OREANDA-NEWS. April 6, 2011. VolgaTelecom, telecommunications services provider in the Volga Federal district, releases FY2010 unaudited consolidated financial statements of the Company compiled under the International Financial Reporting Standards (IFRS)[1].

KEY FINANCIAL HIGHLIGHTS

RUB, mln

2010

2009

Y-o-y change,%

Sales revenue

35, 501

32, 759

8.4%

OIBDA[2]*

13, 618

14, 474

(6%)

% of sales revenue

38.4%

44.2%

(5.8 percentage points)

EBITDA[3]

13, 630

14, 411

(5%)

% of sales revenue

38.4%

44.0%

(5.6 percentage points)

Operating profit [4]

6, 354

6, 971

(9%)

% of sales revenue

17.9%

21.3%

(3.4 percentage points)

Income before tax

5, 344

5, 265

1.5%

% of sales revenue

15.1%

16.1%

(1.0 percentage points)

Net profit

3, 900

4, 181

(7%)

% of sales revenue

11.0%

12.8%

(1.8 percentage points)

Net Debt[5]

16, 118

8, 371

92%

Net Debt/ OIBDA

1.18

0.58

0.6 percentage points

Capex

12, 525

3, 871

224%

% of sales revenue

35.3%

11.8%

23.5 percentage points

OIBDA % of sales revenue decreased year on year due to the increase in operating expenses, including the write-off of expenses related to the implementation of Amdocs billing system.

THE COMPANY’S SALES REVENUE

RUB, mln

2010

2009

Y-o-y change,%

Local telephony services

12, 645

11, 512

10%

Intrazonal telephony services

4, 532

4, 557

(1%)

Telegraphy, data transmission network and telematic services (Internet)

6, 810

5, 915

15%

Mobile radio telephony (cellular) services

4, 885

4, 532

8%

Interconnect and traffic transit services

4, 261

4, 069

5%

Fees on assistance and agent services

481

510

(6%)

Mobile radio telephony, wire broadcasting, radio broadcasting and TV services

761

739

3%

Other services of core operations

73

70

4%

Revenue from non-telecommunications services

1, 053

855

23%

Total

35, 501

32, 759

8.4%

The subscribers’ base of Internet broadband access services has increased by 26% vs. 2009 and accounted for 1, 253, 000 users.

OPERATING EXPENSES

RUB, mln

2010

2009

Y-o-y change,%

Wages and salaries

9, 830

8, 624

14%

Depreciation and amortization

7, 265

7, 502

(3%)

Materials, repairs and maintenance, utilities

3, 129

2, 810

11%

Telecom operators’ services costs

3, 976

3, 611

10%

Other operating expenses

6, 503

4, 691

39%

Total

30, 703

27, 238

13%

VolgaTelecom’s 2010 RAS accounting statement will be available at the Company’s site after the signature of audit opinion.

Appendices:

1. OJSC VolgaTelecom Consolidated Statement of Financial Position at December 31, 2010 (RUB million)

 

December
31, 2010

December
31, 2009

ASSETS

 

 

Non-current assets

 

 

Property, plant and equipment

42, 899

40,125

Intangible assets

5, 594

4, 629

Non-current receivables

100

3

Other non-current assets

142

193

Investments in associates

144

170

Non-current financial assets

4, 172

28

Total non-current assets

53, 051

45, 148

 

 

 

Current assets

 

 

Inventories

645

426

Trade and other receivables

2, 708

2, 264

Income tax receivable

170

31

Other current assets

459

403

Current financial assets

8

412

Cash and cash equivalents

2, 321

2, 033

 

6, 311

5, 569

Assets held for sale

24

33

Total current assets

6, 335

5, 602

Total assets

59, 386

50, 750

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

Equity attributable to shareholders of the Company

 

 

Share capital

3, 854

3, 854

Treasury stock

(2, 467)

-

Other reserves

(327)

5

Retained earnings

29, 065

26, 820

Total equity attributable to shareholders of the Company

30, 125

30, 679

Non-controlling interest

168

5

Total equity

30, 293

30, 684

 

 

 

Non-current liabilities

 

 

Loans and borrowings

14, 820

7, 129

Employee benefits

2, 495

2, 211

Other long-term liabilities

413

460

Deferred income tax liabilities

2, 297

2, 091

Total non-current liabilities

20, 025

11, 891

 

 

 

Current liabilities

 

 

