• Audited 2007 full year revenue increased by 4.3% to RUB 62,588.2 million;
• Domestic long-distance traffic rose 4.7% year on year. Outgoing international traffic decreased by 5.8 % and incoming international traffic increased 24.4%1;
• EBITDA2 increased  by 8.3% to RUB 11,957.2 million, representing an EBITDA margin of 19.1%; 
• Net profit for 2007 amounted to RUB 9,423.9 million, representing a year-on-year increase of 31.2%.

Moscow – April 3, 2007 – Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia’s national long-distance telecommunications operator, today announced its audited full year 2007 results  in accordance with Russian accounting standards (RAS).

Rostelecom’s General Director Konstantin Solodukhin commented, “Rostelecom’s performance in 2007 demonstrates the Company’s stable position in the traditional telecom segments while operating  in a new competitive environment following the liberalization of the long-distance market. The Company continues to reinforce its competitive position in the international operators and leased line markets while developing state of the art technological services. During 2008, our key priority is to substantially increase Rostelecom’s presence in the new service markets, while continuing to maintain its position in the traditional telecom segments.”

Rostelecom’s revenues for 2007 totaled RUB 62,588.2 million - a year-on-year increase of 4.3%. 

Domestic long-distance (DLD) traffic grew by 4.7% to 10,174.8 million minutes. 2007 full year DLD revenues increased by 0.7% and totaled RUB 32,045.0 million.

Outgoing international long-distance (ILD) traffic decreased by 5.8% to 1,820.1 million minutes. ILD revenues from Russian operators and subscribers amounted to RUB 12,325.7 million, down 6.8% year on year.

2007 incoming ILD traffic totaled 3,062.2 million minutes which represents a year-on-year increase of 24.4%. Rostelecom increased its share of incoming international traffic, as the Company continued to leverage its strong market position. Revenues from international operators for incoming ILD traffic transit and termination rose 29.2% year on year to RUB 5,714.8 million.

Revenue from other business segments increased by 18.5% compared to 2006 to RUB 12,502.7 million, reflecting the growth of value-added and new products and services. Rostelecom delivered increases in revenues from leased lines, intelligent network services, data transmission and telematic services as well as customer equipment servicing among others. 2007 revenues from leased line services grew 8.9% year on year to RUB 7,751.8 million. Revenues from data transmission and telematic services saw a substantial increase of 4.7 times in 2007 compared to 2006 , amounting to RUB 975.2 million, while revenues from intelligent network services rose to RUB 1,072.5 million representing a year-on-year increase of 41.0%. 

Rostelecom’s operating expenses for the accounting period amounted to RUB 54,511.0 million – a year-on-year increase of 4.3%.

1 All traffic data provided in the press release is preliminary. This press release contains domestic long-distance traffic data for 2006 as disclosed in the Rostelecom FY 2007 IFRS results press release dated July 19, 2007.
2 EBITDA is calculated as total revenues less operating expense excluding depreciation.
Depreciation for the full year 2007 amounted to RUB 3,880.0 million. The 19.1% increase over the previous year is a result of continued additions of property, plants and equipment in 2006.

Thus, EBITDA for 2007 grew by 8.3% year on year to RUB 11,957.2 million, representing an EBITDA margin of 19.1%.

2007 full year operating profit amounted to RUB 8,077.2 million, up 3.7% compared to 2006.

Other gains and losses for 2007 totaled RUB 4,517.0 million compared to RUB 2,108.8 million a year ago, with the increase mainly driven by a revaluation of the Company’s financial investments. Rostelecom recorded a RUB 5,561.3 million net revaluation gain in 2007 compared to a RUB 2,376.8 million net revaluation gain for the previous year.

Rostelecom’s 2007 full year net profit rose 31.2% and totaled RUB 9,423.9 million.