- Audited 2008 full year revenue amounted to RUB 63,201.7 million;

- Outgoing international traffic grew by 11.2% year on year, whilst incoming international traffic increased by 8.0%  year on year;

- Revenues from data transmission and telematic services increased dramatically by 3.2 times year on year to RUB 3,117.1 million;

- OIBDA*  rose by 19.7% year on year to RUB 14,312.8 million, representing an OIBDA margin of 22.6%; 

- Net profit for 2008 amounted to RUB 7,072.0 million.

Moscow – April 2, 2009 – Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia’s national telecommunications operator, today announced its audited full year 2008 results in accordance with the Russian Accounting Standards (RAS).

Rostelecom’s revenues for 2008 increased by 1.0% year on year and totaled RUB 63,201.7 million despite the negative influence of the financial crisis in the forth quarter of 2008.

Under the changes in the fixed-line market structure, among other things attributable to the migration of DLD traffic from fixed-line to mobile networks, in order to provide customers with competitive tariffs the Company follows a flexible pricing policy resulting in maintaining DLD traffic volume along with the decrease in DLD revenues.

Domestic long-distance (DLD) traffic grew slightly year on year to 10,229.2 million minutes.

2008 full year DLD revenues totaled RUB 29,564.6 million.

Outgoing international long-distance (ILD) traffic rose 11.2% year on year to 2,024.1 million minutes. ILD revenues from Russian operators and subscribers amounted to RUB 12,084.5 million.

2008 incoming ILD traffic totaled 3,305.7 million minutes representing a year-on-year increase of 8.0%. Rostelecom continues to leverage its strong market position and has continued to increase its share of the incoming international traffic. Revenues from international operators for incoming ILD traffic transit and termination rose 12.9% year on year to RUB 6,451.8 million.

As Rostelecom continues to diversify its business, innovative services are substantially increasing their share of the Company’s total revenues in comparison to the traditional services provided by the Company.

Revenues from data transmission and telematic services saw a dramatic threefold increase of 3.2 times in 2008 compared to 2007, totaling RUB 3,117.1 million, while revenues from intelligent network services (INS) rose to RUB 1,212.4 million representing a year-on-year increase of 13.0%. 

Overall, Rostelecom’s 2008 revenues from new and value-added services, including data, leased lines, INS and customer equipment servicing among others, increased by 20.8% year on year to RUB 15,100.8 million.

Rostelecom’s operating expenses for the accounting period amounted to RUB 53,066.8 million representing a year-on-year decrease of 2.6%. 

Depreciation for the full year 2008 amounted to RUB 4,117.9 million. The 7.7% increase over the previous year is a result of property, plant and equipment additions during 2007.

OIBDA grew by 19.7% year on year to RUB 14,312.8 million, representing an OIBDA margin of 22.6%.

2008 full year operating profit amounted to RUB 10,134.9 million, up 25.5% year on year.

Other gains and losses for 2008 totaled RUB (576.3) million compared to RUB 4,517.0 million a year ago. There are a number of factors that this loss is attributable to, firstly, a reduction in the number of financial investments to be reevaluated following the sale of some financial investments during the first quarter of 2008. Additionally, negative market trends resulted in a decrease in the value for a number of companies that Rostelecom is invested in. Finally, the foreign exchange loss in the accounting period also impacted the overall results.

Therefore, Rostelecom’s 2008 full year net profit amounted to RUB 7,072.0 million.

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