OREANDA-NEWS. On 03 June 2009 Southern Telecommunications Company (STC) [(RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the No. 1 fixed-line operator in the South Federal District of Russia, announced its unaudited financial results for January-March 2009 compiled under Russian Accounting Standards (RAS).

The operator’s Q109 revenue totaled Rub 5.33 bln or 4.6% more than a year ago, while the cost side decreased 0.8% to Rub 3.93 bln.

Local voice revenue dipped 0.5% to Rub 2.33 bln (45.4% of the company’s telecom revenue mix) following the introduction of a per-minute billing system for local voice calls throughout the coverage area of Southern Telecommunications Company in January-March 2008 and subsequent adjustments by subscribers of their tariff plans.

Intrazonal revenue decreased by 5.4% to Rub 865.4 mln (16.9% of the company’s revenue mix) due to softening demand for F2F and F2M calls.

As the broadband Internet subscriber base doubled to 405,400 in January-March 2009, datacom and ISP earnings soared 39% to Rub 1.30 bln. Based on the first-quarter performance, the percentage of this revenue item in the company’s telecom revenue mix rose by 6.4% to 25.4%.

Interconnect and traffic transmission earnings declined 15% to Rub 503.1 mln (accounts for 9.8% of the operator’s telecom earnings) owing to structural changes in traffic and the cancellation by law effective March 1, 2008 of connection fees.

Q109 payroll expenses amounted to Rub 1.12 bln (28.6% of the company’s expenses), falling 9% compared to the year-earlier period.

Fixed asset depreciation jumped by 16.2% to Rub 1,007.4 mln (25.6% of the cost side).

Material expenses sank 20% to Rub 345.2 mln (8.8% of the expenses).

Interconnect expenses (including Rostelecom) rose 3.4% to Rub 450.1 mln (11.4% of the cost structure).

In view of the influence of the financial and economic crisis and negative exchange differences accrued in Q109 for a total of Rub 1.26 bln, the operator’s financial indicators tend to deteriorate.

Not including exchange rate differences, Southern Telecommunications Company’s EBITDA jumped by 11.6% to Rub 2.18 bln, while EBITDA margin rose 2.6% to 41%.

As a result of staff optimization measures compared to January-March 2008 the operator managed to lower the average headcount of operating personnel by 5.9% to 25,361 and improve lines per employee by 4.7% to 158.9 lines.

Southern Telecommunications Company’s Q109 capital investments totaled Rub 37.8 mln or 80.2% less than a year ago, while the local network digitalization rate rose 3.43% y-o-y to 72.32% at the beginning of 2009.