OREANDA-NEWS. April 05, 2010. CenterTelecom reports 2009 financial results:

Key Financial Highlights for 2009, RUB million

Indicator

2009

2008

Change, %

Revenue from core operations

36,434

33,715

+8.06

including revenue from telecommunications services

34,332

31,872

+7.72

Expenditure on core operations

30,530

26,351

+15.86

including depreciation

4,289

4,278

+0.26

EBITDA (1)

16,233

12,207

+32.98

EBITDA margin (2)

44.55%

36.21%

-

Sales profit

5,904  

7,364  

-19.83

Net profit

5,059  

2,585  

+95.71

1) EBITDA is calculated as earnings before taxes plus interest payable plus depreciation plus leasing payment minus interest receivable

2) EBITDA margin is calculated as EBITDA/revenues

Characteristics of operational efficiency:

The number of telecommunications lines per employee rose 27.81% to 236 lines (185 lines for 2008)

Production cost per ruble of revenue increased by RUB0.563 to RUB0.8379  (RUB0.7816 in 2008);

Personnel numbers were reduced by 7.97% to 29,005 employees as of 31 December, 2009 (31,517 in 2008)

Net profit margin amounted to 13.89% (7.67% for 2008)

Growth of EBITDA was caused by increase in operating efficiency and by reduction of other costs related to revaluation of the company's debt denominated in foreign currency and increase in other income connected with recovery of previously formed provision for impairment of financial investments.

Income Structure for 2009, RUB million

Type of income

2009

2008

Change, %

Local telephony services (1)

6,097  

6,250  

-2.45

City and rural telephony services

17,237

16,012

+7.65

Data transmission and Internet access services

6,054  

4,588  

+31.95

including Internet access services

5,151  

3,843  

+34.04

Interconnection and traffic transfer services

3,657  

3,793  

-3.59

Cooperation and agency services

1,036  

1,055  

-1.80

Other income from telecommunications services

1,288  

1,229  

+4.80

Income from other sales (non-core operations)

1,065  

788     

+35.15

Including income from lease of assets 

784     

572     

+37.06

TOTAL

36,434

33,715

+8.06

1) Income from intra-zone telecommunications including income from intra-zone telecommunications through pay phones and from the provision of intra-zone telecommunications channels

 The number of users of broadband Internet access service under the DOMOLINK brand grew over 70.14% for 2009 exceeding 1.191 million users. The proportion of income attributable to data transmission and Internet access services rose to 16.62% (against 13.61% for 2008).

Expenditure Structure for 2009, RUB million

Type of expenditure

2009

2008

Change, %

Depreciation

4,289  

4,278  

+0.26

Wages

8,094  

7,334  

+10.36

Social insurance

1,809  

1,691  

+6.98

Material costs (total)

2,174  

1,791  

+21.38

Expenses on telecommunications operators’ services

2,636  

2,796  

-5.72

Charges to universal service provision

358     

328     

+9.15

Rent payment

4,958  

2,952  

+67.95

Including lease payments

4,248  

2,311  

+83.82

Other expenses

6,212  

5,181  

+19.90

TOTAL

30,530

26,351

+15.86

The increase in rent payment and other expenses amounts in 2009 against 2008 is connected with CenterTelecom’s participation in a program of universal service implementation in Russia’s Central Federal District.

Commenting on 2009 RAS results, Vaagn Martirosyan, General Director, CenterTelecom, said: "2009 was not the easiest year for Russian economics in general. However CenterTelecom's financial results for 2009 reflect the company's stable development even when it faced the consequences of economic instability. Strong economic efficiency indicators were achieved owing to CenterTelecom management's consistent work aimed at reform of the company's business model, reorganization of sales and maintenance processes, implementation of newest labor management and personnel motivation methods, and also at use of modern centralized IT systems. In 2010 we intend to continue developing the company in accordance with our strategic priorities which include expansion of range of new telecommunications services and implementation of modern technical solutions in CenterTelecom's network in the regions where the company operates."