MegaFon RAS profit up 22.8%; Altimo indicates willingness to offload stake

16 Nov 2007

Cellco MegaFon’s net profit for the first nine months of 2007 grew by 22.8% year-on-year to USD219.9 million, under Russian Accounting Standards (RAS), on revenues of USD1.25 billion, up 22.5% on the same period of 2006. The net profit growth was partly attributed to an extraordinary charges decrease in the third quarter of 2007.

Elsewhere, Altimo, the telecoms wing of Russian conglomerate Alfa, said yesterday that it ‘made sense’ for TeliaSonera, its Swedish partner in MegaFon, to take control of Russia’s third largest mobile operator. Altimo’s Chief Financial Officer Teijo Pankko told journalists at the Morgan Stanley investor conference that Altimo would be willing to do a cash-and-shares deal to swap its 25.1% MegaFon stake for a minority holding in TeliaSonera, whilst declining to specify details such as the likely size of the Russian group’s desired stake. Pankko confirmed that there were ongoing discussions with the Swedish telco, but stopped short of referring to these as formal negotiations. TeliaSonera has long expressed the desire to raise its 44% holding in MegaFon as well as its 37% stake in Turkcell, which is also part-owned by Altimo.

Russia, MegaFon, Telia Company