THE FINANCIAL RESULTS OF ROSTELECOM FOR H1 2009 UNDER RAS WERE NOT SO BAD
• In H1 2009, the revenue remained the same as in H1 2008. An 11% y-o-y increase of operating expenses had a negative influence on operating profit. As we mentioned in our previous comment, in H1 2008 Rostelecom reported 440 million Rubles profit from the sale of financial investment. In H1 2009, no such gain was reported. Instead, other losses totaled 575 million Rubles. As a result, profit before tax in H1 2009 decreased by more than two times and totaled 2995.6 million Rubles. Net profit in H1 2009 totaled 2364 million Rubles versus 4983 million Rubles in H1 2008.
• We believe that decrease in profit was caused by difficult market conditions and consumers “saving mode” behavior. H1 2009 seemed to be the hardest time for Russia’s economy since the crisis of 90s. We do not consider Rostelecom’s results to be negative because the company managed to keep their revenue at the same level. Besides, the first half of 2009 witnessed an increase in the share of innovative services in Rostelecom’s total revenues and compared to the first half of 2008, the share of data and intelligent network services approximately doubled and amounted to 10% of the total revenue. We believe that the share of this segment will increase even more because this segment has good growth possibilities in Russia. We expect that Rostelecom’s future financial results will be more positive and net margin will be improved.
Read our comment and more in our new report - Rostelecom (Ros), Comment on ROS´ Latest Events, Forecast on Growth and Risk 8/25/09
• In H1 2009, the revenue remained the same as in H1 2008. An 11% y-o-y increase of operating expenses had a negative influence on operating profit. As we mentioned in our previous comment, in H1 2008 Rostelecom reported 440 million Rubles profit from the sale of financial investment. In H1 2009, no such gain was reported. Instead, other losses totaled 575 million Rubles. As a result, profit before tax in H1 2009 decreased by more than two times and totaled 2995.6 million Rubles. Net profit in H1 2009 totaled 2364 million Rubles versus 4983 million Rubles in H1 2008.
• We believe that decrease in profit was caused by difficult market conditions and consumers “saving mode” behavior. H1 2009 seemed to be the hardest time for Russia’s economy since the crisis of 90s. We do not consider Rostelecom’s results to be negative because the company managed to keep their revenue at the same level. Besides, the first half of 2009 witnessed an increase in the share of innovative services in Rostelecom’s total revenues and compared to the first half of 2008, the share of data and intelligent network services approximately doubled and amounted to 10% of the total revenue. We believe that the share of this segment will increase even more because this segment has good growth possibilities in Russia. We expect that Rostelecom’s future financial results will be more positive and net margin will be improved.
Read our comment and more in our new report - Rostelecom (Ros), Comment on ROS´ Latest Events, Forecast on Growth and Risk 8/25/09
