Company information

About group

History / acvhievements

Shareholdings & structure

Board of directors

Executive management

Annual reports

Press centre

Recent news

News archive

Articles & publications

Articles & publications archive

Contact information

Investor relations

Restructuring

For shareholders

Analyst Coverage

Financial reports

Investor reports

Presentations

Contact information

Recent news

30.07.2010
Sibirtelecom releases RAS H110 financial and operating results

Press Release

Sibirtelecom (RTS: ENCO/ENCOP, ENCOG/ENCOPG, MICEX: STKM/STKMP; ADR: ОТС - SBTLY– Frankfurt and Berlin stock exchanges – ISIN: US8257351036, WKN: 260452) – a telecommunications operator in the Siberian Federal District, hereby announces its financial results for the first half of 2010 in accordance with Russian Accounting Standards (RAS). 

Revenue 

• The revenue of Sibirtelecom (hereinafter, the Company) not including its subsidiary business amounted to RUR 14,494.0 mln in H1 2010, which is RUR 418.4 mln or 3.0% compared to the same period last year.  

The main factor driving growth of the Company’s revenue during the reporting period was the expansion of broadband Internet services, i.e. a rise in the number of Internet users. 

Revenue breakdown (RUR, mln) 

Local voice is the Company’s biggest revenue item, equal to 43.4% (RUR 6,248.3 mln). 

Other large revenue items include earnings from datacom and telematic services (3,346.0 mln) and from the provision of intrazonal telephony (RUR 2,243.3 mln), which account for 23.2% and 15.6%, respectively. 

Revenue derived from interconnect and traffic transmission amounted to 8.3% (RUR 198.7 mln) of total revenue.  Revenue from the provision of cellular services amounted to 2.9% (422.8 mln).  

Compared to the same period in 2009 (not including the subsidiary business): 

• growth in revenue from the provision of telegraphic services, datacom and telematic services amounted to RUR 544.2%, or 19.4%, which was attributable to a rise in the number of broadband Internet users and thus an increase in ISP revenue.  As of July 1, 2010 the number of broadband Internet subscribers stood at 692,500;
• growth in revenue from the provision of local voice stood at RUR 470.4 mln, or 8.1%, which was mainly due to indexation of regulated tariffs as of February 1, 2010;  
• the decrease in revenue from the provision of intrazonal telephony amounted to RUR 246.0 mln, or 9.9%, which was attributable to a decrease in fixed-line traffic both to fixed-line and cellular networks and a decrease in a number of territories as of January 30, 2010 in the number of intrazonal connections with “distant” tariff zones;
• the decrease in interconnect and traffic transmission which amounted to RUR 194.4 mln or 14%, which was attributable to a decline in volumes of traffic transmitted;
• the decrease in revenue from line leasing amounted to RUR 119.7 mln, or 36.4%, which was attributable to a decrease in the number of lines leased;
• the decrease in outsourcing and agency services amounted to RUR 36.5 mln (-14.5%).  The decline was due to a lower amount of services provided by Rostelecom, and also the conclusion of direct agreement with subscribers on the part of Rostelecom;
• the shrinkage in revenue from provision of cellular services not counting the subsidiary business amounted to RUR 33.7 mln, or 7.4%, which was attributable to a decrease in consumption in the household and corporate segments.

 Expenses 

The Company’s expenses (not counting the subsidiary business) for H1 2010 decreased by RUR 636.6 mln, or 5.4% compared to the same period in 2009 and stood at RUR 11,232 mln.

 Breakdown of expenses (RUR, mln) 

The Company’s major expense item is payrolls and social insurance contributions (35.7%), the depreciation of fixed assets (20.3%), other expenses (10.9%), interconnect expenses (except Rostelecom) (10.2%), and outsourcing expenses (9.9%).

