Bloomberg News

Rostelecom Net Triples to 2.42 Billion Rubles on Sale of Unit

February 10, 2005

OAO Rostelecom, Russia's dominant long-distance telephone operator, said profit more than tripled amid higher demand for phone services and after it sold its stake in an unprofitable unit.

Net income soared to 2.42 billion rubles ($86 million) from 792 million rubles in the year-earlier period, based on international accounting standards, the company said in an e- mailed statement. Sales rose 33 percent to 17.96 billion rubles.

The Moscow-based company said profit rose in part because it sold a stake in RTK-Leasing in the fourth quarter of 2003 and stopped consolidating the unit's losses. The sale of the stake also enabled the company to pay down debt and reduce interest payments, the statement said.

Domestic long-distance traffic increased 11 percent and outgoing international long-distance traffic grew 17 percent, the company said.

Russia's economy is growing for the seventh straight year, increasing the need for business communications and enabling individuals to spend more on private calls.

To contact the reporter on this story: Todd Prince in Moscow at Tprince2@bloomberg.net.

To contact the editor responsible for this story: Lars Klemming at lklemming@bloomberg.net Zimri Smith at zsmith@bloomberg.net Tim Coulter in London at tcoulter@bloomberg.net.


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