OREANDA-NEWS. On 04 August 2008 Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia’s national telecommunications operator, announced its unaudited first half 2008 results in accordance with the Russian Accounting Standards (RAS).

Rostelecom’s first half 2008 revenues amounted to RUB 30,587.5 million – a similar level compared to the same period last year.

Data transmission services continue to substantially increase the share of the Company’s total revenues compared to the traditional services provided by Rostelecom.

Domestic long-distance (DLD) traffic for the first half of 2008 decreased by 0.9% year on year. First half 2008 DLD revenues decreased by 4.2% and totaled RUB 14,768.4 million. The decrease in both DLD traffic and revenues was mainly attributable to the migration of DLD traffic from fixed-line to mobile networks, changes in the fixed-line market structure as well as the implementation of lower price cap tariffs as mandated by the regulatory authorities

Outgoing international long-distance (ILD) traffic decreased by 2.8% year on year. ILD revenues from Russian operators and subscribers amounted to RUB 5,840.2 million, representing a decrease of 7.5% year on year. The decrease in revenues was primarily due to the changes in the OILD traffic mix.

First half 2008 incoming ILD traffic increased by 9.4% year on year. Rostelecom increased its share of the incoming international traffic, as the Company continued to leverage its strong market position. Revenues from international operators for incoming ILD traffic transit and termination rose 7.1% year on year to RUB 2,764.7 million.

Revenue from other business segments increased by 12.0% year on year to RUB 7,214.2 million, reflecting the growth of value-added and new products and services. Rostelecom delivered increases in revenues from data transmission and telematic services, leased lines, intelligent network services as well as customer equipment servicing among others.

For the first six months of 2008, revenues from data transmission and telematic services saw a substantial increase of 3.8 times compared to H1 2007, amounting to RUB 1,172.6 million, while revenues from intelligent network services rose to RUB 618.3 million representing a year-on-year increase of 27.2%.  Revenues from leased line services grew 2.6 % year on year to RUB 4,034.0.

Rostelecom’s operating expenses for the first half 2008 amounted to RUB 24,272.5 million – a year-on-year decrease of 4.1%.

Depreciation for the first six months of 2008 amounted to RUB 2,138.8 million.  The increase of 14.2% compared to the same period last year is a result of property, plant and equipment additions during 2007.

OIBDA for the first half 2008 grew 15.6% year on year to RUB 8,453.8 million, representing an OIBDA margin of 27.6%.  The increase compared to the same period last year was mainly attributable to the decrease in the Company’s operating expenses – among other things, due to the elimination of a compensation surcharge as of January 1, 2008.

First half 2008 operating profit amounted to RUB 6,315.0 million, up 16.1% year on year.

Other gains and losses for the first six months of 2008 totaled RUB 310.9 million compared to RUB 833.0 million a year ago. The decrease was mainly driven by the sale of a number of financial investments, a reduction in the number of financial investments to be revaluated, along with foreign exchange loss in the first half 2008.

Rostelecom’s net profit for the first half 2008 increased by 6.2% and totaled RUB 4,983.5 million.

*All traffic data provided in the press release is preliminary.

** OIBDA is calculated as total revenues less operating expenses excluding depreciation.