Russian state telecoms operator Rostelecom has reported a 3% increase in turnover from continuing operations to RUB145.2 billion (USD4.0 billion) for the first six months of 2014. Net profits fell year-on-year to RUB10.2 billion from RUB14.4 billion in H1 2013, whilst OIBDA dipped 4% to RUB51.3 billion with OIBDA margin slipping 2.4 percentage points to 35.4%. Rostelecom attributed the positive revenue growth to improvements in its broadband and pay-TV subscribers, although the telco noted that it was still burdened by the steadily declining demand for traditional telecommunications services. Broadband subscriptions increased 7% y-o-y to 10.9 million (10.8 million in Q1 2014), whilst its pay-TV customer base increased by 7% to 7.7 million (7.6 million in Q1).
Rostelecom also noted that it has completed ‘all the legal formalities to form a JV with Tele2 Russia several months ahead of schedule.’ The company registered a 54% decline in mobile users – from 13.8 million to 6.36 million – due to the deconsolidation of its mobile subsidiaries, as part of its JV deal with Tele2.
Commenting on the results, senior president and chief financial officer Kai-Uwe Melhorn explained: ‘We have also significantly reduced our debt burden, which is one of our strategic priorities, particularly at a time of volatility in the capital markets and increasing cost of financing. This will ease pressure on the company’s financial expenses and provide opportunities for net profit to grow in the future.’