·      As per preliminarily data during the first nine months of 2002 domestic long-distance traffic volume grew by 17%, international outgoing – by 11% compared to the same period a year ago;

·      Revenue* was up 6.2%**, reaching RUR 15,184.06 mn;

·      Growth in operating profit was 43% over a year ago, with operating profit amounting to RUR 6,120.3 mn;

·      Net profit amounted to RUR 4,900.8 mn, almost threefold higher than in the first nine months of 2001.  

As per preliminarily data, domestic long-distance traffic was up 17% versus first nine months of 2001, reaching 5,102 million minutes.  Growth in DLD revenues was 38.3% over a year ago.  DLD revenues reached RUR 6,346.9 mn. 

As per preliminarily data, growth in international outgoing traffic was 11% with traffic reaching 928 million minutes.  Rostelecom outgoing ILD revenues remained almost unchanged compared to the same period a year ago totaling RUR 5,959 mn.   

Total revenue reached RUR 15,184.06 mn, which is 6.2% higher than for the same period last year. 

Operating costs during the first nine months of 2002 declined by 9.5%, amounting to RUR 9,063.7 mn.  Depreciation decreased by 19.5% to RUR 3,717.8 mn, EBITDA increased by 10.6%. 

Operating profit surged by 43% to RUR 6,120.3 mn. 

Growth in other operating revenues by 150% is explained mostly by profit from Sovintel deal in the amount of RUR 3,025.6 mn.  Other operating expenses increased by 49% to a large extent due to bad debt expense of over RUR 600 mn. 

Net profit increased by 173% to RUR 4,900.8 mn.  Disregarding the effect from Sovintel transaction and bad debt expense, net profit would be RUR 2,996.4 mn or 67% higher than a year ago.

* Excluding VAT
** Not adjusted for inflation 

Certain statements in this press-release are “forward-looking statements” within the meaning of the U.S. federal securities laws and are intended to be covered by the safe harbors created thereby.

These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. 

These risks include the risk of changes the Company’s operations and business prospects, the general financial and economic circumstances,  relating to regulation of the Russian telecommunications industry and the Russian legislation; the competition and other risks.

For a more detailed discussion of these and other factors, see the Company’s Annual Report on Form 20-F for its most recently completed fiscal year and the Company’s other public filings with The U.S. Securities and Exchange Commission.  Many of these factors are beyond the Company’s ability to control or predict.  Given these and other uncertainties, the Company  cautions not to place undue reliance on any of the forward-looking statements contained herein or otherwise. 

The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as maybe required under applicable the U.S. federal securities laws.

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