Ukrtelecom reports weaker 1H13 yoy financials, no operating numbers

Ukraine’s leading fixed-line operator Ukrtelecom (UTLM UK) reported a 2% yoy decline in net revenue to UAH 3,242 mln in 1H13, according to an IFRS-based report released on July 25. The company’s EBITDA worsened 7% yoy to UAH 660 mln and net profit fell 4.6x yoy to UAH 26.8 mln. Ukrtelecom cut its workforce 3.3% yoy to 58,954 (and of end-June), while increasing workforce-related costs 1.1% yoy in 1H13. The company was able to cut its net debt 9% YTD to UAH 2.4 mln in 1H13.

In 2Q13 alone, Ukrtelecom reported UAH 1.62 bln in revenue (-2% yoy and qoq), EBITDA of UAH 344 mln (-16% yoy and +9% qoq), and net income of UAH 10.8 mln (down 11x yoy and 1.5x qoq).

Alexander Paraschiy: We see the company’s operating results as neutral – Ukrtelecom had exceptionally strong results in 2Q12 because of its broadcasting and telecom services contract for the EURO 2012 fooball tournament last June. But what looks worrying to us is Ukrtelecom’s worsening practice of disclosing its operating numbers in its quarterly report.

In all its previous quarterly updates, the company provided comprehensive numbers on its revenue distribution by segment, as well as other important operating numbers, like customer base in key segments. We are tempted to attribute this sudden deterioration in disclosure to the change in the company’s ultimate owner last month. Recall, Ukrtelecom became an official affiliate of SCM, Ukraine’s largest holding company.