Rostelecom announced its six months 2002 results in accordance with Russian Accounting Standards

• During the first six months of 2002 domestic long-distance traffic volume grew by 13.3%, international outgoing — by 10.4% compared to the same period a year ago;
• Revenue* was up 10.4%**, reaching Rbl 9 963 mn;
• Growth in operating profit was 72% over a year ago, with operating profit amounting to Rbl 4 073 mn;
• Net profit amounted to Rbl 1 584 mn or 53% higher than in the first half of 2001.

Domestic long-distance traffic was up 13.3% versus H1 2001, reaching 3 302.4 million minutes. DLD revenues increased by 43.4%, with revenues from regional operators growing by 92.3%.

Growth in international outgoing traffic was 10.4% over a year ago with traffic reaching 580.8 million minutes. Rostelecom revenues for ILD services offered to end-users and operators in Russia were up 1.2% compared to the same period a year ago.

The key constraint of ILD revenues growth was a decline in international traffic volumes from end-users in Moscow. At the same time, the Company saw steady growth in international traffic from Russian operators — by 28.3% over a year ago. ILD revenues from local operators increased by 22%.

Total revenue reached Rbl 9 963 mn, which is 10.4% higher than last year. Operating costs during the first six month of 2002 declined by 11.5%, amounting to Rbl 5 890 mn. Depreciation decreased by 17%, EBITDA was up 21.5% or Rbl 6 652 mln.

Operating profit reached Rbl 4 073 mn increasing by 72% over a year ago. As the Company introduced a more conservative approach towards bad debts, provision for bad debts was formed in the amount of over Rbl 500 mn in H1 2002 RAS financial statements.

This fact accompanied by foreign exchange loss on the Company JPY-denominated debt led to a slower net profit growth. Net profit for the first six months of 2002 increased by 53% compared to the same period a year ago and amounted to Rbl 1 584 mn.

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

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