Farlep Posts 49.9% Top-line Growth In 2004, Reduces Margins

Farlep’s net revenues were USD 10.4 mln in 2004, with a net profit of USD 0.49 mln, compared with a net profit of USD 1.0 mln in 2003. Farlep Invest holding comprises local communication operators working under the Farlep trademark, the Ucomline international communications operator, and Farlep-2000 production enterprise. Concorde Capital: Farlep is controlled by the Industrial Union of Donbass (IUD). Telecom assets are not core for IUD, which is focused on the steel industry. Most likely, IUD will divest of Farlep as soon as it receives an acceptable price. IUD is rumored to have been approached already by interested parties concerning Farlep, but the price offered was low.

*Please note that the data provided by information agencies is not consistent with the financial reports we have received. New agencies reported correct revenues for 2004, but state that revenues grew only 19%. Also, the net income numbers differ both for 2003 and 2004. We will verify later if Farlep restated their 2003 financial reports.