On August 4 long-distance phone operator Rostelecom published its 1H 2008 financials calculated to RAS.
The financial report shows that the trends observed in 2007 have continued this year. Revenue declined by 1%, as the company had to fend off aggressive newcomers on the market. In volume terms, the posted results were also discouraging. The company's international phone traffic slowed by 0.9%, with outbound international traffic dwindling by 2.8% y-o-y; and only the inbound international traffic picked up by 9.4% (traffic has likely increased on the overall growth of the market for long-distance phone services, and in no way reflects a rise in the company's market share).
A 4% rise in the OIBDA margin and a 1% increase in the net margin came as a pleasant surprise. In all likelihood, the management has begun a fight to make the company's operations more cost-effective. However, it will be possible to make a definite conclusion only after the company publishes its annual financial results, which are more objective.
Rostelecom: financial results for FY 2007 under IFRS
| | 1H2007 | 1H2008 | 1H2008/1H2007 |
|---|
| Revenue | 30.743 | 30.588 | -1% |
| OIBDA | 7.311 | 8.454 | 16% |
| OIBDA margin | 24% | 28% | 4% |
| Net profit | 4.691 | 4.984 | 6% |
| Net margin | 15% | 16% | 1%. |
Source: company data, Finam estimates
The financials reported are unlikely to have a tangible impact on the company's stock valuations. We believe that the company's current stock valuations must have been caused by investor activity and have nothing to do with the company's fundamental value.
0.569
0.073
