• Revenue for the first nine months of 2007 increased by 6.4% to RUB 46,541.4 million.
• Domestic long-distance traffic rose 2.0%* year on year. Outgoing international traffic decreased by 0.7 % and incoming international traffic increased 24.8%.
• EBITDA** rose by 21.8% to RUB 11,044.7 million, representing an EBITDA margin of 23.7%. 
• Net profit for the first nine months of 2007 amounted to RUB 8,844.8 million.

Moscow – November 1, 2007 – Rostelecom (NYSE: ROS; RTS, MICEX: RTKM, RTKMP), Russia’s national long-distance telecommunications operator, today announced unaudited results for the first nine months of 2007 in accordance with Russian accounting legislation (RAS).

Rostelecom’s revenues for the first nine months of 2007 totaled RUB 46,541.4 million - a year-on-year increase of 6.4%. 

Domestic long-distance (DLD) traffic for the first nine months of 2007 grew by 2.0% to 7,499.2 million minutes. First nine months 2007 DLD revenues increased by 0.4% and totaled RUB 23,093.7 million.

Outgoing international long-distance (ILD) traffic decreased by 0.7% to 1 415.7 million minutes. ILD revenues from Russian operators and subscribers amounted to RUB 9,440.0 million, down 3.0% year on year.

First nine months 2007 incoming ILD traffic totaled 2,221.3 million minutes - a year-on-year increase of 24.8%. Rostelecom increased its share of incoming international traffic, as the Company continued to leverage its strong market position. Revenues from international operators for incoming ILD traffic transit and termination rose 29.5% year on year to RUB 4,208.0 million.

Revenue from other business segments increased by 23.9% compared to for the first nine months of 2006 to RUB 9,798.9 million, reflecting the growth of new products and services. Rostelecom delivered increases in revenues from leased lines, intelligent network services, data transmission and telematic services as well as customer equipment servicing. For the first three quarters of 2007, revenues from leased line services grew 10.6% to RUB 5,824.8 million compared to the same period last year.

Rostelecom’s operating expenses for the accounting period amounted to RUB 38,349.7 million – a year-on-year increase of 3.5%.

Depreciation increased 20.0% year on year to RUB 2,853.0 million for the first nine months of 2007 as a result of significant additions of property, plant and equipment in 2006.

Thus, EBITDA for the first nine months of 2007 grew by 21.8% year on year to RUB 11,044.7 million, representing an EBITDA margin of 23.7%.

Operating profit amounted to RUB 8,191.7 million, up 22.4% compared to the same period last year.

Other gains and losses for the first three quarters of 2007 totaled RUB 3,524.8 million compared to RUB 16.1 million a year ago. The increase was mainly driven by a revaluation of the Company’s financial investments. Rostelecom recorded a RUB 3,476.8 million net revaluation gain for the first nine months of 2007 compared to a RUB 409.9 million net revaluation gain for the same period last year.

Rostelecom’s net profit for the first nine months of 2007 rose 76.7% and totaled RUB 8,844.8 million compared to RUB 5,044.6 million a year ago. 

* All traffic data provided in the press release is preliminary.
** Rostelecom reports  first nine months 2007 RAS revenue growth of 6.4% as EBITDA margin amounts to 23.7% EBITDA is calculated as total revenues less operating expense excluding depreciation.