MTS sees profits fall

16 Jun 2006

Russia’s largest cellular operator MTS has reported a 20.7% drop in first-quarter net profit to USD184.4 million due to slowing sales at its Russian and Ukrainian divisions and a rise in non-core expenditures. Consolidated revenues reached USD1.29 bilion, an increase of 21.9% over the first quarter of 2005, while operating income was up 11.5% to USD598.6 million. The firm’s president Leonid Melamed commented: “We witnessed a difficult fourth quarter of 2005 and first quarter of 2006, but are currently pursuing a number of initiatives covering our entire value chain aimed at increasing our revenue in our home markets and optimizing business processes to improve upon our margins. We will be aggressive in examining costs and seek an acceptable rate of return on our investments and expenses. As a benchmark, we are seeking a return on invested capital of 25% over a five-year period through organic and inorganic growth.”

Russia, Mobile TeleSystems (MTS)