Rostelecom announced its full-year 2001 results in accordance with Russian Accounting Standards

In 2001 the Company considerably improved its production and financial results:

• Domestic long distance traffic volumes grew by 25%, international long distance — by 15%;
• Revenue* was up 14%** compared to 2000, reaching RUR 19 229.8 mn;
• Operating profit grew by 17% to RUR 5 612 mn;
• Net profit reached RUR 2 232.8 mn — 176% up year- on-year.

Due to further network development and modernization, domestic long distance (DLD) traffic was up 25% in 2001, while total DLD revenues increased by 26% year-on-year, amounting to RUR 6 968,8 mn.

An increase in the linear part of the Integral Settlement Rate (IST) used by Rostelecom for settlements with regional operators for DLD traffic transit represents an important event of the year — linear part of the IST was raised by 25% as of July 1, 2001 and by another 25% asof January 1, 2002. As a result, 2001 Rostelecom’s DLD revenues from regional operators were up 43% year-on-year.

The Company saw a 15% growth in the outgoing international long distance (ILD) traffic volumes, Rostelecom’s ILD revenues derived from Russian clients, including subscribers and operators, amounted to RUR 8 331 mn — up 12% year-on-year. Rostelecom’s total revenues reached RUR 19 229.8 mn — up 14% year-on-year. Operating costs came up to RUR 13 618 mn, growing by RUR 1 560 mn or by 13% compared to 2000.

The highest growth by 24% was seen in material costs, which is explained mainly by growth in energy and Russian producers’ prices.

Payroll costs rose by 13%, other expenses were up 16%.

Amortization amounted to RUR 6 151 mn or RUR 468 mn higher than in 2000. EBITDAmargin is equal to 61.2%.

Net assets amounted to RUR 16 708.9 mn as of the end of 2001. That is RUR 2 529 mnhigher than in 2000, mainly due to a decrease in the Company’s debt. Long-term loans and credits went down by 44% and reached RUR 9 338.9 mn as of the end of 2001.

Absolute liquidity ratio was 0.24 or 0.11 higher than in 2000.

Financial independence ratio amounted to 0.44, which represents a year-on-year growth of 0.09.

Rostelecom Headquarters Address: 14, 1st Tverskaya-Yamskaya street, Moscow, 125047, Russia

Phone: +7 (095) 972–82–83 Fax: (095) 787–28–50