Jun
23
Rostelecom: Good annual report - June 23, 2009
Filed Under Bullet-moments |
Russia’s largest long-distance communication operator – Rostelecom – summed up the results of the previous year by IAS. The sales of the company totaled 66.6 bn RUR, net profit – 12.2 bn RUR. The year 2008 might be called the most successful one for the company within the past 3 years after the liberalization of the long-distance communication market.
Rostelecom showed significant upping of OIBDA margin – the value of the given estimate reached 21%. Partially that was defined by the regulating moments, such as cancellation of compensation adding. However, there was another negative moment of the regulating character – decrease of tariffs for the national communication. The cost of on minute lost 8% average.
Nevertheless, the development of the non-regulated segments is another positive moment of the company. First of all we should outline gaining control over RTComm.ru, which allowed building up and diversifying the sales. Nevertheless, the diversification level remains relatively not high – almost 44% of income is gained by the company from the national communication, and about 70% comes from usual types of voice communication.
Extremely low debt load of Rostelecom still is one of its incontestable bonuses. Cash assets minus the interest debts as of the end of the previous year formed 542 mn USD, and the cash flow from the operating activity is enough for financing the investment program.
Despite the success of Rostelecom, the dynamics of its quotes does not depend on the fundamental factors. More to that, the situation is not to change soon – the coming reorganization of Svyazinvest might significantly raise the volatility of the company’s share market.
We revised our model of Rostelecom considering the new data and re-calculated the estimation of its shares’ value. The new estimations form 3.44 USD per common share and 2.58 USD per preferred share (the former estimations were 3.63 USD and 2.72 USD respectively). Note that the given estimates do not account the possible change of company’s structure. We confirm the former recommendations on the common and preferred shares of Rostelecom – SELL and BUY respectively.
Rostelecom: Good annual report - June 23, 2009 (PDF)