 Compared to the same period in 2009 (not counting the subsidiary business): 

• payroll and social insurance contributions decreased by RUR 279.6 mln, or 6.5%, which was attributable to headcount reduction efforts.
• interconnect expenses (except Rostelecom decreased by 190.1 mln, or 14.2% due to a drop in volumes of originated and terminated traffic;
• other expenses decreased by RUR 160.9 mln, or 11.6%, which was mainly attributable to lower software expenses and private pension support of employees;
• outsourcing expenses decreased by RUR 126.4 mln, or 10.2%, which was due to the optimization of business processes in operations with outsourcing organizations with respect to transportation service;
• material expenses shank by RUR 149.1 mln, or 23.3%, which was mainly due to a rise in expenses to provide connectivity to additional broadband Internet subscribers given growth in the subscriber base.

Financial results  

Headline RAS financial indicators (RUR, mln) 

•  Total investments in Sibirtelecom’s fixed assets (not including its subsidiary business) stood at RUR 2,402.4 mln in H1 2010, which is 166.4% more than in the same period in H1 2009.  The bulk of capital expenses went towards rolling out advanced telecom network infrastructure and datacom networks. The level of investments allocated to phase in value-added products during the reporting period amounted to 79.4% of the total amount of capital investments;
• During the reporting period an increase of RUR 1,008.7 mln, or 22.2%, was seen in OIBDA, which was attributable to a rise in revenue (3%) along with a once-off decline in expenses not including the depreciation of fixed assets, intangible assets and leasing costs (6.3%).  OIBDA margin came in at 38.6%, which is 6.1% higher compared to the same period in 2009;
• EBIT increased by RUR 1,056.0, or 49.9%, and amounted to RUR 3,172 mln, which was attributable to an increase in revenue (3%) and a decline in expenses (5.4%).  EBIT margin came in at 22%.
• Pre-tax profit increased by RUR 1,343.1 mln and totaled RUR 2,632.8 mln, which was attributable to a positive trend in EBIT and a decrease in losses sustained from foreign currency exchange rate differences equal to RUR 217.8 mln;
• Net profit as of the end of the reporting period increased by RUR 975.6 mln, or 90.8% compared to the same period last year and amounted to RUR 2,050.2 mln, which was attributable to an increase in pre-tax profit.  EBIT margin rose 6.5% and reached 14.2%.

 Headline operating indicators 

The accounting reports of Sibirtelecom for the first half of 2010 under RAS can be found on the Company’s corporate website at the following address: http://www.sibirtelecom.ru/?sbt_rsbu (in Russian) and http://www.sibirtelecom.ru/eng/?esb_rsbu (in English).

Deputy director of the Federal Security Service of the Russian Federation – head of Special Federal Services for the Telecom and Information Security of the Russian Federation, general-colonel 

Born in 1948.

1968 – 1991 – worked with the KGB of the USSR.

1991 – 1992 – held management positions in the government Telecommunications Committee under the president of the USSR and the Federal Government Agency for Telecommunications and Information Security under the President of the Russian Federation.

1992 – 1996 – deputy head of the Main Security Directorate of the Russian Federation – head of Administration for Presidential Telecommunications.

1996 – 2003 – deputy head of the Federal Security Service of the Russian Federation and head of the Administration for Presidential Telecommunications.

2003 – 2004 – first deputy director of the Federal Security Service of the Russian Federation and head of Special Federal Services for the Telecom and Information Security of the Russian Federation under the Federal Security Service of the Russian Federation.

2004 – present – deputy director of the Federal Security Service of the Russian Federation and head of Special Federal Services for the Telecom and Information Security of the Russian Federation

Awarded the order ‘For military valor”.  Recipient of State Employee award. Distinguished civil servant of the Russian Federation. 

[1] OIBDA is calculated using the following formula: EBIT + Depreciation of fixed assets  + Lease expenses (on the balance sheet of the lessor);

[2] EBITDA is calculated using the following formula: Pre-tax profit + Interest payable including additional payments on credits and loans + Depreciation of fixed assets and intangibles + Lease expenses – Interest receivable.

[3]Net Debt is calculated using the following formula: Long-term credits and loans + Short-term credits and loans – Monetary resources – Current financial investments

[4] The total number of employees does not include those who work concurrently and on outsourcing terms