Krasnodar, March 31, 2005 – JSC “Southern Telecommunications Company” (UTK) (RTS: KUBN; OTC USA: STJSY), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, announced today the companys unaudited financial results for 2004 as calculated under Russian Accounting Standards (RAS).

In 2004, UTKs revenues rose 24% on the year to 16.753 billion rubles. Revenues from mobile communication services rose 23.3% on the year to 16.303 billion rubles.  

Revenues from new services were the fastest growing of all UTKs tariff-based revenues in 2004, increasing 79.5% on the year to 958 million rubles.

The companys production costs stood at 13.355 billion rubles in 2004, up 27.8% on the year. The increase in production costs was mainly caused by the following factors:

- Higher amortization costs (rising 56.3% on the year to 1.674 billion rubles, due to the launch of key operational facilities);   

- Higher costs for Rostelecom services (increasing 37.2% on the year to 2.043 billion rubles due to the introduction of a new system of mutual payments).   

In 2004, UTKs sales profit rose 11.3% on the year to 3.398 billion rubles. EBITDA rose 24.7% to 4.266 billion rubles. EBITDA margin stood at 25.5%, up 0.2 percentage points from 2003.

The companys net profit dropped 76.3% on the year to 255.7 million rubles in 2004, mainly due to higher interest payments on loans attracted on foreign markets to implement the companys investment program for 2003-2004.

More information about the companys unaudited RAS financial results for 2004 can be found on its website at www.stcompany.ru in the section "For Investors and Shareholders/Financial Reports".