OREANDA-NEWS. November 15, 2012. Open Joint Stock Company “MegaFon” (“MegaFon”, or the “Company”), a Russian universal telecommunications operator, announces its consolidated financial results for the third quarter ended September 30, 2012.

Ivan Tavrin, Chief Executive Officer of MegaFon, commented on the financial and operational results:

“We are pleased to report our latest financial results today. We had excellent third quarter results and strong performance across all the areas of our business supported by solid sequential revenue growth, strong OIBDA gain with the highest margin in the last eight quarters, increased cash flow, and the highest ever quarterly net income in the history of the Company. In particular, we have grown our mobile data revenues by more than 30% compared to the third quarter of 2011, in line with our strategy of capturing the opportunity in this expanding market.

We achieved strong OIBDA margin by focusing on efficiency and productivity in our Company. This new approach was based on various cost optimizing initiatives directed at operating expenses. We also achieved a reduction in subscriber acquisition costs as a result of switching to revenue-share compensation schemes with dealers. We believe that we will continue to achieve savings in subscriber acquisition cost going forward as a result of this change. At the same time we have successfully implemented our plans to reduce our capital expenditures on the back of the significant investments we have made in previous years, reducing the amount by over 60% on a year-on-year basis.

Our acquisition of VAS Media in this quarter is expected to expand our capabilities in Value Added Services and enhance our strong position in this segment, providing our customers with new and innovative services in such areas as multimedia content and mobile payments.

We have shown by this quarter’s results that we can continue to achieve enhanced financial results, while remaining committed to intensifying our focus on improved operational efficiency, increasing our cash flows and expanding our margins. At the same time, excellent customer service remains central to the business of MegaFon”.

Key Consolidated Financial and Operational Results for the third quarter ended September 30, 2012

Consolidated revenue grew by 12.3% as compared to the third quarter of 2011 (y-o-y), to RUR 71,234 million.

OIBDA increased by 21.1% y-o-y, to RUR 32,138 million.

OIBDA margin was 45.1% versus 41.9% in the same quarter of last year.

Net income increased by 19.6% y-o-y, to RUR 14,926 million.

Net debt as of September 30, 2012 was RUR 139,887 million.

The number of active mobile subscribers as of September 30, 2012 was 64.8 million, an increase of 1.7% over the second quarter of 2012.