Ukrtelecom Announces Preliminary Results For 2005.

Ukrtelecom’s (UTEL: BUY) net income was USD 103 mln and the company’s revenue was about USD 1.3 bln (7.6% growth nominated in local currency). The main areas that saw revenue growth were fixed-to-mobile and the local and data segments. The 2.7% decrease in the long distance segment was caused by mobile cannibalization. Concorde Capital: UTEL’s preliminary revenue is slightly higher than our estimates (USD 1.24 bln) while net income is lower than we forecasted (USD 120 mln). The company’s lower net income is due to the sharper than we expected increase in labor-related costs and depreciation. Implementing in our valuation UTEL’s mobile segment entry, we support our BUY recommendation on the stock.