Bloomberg News

Golden Telecom Profit Rises 14% on More Subscribers

August 03, 2006

Golden Telecom Inc., a Nasdaq-listed phone and Internet services provider in the former Soviet Union, said second-quarter profit rose 14 percent as company added clients and expanded services including broadband Internet.

Net income rose to $22.6 million, or 62 cents a share, from $19.8 million, or 54 cents, a year earlier, the Moscow-based company said today in a regulatory statement. Sales climbed 19 percent to $197 million. The figures were reported under U.S. generally accepted accounting principles.

In business and corporate services, Golden Telecom's largest line of business, sales rose 17 percent to $113 million because of demand for wireline services driven by economic growth in Russia, Ukraine and other former Soviet countries, regional expansion and as the company sold additional services.

``The results are amazing, above our expectations and that of the market,'' said Stanislav Yudin, a telecommunications analyst with UralSib Financial Corp. in Moscow.

Golden Telecom shares rose 3.7 percent to $25.51 in New York at 11:21 a.m. local time.

The company's second-quarter earnings before interest, taxes, depreciation and amortization, or Ebitda, increased 15 percent to $57.9 million. Ebitda as a percentage of sales, a profitability measure tracked by analysts, fell to 29 percent in the quarter from 31 percent a year earlier.

Golden Telecom is 20 percent owned by Norway's Telenor ASA (TEL), while Russian billionaire Mikhail Fridman's Alfa Group owns 29 percent. OAO Rostelecom, Russia's biggest long-distance phone provider, held 11 percent as of March 31.

To contact the reporter on this story: Lyubov Pronina in Moscow at lpronina@bloomberg.net

To contact the editor responsible for this story: Lars Klemming at lklemming@bloomberg.net


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