OREANDA-NEWS. September 12, 2007. OJSC CenterTelecom (RTS: ESMO, ESMOP; MICEX: CTLK, CTLKP; U.S. OTC: CRMUY), the leading provider of fixed-line telecommunications services in the Central Federal District of Russia, has issued its unaudited results of financial and economic activities for 1H 2007 compiled in accordance with International Financial Reporting Standards (IFRS).

Characteristics of operational efficiency
The number of telecommunication lines per employee rose by 19.81%  to 127 lines (106 in 1H 2006).
Revenue per line rose by 15.58% from RUR 2,104.4 in 1H 2006 to RUR 2,432.3 in 1H 2007.
Revenue per employee reached RUR 308.4 thousands in 1H 2007, 37.93 % more than in 1H 2006 (RUR 223.6 thousands).
Personnel numbers were reduced by 14.45% and reached 52,730 employees (61,633 in 1H 2006).
Profitability calculated from net profit reached 7.92% (1.47% in 1H 2006). 

In IH 2007 CenterTelecom’s revenues grew by 17.76% in comparison with IH 2006. Revenue growth was provided by:

•  the dynamic growth of the subscriber base of the broadband Internet connection access services under the DOMOLINK brand by 62.57% up to 187,036 subscribers (115,052 subscribers as of December 31, 2006). The income share from Internet access services rose to 7.59% (5.63% - in 1H 2006);

•  the implementation of the "calling party pays" rule since July 1, 2006, that contributed to growth of income from inter-zone communications by 106.30% to RUR 2,823 million. (RUR 1,368 million in 1H 2006);

•  the increase of number of fixed line communication services’ subscribers by 1.73% to 6,579,317 for 1H 2007. 

Operating expenditures grew by 13.92% to RUR 13,515 million in 1H 2007 (in comparison with  RUR 11,863 million in 1H 2006). It is connected with:

• the growth of expenditures from other telecommunication operators’ services by 219.70% that is attributable to implementation of the "calling party pays" rule;

• other expenditures growth in 1H 2007, which is related to increased payments to the pay telephone services reserve and a rise in costs for agent services.

Vaagn Martirosyan, CenterTelecom General Director, commenting on the 1H 2007 financial results of the company, said that the dynamics of CenterTelecom’s IAS financial results in general are in line with trends reflected in the company’s RAS results published earlier. "The general tendency demonstrates the correctness of the priority business directions chosen by the company’s management. These directions include growing the contribution to profit of new services and optimization of the company’s management system. In future, we plan to continue adjusting our marketing policy in order to improve the company’s client-oriented focus and to provide the most popular telecommunications services to our customers. Currently our main objective is to re-engineer our business processes, modernize the functional and organizational structure of the company, and also optimize the new sales system in its key segments – sales of services to corporations and other telecommunications operators. We also think that our work in this direction will lead to a considerable positive impact on CenterTelecom’s financial performance".

The full version of CenterTelecom’s unaudited consolidated financial statements for 1H 2007 according to IFRS is available on the Company’s corporate website.  - http://www.centertelecom.ru/eng/about/about/news/200709111026-7159.htm