North-West Telecom JSC released its financial and economic results for the 1st six months of the year 2009 according to the International Financial Reporting Standards (IFRS). The intermediate consolidated financial reports have not been audited.

According to the IFRS, revenue from sales for the 1st 6 months of 2009 increased by 4.7% YoY and amounted to RUR 13,035 million, expenses having increased by 15.3% and amounted to RUR 12,164 million, while the operating income in fact did not change, having amounted to RUR 2,717 million. The outstripping growth of expenditure as compared to revenue is mainly accounted  by the increase in the depreciation and amortization costs (+20%YoY) due the large-scale investment programme implemented in 2008 and with the increase in the Company’ costs in materials, maintenance and utilities (due to the growth of the rates for services of the natural monopolies).

Income from data transmission services and Internet (new services) showed the largest growth within the revenue. In the 1st 6 months of 2009 it reached RUR 2,535 million, which is 20.8% higher than in the 1st 6 months of 2008. The increase of the income from new services shows that the pro-active expansion of N.W. Telecom into the broadband access market in the Northwestern Federal District continues. Another important factor is the income from the intra-zonal communication that grew up by 9.7% YoY, mainly due to the growth of the income from providing communication channels for use. So NWT continues to show a successful promotion of services in the C2C segment.

North-West Telecom's net income for the 1st half of 2009 according to the IFRS amounted to RUR 1,219 million, EBITDA* for the 1st 6 months of 2009 reached RUR 5,642 million, while the EBITDA margin amounted to 43.3%, which confirms the high efficiency of N.W. Telecom's business.   

*EBITDA is calculated according to the following equation: "Profit (loss) before taxes from the ongoing operations for the reporting period" + " depreciation and amortization" + "financial expenses" - "interest income on financial assets" - "interest income on pension plan assets".