OJSC North-West Telecom released its financial and business performance results for 9 months of 2008 according to the Russian Accounting Standards. Revenue amounted to RUR 18 102 027 thousand, including RUR 16 813 543 thousand from communications services. As compared with the same period of the last year, revenue increased by 3.8%, with a 4.0% rise in the revenue from communications services.

The main revenue drivers were: revenue from new services (Internet access and data transmission) and revenue from intra-zonal access. According to the results of 9 months of 2008, revenue from new services reached RUR 3 010 652 thousand, 50% up as against the same period of the last year. Revenue from intra-zonal access increased by 8.5% to RUR 1 762 498 thousand. In addition, revenue from lease of assets rose 33.2% as against the same period of the last year to RUR 687 875 thousand, thus greatly contributing to the overall income growth.

NWT’s costs for 9 months 2008 amounted to RUR 14 367 406 thousand, 18.7% up as against 9 months of 2007.

The operating profit for 9 months of 2008 reduced 29.9% as against the same period of the last year to RUR 3 734 621 thousand. The main reduction purposes were: launch of a large-scale project for the provision of the universal communications service as well as greater amortization expenses in connection with an active investment policy and commissioning of a large volume of fixed assets. Over 9 months of 2008, the amortization charges in respect of fixed assets rose 39.5% to RUR 3 027 957 thousand.

The profit on other incomes and expenses for 9 months of 2008 amounted to RUR 1 158 656 thousand, that is RUR 2 287 849 thousand up as against the same period of the last year, mostly because the reports for 9 months of 2008 reflected incomes from compensation of the loss from the universal service for RUR    1 400 146 thousand, and the one-time property revaluation up to the market price for RUR 872 717 thousand in respect of property transferred as an additional contribution to the authorized capital of the subsidiary Svyazist RPK LLC.

EBITDA* for 9 months of 2008 was equal to RUR 8 305 897 thousand, 18.8% up as against 9 months of 2007, showing stable positive trends. At the end of the 3rd quarter of 2008, the EBITDA margin reached 45.9%, 5.8 p.p. greater than in 2007.

NWT’s net income amounted to RUR 3 791 165 thousand, 25.2% up as against the same period of the last year.

* EBITDA is calculated according to the following formula: “before-tax profit (loss)” + “interest payable” – “interest receivable” + “depreciation and amortization of fixed assets” + “leasing expenses”.

The Balance Sheet and Profits and Losses Statement of North-West Telecom for 9 months of 2008 are posted on the NWT corporate website, Economics and Finance section.