OREANDA-NEWS. Southern Telecommunications Company [(RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the principal fixed-line telecommunications provider for Russia’s Southern Federal District, today reported its unaudited consolidated financial results for the first half of 2006 in accordance with International Financial Reporting Standards (IFRS).

The Company’s IFRS revenue for the first half of 2006 amounted to RUR 8,551 mln. The main revenue components were earnings from local voice (representing a 43.19%-increase to RUR 3,693 mln), revenues from national telecom operators (representing a 21.27%-increase to RUR 1,819 mln) and earnings from intra-zonal calls (representing a 11.4%-increase to RUR 974 mln). Revenues from new telecom services grew by 13.6% to RUR 709 mln.

1H 2006 net income in accordance with IFRS amounted to RUR 333 million. Last year the Company reported the net loss of RUR 387 million in its statutory financial statements for the first half of 2005.

Interest expenses amounted to RUR 924 million in the reporting period versus RUR 1,516 mln during the first six months of 2005. 1H2006 EBITDA increased 20.91% year on year to RUR 2,966 million representing an EBITDA margin of 34.68 % (vs. 27.32% for the first six months of 2005).