Highlights:

-         Income from the sale of goods (work and services) - Rub 1.06 bn, which represents a 134.8% increase compared to the same period last year (Rub 787 mn);

-         Pre-tax profit - Rub 47 mn, which is 27.9% of the figure posted for the same period last year (Rub 167 mn);

-         Reporting period loss of Rub 26.5 mn, while net profit for the first six months of 2001 stood at Rub 94 mn).

The decrease in OJSC Sibirtelecom's profit for the reporting period resulted from the change in the methodology used to calculate the company's bad debt provisions, which was introduced in the second quarter of 2002.

As of June 30, 2002 the amount of bad debt provisions stood at Rub 167 mn (while it was Rub 21 mn at March 30, 2002).  A reserve fund has been established for the entire amount of the company's debts receivable for telecommunications services provided in all cases where there is a deadline of more than 90 days.  It should also be noted that the establishment of this reserve fund is provided for both under accounting and tax legislation (chapter 25 of the Tax Code, effective as of January 1, 2002) and meets the requirements of statutory accounting standards.

Use of this instrument should help enhance the reliability of OJSC Sibirtelecom's financial statements and build greater objectivity into the company's financial standing and business activities despite this poor 1-time performance caused by the reflection of bad debt provisions as operating expenses in the profit and loss statement for 1H 2002.

Planned Results for Q3 and Q4 2002:

-         Income from the sale of goods (work and services) - Rub 1.6 bn (for Q3 2002) and Rub 2.2 bn (FY 2002);

-         Net profit for the reporting period - Rub 59 mn (for Q3 2002) and Rub 145 mn (FY 2002);