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Recent news
22.09.2009
VolgaTelecom releases H1 2009 IFRS financial results
Press release
Nizhny Novgorod, September, 2009 (RTS NNSI/NNSIP; ĚICEX: VTEL/VTELP; ADR: VLGAY) VolgaTelecom hereby presents the results of its business activities for the first six months of 2009 in accordance with international financial reporting standards (IFRS).
The headline results of VolgaTelecom for the first six months of 2009 based on unaudited financial reports can be summed up as follows:
- Revenue – RUR 16,112 mln (+2.2 compared with the first six months of 2008);
- Operating profit – RUR 3,427 (+13.5%);
- Profit before taxation – RUR 2347 mln (+0.4%);
- EBITDA* –RUR 7,055 mln(+12.1%);
- OIBDA *–RUR7,140 (+14.0%);
- Ne tprofit – RUR1,845 mln(+ 7.1%);
- Net debt* – RUR 12,603 mln (RUR2, 746 mln for the period).
The Company’s relative indicators for the first six months of 2009:
- EBITDA margin* –43.8% (+3.9%);
- OIBDA margin* –44.3% (+4.6%);
- Net profit margin* – 11.5% (+0.6%);
- Number of lines per employee* – 264 lines (+14.9%);
- Revenue per employee* – RUR 506,000 (+12.1%)/
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* ÎIÂDA is calculated as operating profit and expenses under the item “Depreciation and amortization”;
ÎIÂDA margin is calculated as the ratio of OIBDA to revenue;
EBITDA is calculated as profit before taxation, interest expenses, depreciation and amortization adjusted for interest income;
EBITDA margin is calculated as the ratio of EBITDA to revenue;
Net profit margin is calculated as the ratio of Net profit to borrowed liabilities;
Net debt is calculated as borrowed liabilities adjusted to cash and cash equivalents;
The number of lines per employee is calculated as the ratio of the average number of lines during a period to the average number of employees;
Revenue per employee is calculated as the ratio of Revenue to the average number of employees;
Revenue
|
Revenue, RUR, mln |
1H 2009 |
1H 2008 |
Change, |
|
Local voice telephony |
5,673 |
5,468 |
3.7 |
|
Telegraphic, datacom and telematic services (Internet) |
2,928 |
2,360 |
24.1 |
|
Intrazonal telephony |
2,271 |
2,404 |
-5.5 |
|
Mobileand radio (cellular) telephony |
2,201 |
2,272 |
-3.1 |
|
Interconnect and traffic transmission |
2,029 |
2,232 |
-9.1 |
|
Mobileand radio telephony, wire broadcasting, radio broadcasting, television |
370 |
338 |
9.5 |
|
Revenue from other sales (non-core types of activities) |
350 |
356 |
-1.7 |
|
Outsourcing and agency fees |
255 |
277 |
-7.9 |
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Other services (core forms of activity) |
35 |
57 |
-38.6 |
|
TOTAL (revenue): |
16,112 |
15,764 |
2.2 |
Headline IFRS financial indicators (RUR, mln)
The change in revenue is attributable to the following factors:
- An increase in revenue from broadband Internet access.
- The main growth driver was a rise in the broadband Internet subscriber base. In Q2 2009 VolgaTelecom introduced completely unlimited traffic plans (with no threshold values for consumption of external traffic); the existing conventionally unlimited tariff plans were revised in view of raising speed and enlarging the limit. As a result of active marketing policy, the number of broadband ports as of the end of H1 2009 stood at 904,000, which is 70% more than in the same period last year.
- An increase in revenue from local telephony by way of current payments. Pursuant to a decision by RF Federal Tariff Service (Order No. 305-s/10 dated November 28, 2008) effective March 1, 2009 new local telephony tariffs were introduced by VolgaTelecom. At the same time, the company’s policy, which aims to raise user loyalty, made it possible to maintain its subscriber base, which has reached 4,780,000 users.
- A contraction in revenue from cellular services was attributable to the global economic downturn and a crisis in the Russian economy, which led to a reduction in the consumption of global traffic by subscribers in non-market segments, the migration of subscribers to more economic tariffs, which, on the whole, led to a reduction in the pace of revenue growth. The company’s cellular subscriber base increased by 2.2% during the reporting period. The total number of the company’s subscriber base stood at 3,623,000.
- The slowdown rate in intrazonal traffic, which was projected on the basis of mobile substitution trends in recent years, turned out to be lower than the forecasted level, due to the effects of the crisis and a reallocation of traffic between cellular and fixed-line networks, which enabled the company to mitigate its loss of revenue from zonal services.
The pace of increase in operating expenses stood at 99.5% in the first six months of 2009 and the total amount of decreased totaled RUR 12,685.
A decrease in operating expenses during the reporting period was due to the following factors:
- The optimization of expenses for materials, repair and maintenance, amounting to RUR 172 mln compared to the same period in 2008 as part of the anti-crisis measures worked out by the company;
- A reduction in interconnect expenses payable to operators to RUR 1,770 mln (6% down compared to the same period in 2008). One of the reasons behind this expense trend is the optimization of expenses for services related to the provision of Internet resources (settlements with external providers are carried out as part of traffic transmission, the expansion of which is dependent on a reduction in expenses in settlements per 1MB of external traffic).
- A decline in other expenses.
Expenses
|
Type of Expense, RUR, mln |
1H2009 |
1H2008 |
Change, % |
|
Payrolls |
4,341 |
4,283 |
1.4 |
|
Depreciation and amortization |
3,713 |
3,242 |
14.5 |
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Expenses payable to telecom operators |
1,770 |
1,883 |
-6.0 |
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Materials, repair and maintenance, utilities |
1,269 |
1,341 |
-5.4 |
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Other operating expenses |
1,592 |
1,996 |
-20.2 |
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Total operating expenses |
12,685 |
12,745 |
-0.5 |
The full version of VolgaTelecom’s IFRS statement can be viewed at http://www.vt.ru.
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