OREANDA-NEWS. On 04 April 2008 Southern Telecommunications Company (“UTK”), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, announced its audited financial results for the year 2007 compiled in accordance with Russian Accounting Standards (RAS).

2007 revenue is up 12.5% over 2006  to RUR 19.8 billion;

2007 EBITDA increased 16.5% over 2006 to RUR 7.3 billion representing an EBITDA margin of 37.2% (up 1.3 percentage points);

Revenue from data transmission and Internet access services increased 65.2% to RUR 2.7 billion. Share of revenues from these services in total telecom revenue increased by 4.3 percentage points over 2006 to 14.1%.

UTK’s 2007 revenue made RUR 19,772.4 million, representing a 12.5%- increase over 2006. Operating expenses grew by 11.6% to RUR 14,274.9 million. Thus, 2007 operating profit was up 14.9% to RUR 5,497.5 million and 2007 net profit was up 54.2% to RUR 1,826.8 million. EBITDA for the reporting period amounted to RUR 7,348.0 million or 16.5% higher than in 2006.

Revenues from local telephone services increased by 7.2% to RUR 9,008.6 million due to the increase in local tariffs in February 2007and accounted for 47.6% of the Company’s telecom revenues.

Revenues from intra-zonal telephone services rose 23.8% to RUR 3,768.9 million in the period due to introduction of “Calling Party Pays” principle and accounted for 19.9% of the Company’s telecom revenues.

Active development and roll out of new technologies enabled UTK to increase 2007 revenues from data transfer and Internet access services by 65.2% to RUR 2,669.7 million, accounting for 14.1% of the Company’s telecom revenues.. Number of Internet broadband access subscribers surged 130.7% to 169.6 thousand users.

Revenues from interconnection and traffic transit services decreased 0.7% to 2,895.5 million roubles accounting for15.3% of the Company’s telecom revenues.

2007 expenses for wages and salaries increased 1.2% over 2006 to RUR 4,297.7 million accounting for 30.1% of the Company’s operating expenses. Depreciation charges grew 10.7% to RUR 2,887.5 million accounting for 20.2% of the Company’s operating expenses.. 2007 material expenses amounted to RUR 1,666.9 million representing a 13.6%-increase over 2006 and accounting for 11.7% of the Company’s operating expenses.. Amount of payments to national telecom operators rose 74.6% to RUR 1,738.3 million due Internet traffic growth and introduction of “Calling Party Pays” principle and accounted for 12.2% of the Company’s operating expenses.

In 2007 the Company continued to optimize the headcount aiming to raise UTK’s business efficiency. As a result the Company managed to slash the average number of employees by 16.2% to 28,852 people and bring a number of lines per employee to 141.6 representing a 20.3%-increase.

2007 capex amounted to RUR 4,079.7 million, a 98.6% increase over. 2006. Capex were funded only from in-house funds. Digitalization rate of the Company’s local network climbed 3.61% y-o-y and stood at 68.89% as of the beginning of 2008.