The first half results for 2005 show a positive outturn: key performance indices – revenue, EBITDA - and operating profitability have increased markedly over the results for the same period in 2004.

Commenting on the outturn, Ruben Amaryan, General Director of OJSC «CenterTelecom» said: “The main performance measures all demonstrate a solid performance for the first half of this year. All this is the inevitable result of our efforts aimed at improving efficiency and growing our income. «CenterTelecom» is successfully tracking the development trends shown right across the Russian telecommunication industry. Our challenge remains to improve our service offer and efficiency, strengthen our position in the traditional sectors, and to develop the new services our customers need”

 

CenterTelecom revenue in 1H 2005 amounted to RUR13.1bn, up 11% year-on-year.

International and long-distance communication traffic increased by 1.5 bn minutes (up 0.63%), but earnings from this business sector were down at RUR 4.5bn (a decrease of 4.3%). The decrease stems from tariff reductions introduced on October 1, 2004.

Income from urban and rural telecommunication services increased to RUR 6.0 bn (up 24.7%), driven both by increased traffic and tariffs. As a result, local communication services now represent 46% of total revenue.

Profits from new communication services increased 46%, with profits from telecommunication operators up 12%.

 

Costs increased by 5.0%, at RUR 10.1bn. Depreciation of RUR 1.7bn (up 37%), was a significant factor, resulting from the introduction of new equipment under the company’s planned investment program.

At the same time, social insurance costs decreased by 22% to 823 mln RUR. The fall, both in absolute and relative terms, follows the decrease in the applicable rate from 35.6% to 26%.

 

Operating profit for the period increased to RUR 3.0 bn, up 37%.

Net profit amounted to 387.3 mln RUR, against a net loss of 3.4 mln RUR for the same period in 2004. This improvement follows the management’s focus on improving business efficiency, and the strengthening of controls over expenditure.

 

 

	1H 2005	1H 2004	Change %
Revenue	13 089	11 803	10.90%
Costs	10 117	9 634	5.01%
Depreciation	1 657	1 212	36.64%
EBITDA	3 533	2 218	59.3%
EBITDA margin	34.9%	23.0%
Operating profit	2 973	2 169	37.06%
Operating margin	29.4%	22.5%
Profit before tax	696	189	267.9%
Pre-tax margin	6.9%	2.0%
Net profit	387	(3.4)
Net margin	3.8%	-0.035%

 

The Balance sheet and P&L Statement of OJSC «CenterTelecom» for H1 2005 are available on the corporate web-site in the ‘Financial Statements’ section.