North-West Telecom JSC has issued the results of its business activities for the 1st half of 2008 according to the Russian Accounting Standards. Revenue from sales amounted to RUR12,078,234 thousand, including RUR 11,237,720 thousand from core business. Revenue from sales increased by 4.1%compared to the same period of the last year, including the increase of 4.3% from communication services.  

The main revenue growth drivers were revenue from new services (Internet and data transmission) and revenue from intra-zonal access, which, as compared to the same period of the last year, have grown by 48.4% and 7.9% respectively. In absolute terms the revenue from new services in the 1st half of 2008 amounted to RUR 2,075,397 thousand and revenue from intra-zonal access amounted to RUR 1,157,761 thousand.

Costs of North-West Telecom in the 1sthalf of 2008 amounted to RUR 9,171,318 thousand, having grown by 13.5% as compared to the 1st half of 2007.

Operating income for the 1st half of 2008 decreased by 17.5% as compared to the same period of the last year and amounted to RUR 2,906,916 thousand.

The decrease of the operating income as compared to the same period of the last year is accounted for by the increase of the expenses for depreciation in connection with the huge investment policy of the Company and the introduction of a large number of fixed assets. In the 1st half of 2008 depreciation increased  by 38.9% and amounted to RUR 1,965,880 thousand.

EBITDA for the 1st half of 2008 amounted to RUR 6,171,662 thousand, having exceeded the ratio for the 1st half of 2007 by 31.8%. The EBITDA margin reached 51.1%, which was 10.7 p.p. higher than in the 1st six months of 2007.

Net income of North-West Telecom JSC amounted to RUR 3,147,530.6 thousand, which is 51.7% more than for the same period of the previous year. Such a significant increase of the net income is accounted for both by factors of OJSC N.W. Telecom's core activities (strengthening the position in the market of broadband access, retaining a stable telephony subscriber base, getting a compensation from the universal service fund) and by the increase of the contribution to the authorized capital of LLC RPK Svyazist.

“Svyazist” Recreation and Disease Prevention Centre” Limited Liability Company is a 100% subsidiary of North-West Telecom, it provides services of recreation and health care at health resort centers.  

*EBITDA is calculated  according to the following equation: "profit (loss) before taxes + "interest payable" – "interest receivable" + "wear and depreciation of fixed assets" + "expenses for leasing"

The Accounting Balance Sheet and the Profit and Loss Report of North-West Telecom JSC for the 1st  half of 2008  have been published on the corporate site of NWT in the Economics and Finance section.