

Current liabilities

 

 

Loan liabilities

2,336

3,016

Payables and accrued liabilities

2,540

2,311

Current profit tax payable

27

-

Current sundry liabilities

370

396

Current reserves

38

87

Total current liabilities

5,311

5,810

Total liabilities

11,420

10,750

Total capital and liabilites

23,314

21,974

[1] International Financial Reporting Standards. Consolidated financial statements include asset, liabilities and results of financial activity of OJSC Far East Telecom and its affiliates (hereinafter the Company).

[2] OIBDA is calculated on the formula: “Profit from operating activities” plus ” Depreciation and amortization”.

[3] Net Debt is calculated on the formula: "Long-term loan obligations” plus ”Current loan obligations” - "Cash and cash equivalents” - debenture notes and bonds available for sale.