OREANDA-NEWS. August 18, 2010. Uralsvyazinform (RTS and MICEX) URSI/URSIP, ADR: UVYZY/UVYZYP) – a universal telecommunications operator – hereby presents its unconsolidated operating and financial results for the first six months of 2010 in accordance with Russian Accounting Standards.

The highlights of the H1 2010 financial statement are as follows:

With a 6.1% rise in revenue and thanks to strict cost control the Company managed to reduce its expenses by 3.5% compared to the first six months of 2009, which resulted in a major increase in economic efficiency indicators.  Higher revenue was driven by a rise in revenue from datacom and Internet access, mobile telephony and local voice.

Revenue from datacom and Internet access increased by 12.6% and amounted to RUR 3,525 mln.  The number of broadband Internet users increased by 32.2% compared with the first six months of 2009 and stood at 79.2 Petabytes.

Revenue from cellular telephony increased by 11.4% and stood at 6,947.8 mln thanks to a 13.3% increase in average monthly revenue per user (ARPU) to RUR 204 (vs. RUR 180 in H1 2009), which was the result of tariff policy optimization in this segment.

Local voice revenue went up 7.0% and stood at RUR 5,610.6 mln as a result of tariff indexation effective January 1, 2010 in accordance with a decision by the Federal Tariff Service.  

A decrease in operating expenses was mainly attributable to lower interconnect expenses, including optimization of the cost of backbone Internet traffic roaming payments.

EBITDA advanced 23.7% and amounted to RUR 9,490.2 mln, while EBITDA/revenue went up 6.3% and stood at 44.5% in H1 2010.

Net profit increased 2.1 times to RUR 3,977.2 mln net profit/revenue rose 9.1% to 18.6%.

The proportion of regulated services (datacom, ISP and cellular telephony) in telecommunications revenue increased to 50.4% (up from 47.9% in H1 2009);

The Company continued to work on deleveraging: total liabilities on credits and loans decreased by 36.7% to RUR 13,038.7 mln compared to the beginning of 2010.

Headline financial indicators

 

1H 2010

1H 2009

Change

Revenue, RUR, mln

21,329.0

20,103.4

+6.1%

Expenses, RUR, mln

15,440.0

16,004.6

-3.5%

EBITDA, RUR, mln

9,490.2

7,669.2

+23.7%

EBITDA margin

44.5%

38.1%

+6.3%

Operating profit, RUR, mln

5,889.0

4,098.7

+43.7%

Operating margin

27.6%

20.4%

+7.2%

Pre-tax profit, RUR mln

5,133.8

2,523.9

+103.4%

Net profit, RUR, mln

3,977.2

1,920.8

+107.1%

Net margin

18.6%

9.6%

+9.1%

EBITDA is calculated as the sum of pre-tax profit, interest payable, depreciation, expenses as lease payments and additional expenses for credits and loans minus interest receivable.

EBITDA margin, Operating margin, and Net margin calculated as the ratio of the respective indicator (EBITDA, Operating profit, Net profit) to revenue.

Headline operating indicators

 

1H 2010

1H 2009

Change

Number of subscribers:

fixed-line, th.

сellular telephony, th.

broadband Internet access, th.

paid television*, th.

 

3,688.5

5,521.3

811.1

121.9

 

3,724.6

5б655.8

613.7

118.5

 

-1.0%

-2.4%

+32.2%

+2.9%

Outgoing traffic of intrazonal telephony, mln min.

940.2

1,028.7

-8.6%

Datacom traffic, PB

79.2

41.9

+89.0%

*Cable TV subscribers + interactive Utel TV

Revenue breakdown

 

1H 2010

1H 2009

Change

RUR, mln

proportion

RUR, mln

proportion

Cellular telephony

6,947.8

33.4%

6,238.5

31.9%

+11.4%

Local voice

5,610.6

27.0%

5,245.2

26.9%

+7.0%

Datacom and ISP

3,525.0

17.0%

3,130.2

16.0%

+12.6%

Interconnect and traffic transmission

2,199.1

10.6%

2,276.2

11.7%

-3.4%

Intrazonal telephony

2,131.4

10.2%

2,308.7

11.8%

-7.7%

Wire broadcasting

150.3

0.7%

137.0

0.7%

+9.7%

Radio and television broadcasting

137.0

0.7%

129.8

0.7%

+5.5%

Data transmission

75.2

0.4%

67.0

0.3%

+12.2%

TOTAL

20,776.4

100.0%

19,532.6

100.0%

+6.4%

Breakdown of operating expenses

 

1H 2010

1H 2009

Change

RUR, mln

proportion

RUR, mln

proportion

Payrolls

3,131.6

20.3%

3,044.9

19.0%

+2.8%

Social insurance contributions

751.7

4.9%

722.7

4.5%

+4.0%

Depreciation of fixed assets

3,014.6

19.4%

3,062.8

19.2%

-1.6%

Interconnect

2,402.8

15.6%

2,882.9

18.0%

-16.7%

Outsourcing

1,235.6

8.0%

1 313.2

8.2%

-5.9%

Materials

927.6

6.0%

981.1

6.1%

-5.5%

Lease payments

674.0

4.4%

844.4

5.3%

-20.2%

Other expenses, including:

3,302.1

21.4%

3 152.6

19.7%

+4.7%

agency fees

1,051.8

6.8%

1,190.5

7.4%

-11.7%

Software and databases

253.5

1.6%

240.2

1.5%

+5.5%

lease of premises

345.5

2.2%

361.6

2.3%

-4.4%

deductions to the universal service fund

220.3

1.4%

204.7

1.3%

+7.6%

TOTAL

15,440.0

100.0%

16,004.6

100.0%

-3.5%

Debt load

 

1H 2010

1H 2009

Change

Long-term credits and loans

8,892.2

13,263.2

-33.0%

Short-term credits and loans

4,146.5

7,335.5

-43.5%

Total

13,038.7

20,598.7

-36.7%

Breakdown of investments  

 

1H 2010

1H 2009

Total amount of investments, RUR, mln

1,144.6

1,149.6

Traditional telephony

2.8%

3.7%

Value-added services, incl. cellular telephony

41.9%

39.4%

Datacom network and infrastructure

24.9%

46.1%

IT investments

22.1%

0.5%

Other, including

8.3%

10.3%

Construction and renovation of buildings and facilities

3.3%

5.2%