The largest digital services provider in Russia

Rostelecom today announced its 2002 full year results in accordance with RAS

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  • As per preliminary data, in 2002 Rostelecom’s domestic long-distance traffic (DLD) grew by 15.5%, international outgoing traffic (ILD) — by 14.1%, international incoming traffic — by 12%;
  • Revenue, including effects of the new method of accounting for operations with international operators, increased by 32.1% to RUR 25,408.8 mn;
  • Without the effects of the new accounting method, revenue amounted to RUR 20,542.1 mn, or 6.8% higher than in fiscal year 2001;
  • Operating profit grew by 37.6 % year-on- year to RUR 7,720.1 mn;
  • Net profit totaled RUR 3,095.4 mn, 38,6% higher than in 2001.

Domestic long-distance (DLD) traffic (as per preliminary data) increased by 15.5% year-on-year to 7,136 million minutes. 2002 DLD revenue growth was 25.9% in ruble terms to RUR 8,774.7 mn compared to 2001.

Outgoing international (ILD) traffic (as per preliminary data) increased by 14.1% to 1,234.6 million minutes. Rostelecom’s ILD revenue from Russian clients and operators decreased by 4.3% to RUR 7,972.9 mn compared to 2001.

In 2002 incoming international traffic (as per preliminary data) totaled 973.3 million minutes, growing 12% from 2001 figures. Revenue from international operators (from voice traffic termination) amounted to RUR 4,061.2 mn.

As we have stated earlier, in 2002 the Company introduced a new method of accounting for operations with international operators in its RAS financial statements: whereas in previous reporting periods the Company reported net revenues from international operators in its RAS financial statements, i.e. revenues after deduction of payments to international operators for the outgoing international traffic, in 2002 full-year RAS financials Rostelecom reports the total amounts of both revenues from and payments to international operators.

Total revenue for 2002 was RUR 25,408.8 mn, growing by 32.1% compared to 2001. Excluding effects of the new method of accounting for operations with international operators, revenue totaled RUR 20,542.1 mn — 6.8% higher than in 2001.

2002 operating costs increased by 29.9%, including effects of the new method of accounting for operations with international operators, amounting to RUR 17,688.6 mn. Net of the above-mentioned effects, operating costs totaled RUR 12,761.3 mn — 6.3% lower than in 2001.

Depreciation was down by 24.2% to RUR 4,663.2 mn as Rostelecom stopped applying the accelerated depreciation rate (2) and a number of leased assets fully depreciated. EBITDA increased by 5.3% to RUR 12,383.3 mn.

Growth in the operating profit was 37.6% year-on-year with operating profit reaching RUR 7,720.1 mn. Net of the effects of the new method of accounting for operations with international operators operating profit amounted to RUR 7,780.8 mn, increasing by 38.6% year-on-year.

2002 results from other operating activities totaled RUR 441.1 mn, including profit from the sale of the Company’s 50% stake in Sovintel in the amount of RUR 3,024.3 mn as well as bad debt expenses in the amount of RUR (1,722.1) mn.

Results from other non-sales activities amounted to RUR (2,874.9) mn, including RUR (762.4) mn of foreign exchange losses, RUR (556.5) mn of past years’ losses on operations with international operators, and RUR (897.6) mn of past years’ interest expenses related to construction in progress.

As a result, 2002 net profit surged by 38.6% to RUR 3,095.4 mn compared to 2,232.9 mn in 2001.