MTS Sees Q2 Profits Up 30% to $659 Million

Russia's MTS has reports a 30% jump in its Q2 profits - to US$659 million along with a 34% rise in revenues to US$2.635 billion. The company also reported free cash-flow generation of $1.1 billion in the first half of 2008. As of June 30, 2008, MTS' total debt was at $3.3 billion.

Mr. Shamolin, President and Chief Executive Officer, commented, "MTS continues to execute on its corporate strategy, and we are pleased to have delivered our fifth consecutive quarter of revenue and earnings growth. We see positive dynamics in usage growth and subscriber additions in our markets, while we were able to improve margins significantly in the period. We are optimistic looking forward as our markets offer significant opportunities for continued growth."

The Company added approximately 2.0 million new customers during the second quarter of 2008 on a consolidated basis that were all added organically.

Customer Segmentation

Subscriptions to MTS' pre-paid tariff plans accounted for 85% of gross additions in Russia and 95% in Ukraine in the second quarter. At the end of the quarter, 88% of MTS' customers in Russia were signed up to pre-paid tariff plans. In Ukraine, the share of customers signed to pre-paid tariff plans was 92%.

Starting from Q2 2008, we will include connection fees in our calculation of ARPU as this is network-related revenue. ARPU is now calculated by dividing our service revenues for a given period, including interconnect, guest roaming fees and connection fees, by the average number of our subscribers during that period and dividing by the number of months in that period.

Posted to the site on 12th August 2008