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Investor presentation. April, 2005. WWW.CENTERTELECOM.RU. This presentation contains forward-looking statements. - PowerPoint PPT Presentation

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  • *April, 2005*WWW.CENTERTELECOM.RUInvestor presentation

  • *WWW.CENTERTELECOM.RUThis presentation contains forward-looking statements. Such statements are not statements of historical fact, and reflect the beliefs and expectations of the Company's management. The words "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "predicts," "projects" and "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Accordingly, the actual results of operations of the Company may be different from the Company's current expectations, and the reader should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments.

    *April, 2005

  • *WWW.CENTERTELECOM.RU Central District: 17 Subjects of the Federation of the Central part of Russia covers 3.8% of Russias territory 26.2% of total population of 38 mln people (most densely populated) 12.8% of GDP of RUR 1,703 bln One of the highest monthly income per capita in Russia - RUR 6450 Fixed-line penetration level is 23.7%

    Digitalization level is 48% 6.8 mln lines installed by end of 2004

    Borders with Ukraine and ByelorussiaATTRACTIVE REGION*April, 2005

  • *WWW.CENTERTELECOM.RUSHAREHOLDER STRUCTUREShare capital USD 225 mnNumber of shares 2.103.999.655 of which:ordinary 75%, preferred 25%Free float shares 55%*April, 2005

  • *WWW.CENTERTELECOM.RUORGANIZATIONAL STRUCTUREFinancial DirectorShareholders meetingBoard of DirectorsBoard of DirectorsCompensation & Benefits Committee

    Corporate GovernanceCommitteeBudget & Investment planningCommitteeAudit Committee Commercial DirectorTechnical Director ITDirectorSecurity DirectorHR DirectorGeneral Director Management Board Auditing CommissionCorporate Secretary*April, 2005

  • *WWW.CENTERTELECOM.RUKEY PRODUCTION INDICATORS

    6,8 mln access lines installed 26 long distance connection stations 3,0 mln wire broadcasting points 15 cable television networks in big cities 112 thousand mobile subscribers more than 50 thousand cable television subscribers *April, 2005

  • *WWW.CENTERTELECOM.RUMARKET SHARE IN MAJOR SEGMENTS*April, 2005

    1

    0.85

    0.91

    0.57

    0.029

    0.64

    1

    5Long-distance85%

    4Local91%

    3Documentary57%

    2Mobile2.90%

    1New services (based on IP, VPN, INS, ISDN)64%

    2

    3

  • *WWW.CENTERTELECOM.RUKEY FINANCIALS (RAS) (RUR, mln)RUR Mln*April, 2005

    1

    2002200320042005E

    Revenues16.420.8924.963

    Operating expenses12.13215.64919.702

    EBITDA3.3374.8535.377

    Net profit1.0841.5030.398

    CAPEX4.7017.5639.409

    2

    3

  • *WWW.CENTERTELECOM.RUKEY FINANCIALSMajor income components (RUR, bn)*April, 2005

    Chart1

    10.6

    9.6

    2.56

    2.2

    Sheet1

    Local10.6

    Long-distance and international communication services9.6

    Other2.56

    Income generated by service providers2.2

    Sheet1

    0

    0

    0

    0

    Sheet2

    Sheet3

  • *WWW.CENTERTELECOM.RUREVENUEIn 2004 gross revenue reached RUR 24,963 mln, 19.5% growth to 2003*April, 2005

    2

    0.3825760384

    0.0168881176

    0.3764005121

    0.0535233558

    0.0114946671

    0.0262208251

    0.0129235444

    0.001629658

    0.0302599153

    0.0880833663

    1

    ..

    2004

    NN

    (.65-) , (%)

    1256

    - 24,593,013.3100.0

    :

    1.Long-distance telephone communication9,408,697.638.26%

    2.Documentary telecommunication415,329.71.69%

    3.City telephone communicatiom9,256,822.837.64%

    4.Country telephone communication1,316,300.65.35%

    5.Pay phone282,688.51.15%

    6.Wire broadcast644,849.12.62%

    7.Wireless communication317,828.91.29%

    8.Broadcasting, television40,078.20.16%

    9.New services (Internet, ISDN, IP-telephony, Intelligent networks, other )744,182.53.03%

    10.Traffic transition2,166,235.48.81%

    .

    -

    ..

    793-24-55

    2

    3

  • *WWW.CENTERTELECOM.RUOPERATING COSTS AND EXPENSESIn 2004 operating costs and expenses totaled RUR 19,702 mln, 25.9% increase 2003*April, 2005