Loans and borrowings

3, 619

3, 275

Accounts payable and accrued expenses

4, 725

4, 141

Income tax payable

3

113

Other short-term liabilities

713

634

Provisions

8

12

Total current liabilities

9, 068

8, 175

Total liabilities

29, 093

20, 066

Total equity and liabilities

59, 386

50, 750

2. OJSC VolgaTelecom Consolidated Statement of Comprehensive Income for the year ended December 31, 2010 (RUB million, except per share amounts)

 

 

 

2010

2009

Sales revenue

35, 501

32, 759

Personnel costs

(9, 830)

(8, 624)

Depreciation and amortization

(7, 265)

(7, 502)

Telecom’s operators expenses

(3, 976)

(3, 611)

Materials, repairs and maintenance, utilities

(3, 129)

(2, 810)

Other operating income

1, 556

1, 450

Other operating expenses

(6, 503)

(4, 691)

Operating profit

6, 354

6, 971

Share in result of associates

(7)

8

Financial costs

(1, 374)

(1, 847)

Other profit and expenses from financial and investment operations

347

204

Foreign exchange loss

24

(71)

Profit before taxation from continuing operations

5, 344

5, 265

Income tax

(1, 444)

(1, 084)

Profit for the year

3, 900

4, 181

Other comprehensive income

 

 

Change of fair value of financial assets available for sale

171

4

Income tax on other comprehensive income

(35)

-

Total other comprehensive income for the year net of income tax

136

4

Total comprehensive income for the year

4, 036

4, 185

Profit for the reporting period attributable to:

 

 

equity holders of the parent

3, 900

4, 192

minority shareholders of subsidiaries

-

(11)

Comprehensive income for the reporting period attributable to:

 

 

equity holders of the parent

4, 036

4, 196

minority shareholders of subsidiaries

-

(11)

Total comprehensive income for the year

4, 036

4, 185

Basic and diluted earnings per share attributable to equity holders of the parent (RUB) for the year

11.93

12.78

 

 

 

 

 

3. OJSC VolgaTelecom Consolidated Cash Flow Statement for the year ended December 31, 2010  (RUB million)

 

 

 

2010

2009

Financing activities

 

 

Purchase of treasury shares

(2, 467)

-

Proceeds from bank and corporate loans

12, 031

2, 123

Repayment of bank and corporate loans

(3, 043)

(4, 598)

Repayment of bonds

(929)

(2, 973)

Acquisition of subsidiaries, net of received cash assets (see note 6)

(3, 768)

(326)

Proceeds from promissory notes

-

1, 013

Repayment of promissory notes

-

(1, 396)

Repayment of vendor financing liabilities

(175)

(385)

Proceeds from (repayment of) other non-current financial liabilities

(9)

(6)

Repayment of finance lease liabilities

(515)

(641)

Dividend paid to shareholders of the Company

(2, 022)

(737)

Cash flows utilized in financing activities

(897)

(7, 899)

Net increase in cash and cash equivalents

288

355

Cash and cash equivalents as at the beginning of the reporting period

2, 033

1, 678

Cash and cash equivalents as at the end of the reporting period

2, 321

2, 033

VolgaTelecom is the largest telecommunications company of the Volga region providing a wide range of fixed-line and mobile telephony, Internet and data transmission, TV and radio broadcasting services. The Company is operating in 11 regions of the Volga Federal district. The installed capacity of the Company’s fixed-line telephony network is 5.2 million lines and the equipped capacity is 4.9 million lines. At 2010 year-end the number of Internet broadband access services users exceeded 1.2 million persons. The number of cable TV and over-the-air-cable TV services subscribers is over 280, 000 users.

Currently VolgaTelecom along with other Mega-Regional Companies of Svyazinvest holding and Dagsvyazinform company is being reorganized through merger with OJSC Rostelecom and creation on its base of national telecom company which will hold leading positions in key segments of Russia’s market. Creation of consolidated Rostelecom, which will be the legal successor of all the companies involved in this process, will be completed in spring 2011.

[1] International Financial Reporting Standards. Consolidated financial statements include assets, liabilities and performance results of VolgaTelecom and its subsidiaries (hereinafter – the Company).

[2] OIBDA is calculated as Operating profit plus Depreciation and Amortization.

[3] EBITDA is calculated as Income before tax plus Depreciation and Amortization plus Financial expenses minus Interest receipts of financial assets minus Interest receipts of pension plan assets.

[4] Operating profit in 2010 with due account for provision for Amdocs Billing Suite depreciation to the amount of RUB 1,044 million.

[5] At December 31, 2010. Net Debt is calculated as Non-current financial liabilities plus Current financial liabilities minus Cash and cash equivalents minus Promissory notes and bonds available for sale. The method of Net Debt calculation is also applicable for the statements at December 31, 2009.