North-West Telecom JSC releases financial and business results for 1st half of 2009 according to the Russian Accounting Standards.  

Revenue amounted to RUR 12,790 million, including RUR 11,815 million from communication services, so revenue increased 6% YoY, revenue from communication services 5,3% YoY.

The main revenue drivers were income from the Internet and data transmission services and income from intra-zonal access, which, grew by 21.2% YoY and 10.0% YoY respectively. In absolute terms the revenue from the Internet and data transmission in the 1st half of 2009 amounted to RUR 2,403 million and those from intra-zonal access to RUR 1,274 million .

Costs of North-West Telecom amounted to RUR 11,013 million in the 1st half of 2009, having increased by YoY.

The outstripping growth of costs have been accounted for by the significant increase of the depreciation and amortization cost which reached RUR 2,653 million (the growth as compared to the same period of the previous year amounted to 35%) due to the investment programme that was implemented in 2008 , by the growth of the expenses for the services of outside organizations (maintenance and repairs) mostly related to the provision of the universal service and the growth of the operation expenses ( electric energy and materials).

EBITDA* amounted to RUR 5,253 million in the 1st half of 2009, and the net income of North-West Telecom was RUR 1,606 million.

The decrease of EBITDA and net income as compared to the same period of the last year was accounted for by the macroeconomic factor , i.e. the significant forex losses (in the 1st half of 2009 the loss amounted to RUR 439 million against the profit of RUR 92 million in the 1st six months of 2008), and by the fact that the accounts and reports for the 1st half of 2008 included in their Other profit section the financial effect from the increase of the contribution to the authorized capital of CJSC RDPC “Svyazist”** in the amount of RUR 634 million.

At the same time, the efficiency of North-West Telecom's business has remained at a high level: thus, the EBITDA margin for the 1st six months of 2009 amounted to 41.1%.

*EBITDA is calculated according to the following equation: " profit (loss) before taxes + "interest payable" – "interest receivable" + "wear and depreciation of fixed assets " + "expenses for leasing".

** CJSC RDPC “Svyazist” is a 100% subsidiary of OJSC North-West Telecom, it provides services of recreation and health care at health resort centres.