- Revenue for the first half of 2009 amounted to RUB 30,547.3 million which is at an equivalent level compared to the corresponding period last year;

- Revenues from data transmission and telematic services more than doubled year on year to RUB 2,539.4 million;

- OIBDA*  decreased by 36.1% year on year to RUB 5,778.3 million, representing an OIBDA margin of 18.9%; 

- First half 2009 net profit totaled RUB 2,364.4 million representing a year on year decrease of 52.6%.

Moscow – August 5, 2009 – Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia’s national telecommunications operator today announced its unaudited first half 2009 results in accordance with the Russian Accounting Standards (RAS).

Rostelecom’s first half 2009 revenues totaled RUB 30,547.3 million which represents a marginal decrease of 0.1% year on year. The first half of 2009 witnessed an increase in the share of innovative services in Rostelecom’s total revenues and compared to the first half of 2008, the share of data and intelligent network services approximately doubled and amounted to 10% of the total revenue.

Domestic long-distance (DLD) traffic for the reporting period decreased 5.0% year on year to 4,758.3 million minutes** . First half 2009 DLD & interconnection revenues totaled RUB 13,255.3 million which represents a year on year decrease of 10.2%.

Outgoing international long-distance (ILD) traffic saw a decrease of 7.9% year on year to 862.7 million minutes. ILD revenues from Russian operators and subscribers amounted to RUB 5,630.4 million a decrease of 3.6% compared to the first half of 2008.

The decrease in DLD and OILD traffic and revenue is primarily attributable to the influence of the economic crisis, the growing competition in the long-distance market and the continued migration of long-distance traffic from fixed-line to mobile networks.

For the first half 2009, incoming ILD traffic terminated in Russia decreased by 3.5% year on year while transit traffic from international operators saw a substantial increase of 66.4%. In total, incoming ILD traffic amounted to 1,728.1 million minutes representing a year on year increase of 12.0%. Revenues from international operators for incoming ILD traffic transit and termination rose 21.6% year on year to RUB 3,362.8 million.

Rostelecom’s first half 2009 revenue from other business segments grew by 15.0% year on year to RUB 8,298.8 million. The Company delivered a 1.7 fold increase year on year in revenues from innovative services, including data and intelligent network, to RUB 3,062.0 million. Revenues from data transmission and telematic services totaled RUB 2,539.4 million which represents a dramatic 2.2 fold increase when compared to the corresponding period last year.

Rostelecom’s operating expenses for the accounting period amounted to RUB 26,975.9 million representing a year on year increase of 11.1%. Among other factors, this increase was attributable to the higher payments made to international operators as a results of the Russian Rouble devaluation and growth in international transit traffic.

Depreciation for the first six months of 2009 amounted to RUB 2,206.9 million. The 3.2% increase compared to the same period last year is a result of property, plant and equipment additions during 2008.

Operating Income before Depreciation and Amortization (OIBDA) amounted to RUB 5,778.3 million which is a year on year decrease of 36.1%. OIBDA margin amounted to 18.9% compared to 27.6% in the corresponding period last year.

First half 2009 operating profit decreased by 43.4% year on year to RUB 3,571.4 million.

Other gains and losses for the first six months of 2009 totaled a net loss of RUB 575.8 million compared to a net gain of RUB 310.9 million a year ago. There are a number of factors that this loss is attributable to, firstly, provision for allowances contrary to their recovery in H1 2008 as well as the loss from the sale of investments compared to a RUB 440 million net gain on the sale of Golden Telecom’s shares in H1 2008.

As a result, Rostelecom’s first half 2009 net profit amounted to RUB 2,364.4 million, down 52.6% year on year.

* OIBDA is calculated as total revenues less operating expenses excluding depreciation.

** All traffic data provided in the press release is preliminary.