Net income (GLDN:US) climbed to $74.4 million, or $1.85 a share, from $24.2 million, or 66 cents, a year earlier, the Moscow-based company said in a U.S. regulatory filing today. That beat the $69 million median estimate of seven analysts (GLDN:US) in a Bloomberg News survey. Sales rose 53 percent to $350.4 million.
Golden Telecom, whose biggest shareholder is billionaire Mikhail Fridman's Alfa Group, will spend more than $1 billion over the next four years to expand its fiber-optic network in Russia and meet increasing demand. Revenue from corporate contracts (GLDN:US) jumped 47 percent in the quarter.
``Sales grew above expectations but there is a certain concern about profitability,'' Konstantin Belov, an analyst with Moscow-based Uralsib Financial Corp., said in a telephone interview today.
Results were helped by $41.3 million proceeds from the July sale of a 23 percent stake in mobile-phone company MCT Corp. for $48 million. The figures were reported under U.S. generally accepted accounting principles.
Golden Telecom shares (GLDN:US) rose 1 percent to $102 at 11:54 a.m. in New York, valuing the company at $4.1 billion.
Analysts had estimated revenue would rise 52 percent to $348 million. Golden Telecom sells services to telecommunications operators, other companies and consumers in Russia, Ukraine, Kazakhstan and Uzbekistan.
Revenue from corporate contracts (GLDN:US), the company's main business, rose to $190.9 million. Carrier and operator sales increased 51 percent to $129.2 million. Consumer Internet revenue more than doubled to $22.8 million and mobile services more than tripled to $7.5 million.
The company also received $20.4 million in cash from OAO Rostelecom, Russia's largest long-distance calls provider, which acquired 392,988 shares of Golden Telecom.
Golden Telecom's earnings before interest, taxes, depreciation and amortization increased 35 percent to $85.1 million. Analysts estimated third-quarter Ebitda at $96.1 million. Ebitda as a percentage of sales, a profitability measure tracked by analysts, fell to 24 percent from 28 percent a year earlier.
Golden Telecom raised its forecast for full-year sales to high-40s percent, up from mid-40s percent. Ebitda growth is forecast at about 40 percent, the company said. It predicted further growth of revenue in the mid-30s percent and Ebitda at mid-40s percent in 2008.
The company has 394,900 broadband Internet subscribers in Russia and plans to become the leading broadband company in Russia and other former Soviet countries.
Golden Telecom's more than $1 billion expansion program for its fiber-optic networks in Russia will reach out to 65 cities with a total population of 65 million. The company has begun construction in 24 cities and expects to deploy networks in the remaining cities much faster, Chief Executive Officer Jean- Pierre Vandromme said today in a conference call.
Vandromme said the company is looking to roll out networks in other cities that were not on its original list. Golden Telecom is targeting six big cities in Ukraine besides Kiev, as well as Tashkent, Uzbekistan, and Almaty and Astana in Kazakhstan, he said.
Corbina Telecom, a Moscow-based broadband Internet provider that Golden Telecom bought (GLDN:US) in May, contributed approximately $30 million to consolidated revenue.
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