5 Nov 2009 15:35

Volgatelecom boosts revenue 3% in 9 mths

NIZHNY NOVGOROD. Nov 5 (Interfax) - Volgatelecom , the incumbent fixed-line operator in the Volga region, posted revenue of 20.069 billion rubles in January-September 2009 under Russian accounting standards, 3.1% more than in the same period last year, the company said in a press release.

Net profit rose 23.5% to 3.177 billion rubles in the nine months.

Telecommunications services sales rose 3.1% to 19.069 billion rubles, EBITDA was up 17.1% to 9.032 billion rubles and the EBITDA margin was 45%.

The company posted higher revenue on Internet leased-line access services, with the main driver of growth coming from Internet broadband access, particularly in the home user segment. The broadband Internet subscriber base rose 43.2% in the third quarter year-on-year to 928,000 ports.

Revenue from local telephony services rose 3.9% in the nine months year-on-year to 8.529 billion rubles, mainly due to a rate indexation on March 1, 2009. Revenue from intrazonal telephony declined in the period as a result of mobile substitution and the overall decline in demand for services caused by the global financial crisis.

Expenditures rose 1.5% to 15.636 billion rubles and the depreciation and amortization expense was up 12.9% year-on-year, due to the investment program and the large amount of plant and equipment that was commissioned at the end of 2008. Fixed assets worth 1.09 billion rubles were commissioned in the first nine months of 2009.

Volgatelecom worked to cut spending on payroll, materials, repair and maintenance services by outside entities, security, consulting, information and other services from outside entities.

The decline in operator services costs reflects efforts by subscribers to economize during the crisis, the expansion of the company's proprietary intra-regional data transmission network and the reduction of costs for the transit of backbone Internet traffic.

Investment in the nine months totaled 714.5 million rubles, down from 3.193 billion rubles in the same period last year. The development of hi-tech, advanced telecommunications services (Internet broadband access, construction of NGN network) accounted for 59.2% of investment, up from 42.7% in the same period last year. Development of transmission lines and infrastructure received 146.7 million rubles in investment and traditional telephony - 45.8 million rubles.

Key indicators of Volgatelecom operations in January-September 2009 (mln rubles):

Jan-Sept 2009 Jan-Sept 2008
Sales revenue 20 068.98 19 459.254
Telecommunications services 19 068.9 18 497.5
Sales profit 4 433.116 4 047.067
Sales profit with due account for losses caused by universal service provision 5 224.9 4 673.2
Pretax profit 3 925.823 3 485.686
OIBDA 8 080.6 7 277.3
OIBDA margin (%) 40.3 37.4
EBITDA 9 031.6 7 711.1
EBITDA margin (%) 45 39.6
Net profit 3 176.6 2 572.8
Net profit margin (%) 15.8 13.2

Svyazinvest owns 51% of voting shares (38% of equity) in Volgatelecom.