MegaFon Profits Up 37% on Cost Cutting

Russia's third largest mobile network, MegaFon has reported a 37.2% rise in its fourth-quarter fiscal profits to 12.63 billion roubles (US$370.4 million), while sales rose by 25% to 48.44 billion roubles (US$1.44 billion).

EBITDA rose 28.5 percent to 24.624 billion roubles, and the margin rose to 50.8 percent from 49.4 percent a year ago. Chief Executive Sergei Soldatenkov said that the firm would be unable to maintain that margin level during 2009 and that it is expected to slip to the 46-47% range.

"We have thoroughly managed the structure of our expenditures in response to the slowdown in economic growth," CEO Sergei Soldatenkov said in a statement.

Debt stood at US$1.2 billion at the end of last year, MegaFon said in a presentation. CAPEX will be cut from the US$2.2 billion in 2008 to around US$1 billion this year.

TeliaSonera, which also reported its financial results this week, owns 43.8 percent of MegaFon.

Posted to the site on 24th April 2009