Ukrtelecom Posts 9M Results

Ukrtelecom (UTEL: BUY) increased revenues by 1.1% yoy during 9M06 to USD 983 mln. The company’s costs grew faster (6.2% yoy) which were reflected in EBITDA reduction by 12.7% yoy (to USD 260 mln). In addition, the company interest expenses increased almost three times due to larger short-term debt financing. UTEL’s net income was USD 36.3 mln (2.5x decrease yoy). Alexander Paraschiy: UTEL’s net income in the third quarter (USD 23.8 mln) grew 3.6x compared to the second quarter, due to positive changes in tariffs in July 2006. With the additional tariff changes made on the first of November, UTEL’s forecast for net income of USD 70 mln in 2006, which the company announced at its meeting with analysts earlier this month, looks realistic.