Ukrtelecom sees EBITDA rise 29% yoy in 9M09

Ukrtelecom (UTLM) reported its 9M09 financial results yesterday in a company filing: net revenues rose 1.9% yoy to UAH 5.0 bln, EBITDA by 29% yoy to UAH 2.1 bln, and its net loss dropped 37.8% yoy to UAH 194.8 mln. In 3Q09, Ukrtelecom’s net revenues rose 4% yoy to UAH 1.7 bln, gross profit by 2.6x yoy to UAH 465.7 mln, and net loss dropped 3x yoy to UAH 70.7 mln. Yegor Samusenko: Ukrtelecom improved its EBITDA by 6 pp qoq to 48% in 3Q09. The increase was driven by cost reduction, which resulted in a gross margin of 28% vs. its 19% average in 2007-1H09. However, the company’s EBITDA improvement was eroded by revaluation of its foreign denominated debt (loss of ~UAH 135 mln) due to hryvnya depreciation during the quarter. Also, the company paid most of its 2H09 interest in the third quarter; Ukrtelecom’s interest payments are due semiannually in the first and third quarters (UAH 116 mln vs. UAH 34 mln in 2Q09). We expect a positive reaction from the stock market to Ukrtelecom’s improved cost efficiency.