Rostelecom to cut spending, lower effect of depreciating ruble on capex
MOSCOW. Nov 19 (Interfax) - OJSC Rostelecom intends to devote next year to cost optimization and take steps to smooth out the negative effect of the depreciating ruble on the company's capex program.
"The [macroeconomic] situation is becoming worse. That's why what we're planning to do as much as possible next year is manage costs," Rostelecom President Sergei Kalugin said during a conference call on Tuesday.
He added dividends might increase next year if the board of directors and Rostelecom's main shareholder, the state, agree with this.
Kalugin said the company was looking for new suppliers "in order to cut costs denominated in dollars and euro as much as possible." In addition, "substantial elements of the network" are already being procured from Russian producers. Rostelecom is working on the efficiency of procurements and optimizing the architecture of networks. Such measures will allow for the negative effect of the depreciating ruble on capex to fall, Kalugin told journalists on Tuesday.
Rostelecom saw capex fall 18% in January-September 2014 to 32.3 billion rubles, or 14.7% of revenue. The company expects the ratio to be at 20%-22% for 2014 as a whole.
Kalugin also said the operator would finish the massive construction of fiber optic broadband networks next year. As a result, Rostelecom will lower the capex-to-revenue ratio starting in 2016 and increase cash flow.