North-West Telecom has reported its Q1 2010 financial and business results in accordance with the International Financial Reporting Standards (IFRS). The interim consolidated financial reports are unaudited.

In accordance with the IFRS, the Q1 2010 revenue grew up 7.4% on a year-to-year basis and reached RUR 7,017 million. At the same time, expenses were 2.1% lower than in Q1 2009, amounting to RUR 5,878 million.

The Q1 2010 operating income amounted to RUR 1,973 million, 51.2% up on a year-to-year basis. The significant rise in the operating income is due to the successful implementation of N.W. Telecom’s marketing strategy and cost saving policy.

Thus, in Q1 2010 the Company’s revenue growth outpaced operating expenses once again.

Revenue from data transmission and Internet access services had the highest growth rate. In Q1 2010, they reached RUR 1,481 million, 18% up compared to Q1 2009. So impressive dynamic is due to the active expansion of North-West Telecom on the high competitive broadband access market in the North-West Federal District.

Individual clients account for more than 55% of the Company’s aggregate incomes.

The Q1 2010 EBITDA amounted to RUR 3,744 million, 88.9% up on a year-to-year basis. The EBITDA margin rose 23 p.p. to 53.3%, evidencing the business efficiency of the leading telecommunication companies.

North-West Telecom’s Q1 2010 net income under the IFRS amounted to RUR 1,452 million against a loss of RUR 143 million on a year-to-year basis. Such a considerable growth of the net income is due to the low 1Q 2009 base as the result of significant losses associated with the re-valuation of FX liabilities.

*EBITDA is calculated according to the following formula: “Earnings (losses) from continuing activity for the accounting period” + “depreciation and amortization” + “financial expenses” – “interest incomes on financial assets” – “interest incomes on pension plan assets”.