OREANDA-NEWS. On 06 August 2008 Dalsvyaz announced the results of its financial performance in the first six months of 2008 in accordance with Russian Accounting Standards (RTS).

“During the first six months of 2008, Dalsvyaz showed robust financial indicators, which were the result of business diversification, a higher percentage of unregulated services in core earnings, in particular as regards Internet access, interactive television, mobile telephony, up 28.6% and a high EBITDA margin (35.6%)”, the company’s general director Anton Kolpakov pointed out.

Business efficiency indicators

Average number of staff employed as of June 30, 2008 stood at 11,732, which is 649 employees less than as of January 1, 2008;

Revenue per employee rose 18.2% to Rub 503,500 as of the end of Q1 2008 (vs. Rub 426,000 as of January 1, 2008);

The number of lines per employee rose 10% to 127,300 (115,700);

Cost per ruble of revenue in Q1 2008 amounted to Rub 072.9 kopecks (vs. Rub 071.9 )

Number of lines per employee rose 10% to 127.3 lines (vs. 115.7).

Trends in subscriber base and value-added services as of H1 2008

The proportion of value-added services (Internet access, datacom, mobile telephony, interactive TV and video on demand) accounted for 27.2% of the company’s revenue structure (up from 20% in H1 2007);

The subscriber base for dial-up Internet access decreased 17% to 167,729 subscribers (vs. 203,290 in H1 2007) as subscribers switched to broadband Internet);

The (DSL) broadband Internet subscriber base skyrocketed 186% to 211,271 (up from 113,890 in H1 2007);

The cellular subscriber base decreased 3% and reached 101,570 (43,693 in the Kamchatka region) (vs. 50,627 in H1 2007), 57,877 in the Magadan region (vs. 53,946 in H1 2007);

The number of main lines rose and stood at 1,382,569 (up from 1,381,990 lines in H1 2007).

Depreciation charges increased by Rub 51.4 mln or 7.9% in conjunction with the commissioning of fixed assets.  The proportion of this item remained unchanged compared with H1 2007 and stood at 16.3%;

Material expenses rose 15.3% vs. H1 2007 due to an increase in subscriber equipment, broadband Internet access, and digital television (IP-TV) costs;

Expenses under the item “Interconnect services” rose Rub 78.1 mln in H1 2008 compared with the year-earlier period, which came as a result of rising traffic on cellular telecom networks due to a spike in the subscriber base, payment for completion of ABC codes of cellular operators, lease in the satellite segment and additional telecom channels for the federal special-purpose program Education.

Higher expenses payable to Rostelecom due to a rise in tariffs for leasing channels under zonal interests since March 2008, and also higher expenses connected with a rise in Internet consumer expenses;

An increase in other expenses in H1 2008 compared with the same period in 2007 by Rub 38.5 mln due to a rise in expenses for agency services, software costs and databases.

Other revenues and expenses

The company reported a loss of Rub 408.6 mln from other non-operating activities in H1 2008, which is 16.4% less than the loss posted in H1 2007 (Rub 488.8 mln).

Interest-bearing revenues increased by 128% or Rub 33.1 mln compared with H1 2007 for a total of Rub 59.0 mln;

Interest-bearing expenses rose by Rub 262.6 mln, which is 8.3% higher than interest-bearing expenses in H1 2007 (Rub 242.5 mln).