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9M 2007 Financial and Operational Results under RAS

07.11.2007

Ekaterinburg – November 07, 2007 – Uralsvyazinform (RTS: URSI/URSIP, ADR: UVYZY/ UVYZYP), the leading carrier of fixed-line and mobile services in the Urals region, Russia reports the unconsolidated financial and operational results for the first 9 months of 2007 prepared under Russian Accounting Standards (RAS).

Revenues increased by 24.9% on 9M 2006 and totaled US$ 1.1 bln. The revenue growth is mainly due to revenue gains in:
- Mobile services (+29.3% on 9M 2006);
- New services (up 65.4%);
- Intrazone calls (up 54.8%).
EBITDA[1] increased by 31.3% on 9M 2006. EBITDA margin totaled 36.1%. Operating margin – 24.8%.
Net profit increased by 46.1% and reached US$ 132.1 mln. Net margin totaled 11.8%.
Subscriber base totaled 8.5 mln., including 4.8 mln. GSM mobile subscribers.

Operational and financial highlights:*

Financial	9M 2007	9M 2006	Change, %
Revenues, US$ mln*	1,120.0	896.7	+24.9%
Costs, US$ mln	842.4	664.0	+26.9%
EBITDA, US$ mln	404.3	307.9	+31.3%
EBITDA margin	36.1%	34.3%	-
Operating profit, US$ mln	277.6	232.7	+19.3%
Operating margin	24.8%	25.9%	-
Pre-tax profit, US$ mln	190.3	130.7	+45.6%
Net profit, US$ mln	132.1	90.4	+46.1%
Net margin	11.8%	10.1%	-
Operational	30/09/2007	30/09/2006	Change, %
Subscriber base
Fixed-line subscribers, mln	3.7	3.7	+1.1%
Mobile (GSM) subscribers, mln	4.8	4.3	+13.9%
Broadband subscribers, thous	235.5	61.7	+281.7%
Digitalisation of fixed-line networks, %	74.6%	73.0%	-
Telephone penetration
Fixed lines, %	27%	27%	-
Mobile, %	> 100%	89%	-
Number of employees	26,747	31,738	-16.0%

* Here and henceforth currency conversions are based on average exchange rates: 9M 2007 – RUR 25.8, 9M 2006 – RUR 27.3
[1] EBITDA is calculated as a sum of pre-tax profit, interest payable, depreciation of fixed assets, leasing payments less interest receivable.

Anatoly Ufimkin, CEO comments on 9M 2007 results: "The last day of the 3rd quarter happened to be the birthday of our interregional company. This year saw our 5th anniversary. Consolidation of strength, possibilities and resources of 7 formerly independent regional operators had a great impact on company development. Five years ago we had 2 952.0 thous. fixed-line subscribers and only 445.0 thous. mobile subscribers. At present our subscriber base reached 3 687.0 thous. fixed-line and 4 843.0 thous. mobile subscribers. The company had a great success on mass broadband market: 2006 started with 17.0 thous., at present we have 236.0 thous. Internet subscribers. Finally, 5 years ago company market value was US$ 480.0 mln., at present we have it at US$ 2 402.0 mln. Generally, 9M 2007 results show further dynamic development of the company. Revenue growth was mainly influenced by non-regulated telecom services (54.0% of growth): mobile services (37.0%) and data transmission services (17.0%). At the same time we work on optimization of personnel and social benefits expenses (-0.5%). As a result, net profit increased by 46.1%".

Please download full PDF version to continue with Financial Overview 9M 2007

To view complete accounting statements of Uralsvyazinform as of 9M 2007 under RAS please go to Financial Results section

For additional information, please contact IR department on tel. +7 343 379 1219, +7 343 379 1859 or e-mail: investor@gd.usi.ru.
The most recent company information is also available from this website and www.skrin.ru (complex disclosure information system) or URSI_RU page in Bloomberg system and URSI.RTS page in Reuters system.