    1

    1

    200220032004E2005E

    Revenues16.420.89

    Operating expenses12.13215.649

    EBITDA3.3374.853

    Net profit1.0841.503

    CAPEX4.7017.563

    Wages32.42%

    Social tax10.38%

    Amortisation12.97%

    Materials & spare parts6.55%

    Energy2.61%

    Repair work3.59%

    Rostelecom service payment15.83%

    Other telecommunication service payment2.52%

    Property insurance payments1.38%

    Leasing2.37%

    Other costs9.38%90.62%

    2

    3

    1

    0.3242

    0.1038

    0.1297

    0.0655

    0.0261

    0.0359

    0.1583

    0.0252

    0.0138

    0.0237

    0.0938

    2

    0.3242

    0.0252

    0.1038

    0.0138

    0.1297

    0.0655

    0.0261

    0.0359

    0.1583

    0.0237

    0.0938

    3

    0.0138

    0.3242

    0.0252

    0.1038

    0.1297

    0.0655

    0.0261

    0.0359

    0.1583

    0.0237

    0.0938

    1

    200220032004E2005E

    Revenues16.420.89

    Operating expenses12.13215.649

    EBITDA3.3374.853

    Net profit1.0841.503

    CAPEX4.7017.563

    Property insurance payments1.38%

    Wages32.42%

    Other telecommunication service payment2.52%

    Social tax10.38%

    Amortisation12.97%

    Materials & spare parts6.55%

    Energy2.61%

    Repair work3.59%

    Rostelecom service payment15.83%

    Leasing2.37%

    Other costs9.38%90.62%

    2

    3

  • *WWW.CENTERTELECOM.RUKEY OPERATING HIGHLIGHTSTotal number of lines installed for the2004 grew to 6 798 128, including 619 291 lines commissioned in 2003Long-distance traffic increased 104.2% to 2.8 bnminutes compared to the last year Long-distance (international) traffic increased 106.7% to 197.8 m minutes compared to 2003*April, 2005

  • *WWW.CENTERTELECOM.RUCAPEX DYNAMICSRUR Blnforecast4.87.69.43.836%64%71%29%73%27%68%32%Equity capitalDebt capitalBonded loans*April, 2005

    1

    0.85

    0.91

    0.57

    0.029

    0.64

    3

    1638912132

    2089015649

    2496319702

    3000024000

    Revenue

    Operating costs

    2

    1638912132

    2089015649

    2496319702

    3000024000

    4

    1638912132

    2089015649

    2496319702

    5

    4.8

    7.6

    9.4

    3.8

    6

    1.73.1

    2.25.4

    2.66.8

    2.61.2

    7

    1.73.1

    2.25.4

    2.66.8

    2.61.2

    1

    5Long-distance85%

    4Local91%

    3Documentary57%

    2Mobile2.90%

    1New services (based on IP, VPN, INS, ISDN)64%

    2002200320042005(E)

    Revenue16389208902496330000

    Cost12132156491970224000

    2002200320042005E

    4.87.69.43.8

    1.72.22.62.6

    3.15.46.81.2

    2

    3

    Main

    skate co codeIssue/Tranche #Registration NumberRegistration DatePar Value, RURVolume Placed, RUR thndCoupon PeriodPlacement Start DateNumber of CouponsPlacement Price, %Placement End DateDays to MaturityYTMDays to OfferYield to OfferIssue Placement Registration DateOffer dateMaturity dateStatus

    MOEL " "14-01-00194-A10/17/0110006000009111/16/01510011/16/0173223.412/10/0111/18/03

    MOEL " "24-02-00194-A6/25/0210006000002167/23/0261007/23/02100318.898/15/024/21/05

    MOEL " "34-18-00194-A8/1/03100020000001839/16/0361009/17/03109512.7336614.279/16/049/15/06

    2001

    2002

    2003

    Volume Placed, RUR mlnCoupon PeriodPlacement Start DatePlacement Price, %Placement DateYTMDays to OfferYield to OfferIssue Placement Registration DateOffer dateStatusPeriodCouponsNimber

    6009111/16/0110011/23/0118.8912/10/012 3/4 years6

    20002167/23/021009/17/0312.738/15/02 3 years6

    5,6231839/16/031008/31/0414.2736614.279/16/04 5 years10

    Main

    0

    0

    0

    Coupons

    skate co codeCompany nameIssue/TrancheCoupon NumberCoupon Period StartCoupon Period EndCoupon, %

    MOELCentreTelecom1111/16/012/19/0222.00

    MOELCentreTelecom122/19/025/21/0221.50

    MOELCentreTelecom135/21/0211/19/0220.50

    MOELCentreTelecom1411/19/025/20/0318.00

    MOELCentreTelecom155/20/0311/18/0318.00

    MOELCentreTelecom217/23/0210/22/0220.00

    MOELCentreTelecom2210/22/024/22/0320.00

    MOELCentreTelecom234/22/0310/22/0318.00

    MOELCentreTelecom2410/22/034/21/0418.00

    MOELCentreTelecom254/21/0410/21/0416.00

    MOELCentreTelecom2610/21/044/21/0516.00

    MOELCentreTelecom319/16/033/17/0412.35

    MOELCentreTelecom323/17/049/16/0412.35

    MOELCentreTelecom339/16/043/18/0512.35

    MOELCentreTelecom343/18/059/16/0512.35

    MOELCentreTelecom359/16/053/17/0612.35

    MOELCentreTelecom363/17/069/15/0612.35

  • *WWW.CENTERTELECOM.RUCAPITAL INVESTMENTS In 2004 RUR 9.4 bln were invested (23% growth to 2003) *April, 2005

  • *WWW.CENTERTELECOM.RUSTRATEGY. Main directionsIncrease of overall performance in highly remunerative segments of the marketOperational expenses reduction*April, 2005

  • *WWW.CENTERTELECOM.RUSTRATEGY Increase share of value-added services in profit structure

    Achieve revenue market share in telecommunication services in Central region of 62% by 2006

    Average annual income growth of 25%

    Increase non-regulated services market share to 75%

    Achieve share of non-regulated services in profits of