Ukrtelecom posts USD 62 mln net loss in 9M08

Ukrtelecom (UTEL) decreased net income from USD 53 in 9M07 to negative USD 62 mln in 9M08. The company also saw its revenue decline by 4% yoy to USD 965 mln, and EBITDA by 55% yoy to USD 144 mln. Alexander Paraschiy: Uktelecom’s profitability fell due to inflating operating expenses (COGS +10% yoy; SG&A +35% yoy; other operating expenses +150% yoy) on the background of decreasing revenues from its traditional business. The 20% increase in fixed line tariffs beginning October 1, 2008 will allow Ukrtelecom to generate an extra USD 20 mln in 4Q08, which will still be not enough for the company to compensate for a decrease of sales for FY08. 9M08 results raise questions about Ukrtelecom meeting its financial plan of a USD 1.8 mln net profit in 2008.