Uralsvyazinform Reports 2007

EKATERINBURG, Russia -- Uralsvyazinform (RTS: URSI/URSIP) the leading carrier of fixed-line and mobile services in the Urals region, Russia presents the audited consolidated financial statements for the year ended December 31, 2007 prepared under International Financial Reporting Standards (IFRS). The financial statements were audited by OOO “Ernst and Young”.

Revenue increased by 22.4% as compared to 2006 and amounted to US$ 1.5 bln. Revenue gains in mobile services, new services and intra-zone services were the main growth drivers.

Revenue from mobile services totaled US$ 487.1 mln. (+30.3% on 2006). The segment contributed 31.9% of overall revenues.

Revenues from new services (Internet and data transmission) amounted to US$ 136.8 mln (+44.9%). The segment contributed 8.9% of overall revenues.

Operating expenses in 2007 increased by 15.9% and totaled US$ 1,293.8 mln., mainly due to the growth in interconnection charges (+53.9%), agency fees (+63.5%), and depreciation and amortization (+23.5%). Wages and salaries expense decreased by 2.7% as a result of staff reduction and structural developments.

Operating profit amounted to US$ 235.3 mln (+77.9% on 2006). OIBDA increased by 44.8%. OIBDA margin increased from 27.1% to 32.0%. Net profit as of 2007 totaled US$ 89.7 mln, being x3.2 increase on 2006.

Uralsvyazinform JSC