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RTS : ESPK MICEX : DLSV ADR : FEEOY

RTS : ESPK MICEX : DLSV ADR : FEEOY. Presentation for Analysts and Investors Group of Brunswick UBS. Chief Executive Officer Far East Telecommunications Company Anton A. Alexeev

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RTS : ESPK MICEX : DLSV ADR : FEEOY

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  1. RTS: ESPKMICEX: DLSV ADR: FEEOY Presentation for Analysts and Investors Group of Brunswick UBS Chief Executive Officer Far East Telecommunications Company Anton A. Alexeev May 26, 2005 Investor Relations

  2. Safe Harbor The forward-looking information , which is included in this presentation, are the statements, made pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. The presentation contains information about the future events and financial results, estimated by the Company in the future. These statements involve a number of risks and uncertainties. Among the factors that could cause future results include: deterioration of economy; changes of the laws, which are currently in force; increase in dependence on “Rostelecom”,OJSC, concerning the questions of proportion establishment, according to which the payment for international and long-distance traffic is divided: changes in rate of currency exchange; changes in percentage rates; changes in prices for raw materials and services, used by the issuer; changes in political situation in the country; military conflicts and cases of emergency; impossibility to continue the license for carrying out activity. The more detailed description of risks and uncertainties of the company you can find in the quarterly accounts and annual reports of “DALSVYAZ”, OJSC. The majority of the mentioned factors are beyond the control or the possibility of prognostication on the Company’s behalf. Taking onto consideration all the above-mentioned information, the Company does not recommend to rely upon any forward-looking statements, included into this presentation. The Company does not commit itself to disclosing any changes to this presentation with the aim to show the events or circumstances, which took place after the date of this presentation, or with the aim o show the unforeseen events, with the exception of the cases when this disclosure is required in accordance to the Private Securities Litigation Reform Act of 1995. All the financial results, included in this presentation, were accounted according to Russian Accounting Standards.2004 results are auditedand comparable. Investor Relations

  3. Contents • Far East Federal District • 2004 Performance Review • Financial Results for 2002 – 2004 • Technical Results for 2002 – 2004 • Plans and guidance for 2005 • FETEC at the capital markets • Q&A Investor Relations

  4. Russian Far East Federal District • FETEC is the leader of the Far East Telecommunications market; • FETEC provides services in 7 regions of the Russian Far East. • The largest region of the Russian Federation; • Borders on North Korea, North America, China, Japan; • Territoryof 3.3 million square km (which is 9 times more than territory of Germany). • The number of inhabitants – 6.1 mln. people – 4.2% of total Russian number. 4,8mln. (80%) of them areurban citizens; Region of rending services Investor Relations

  5. Results for 2004 The Leader at Russian Far East Telecommunications Market Market share at the served region is 51%: • 85% - local telephone services • 89,5% - long distance domestic and international communications • 60% - the Internet • 27% - cellular communications (in Kamchatka and Magadan regions) Investor Relations

  6. Financial Highlights of 2004 Strong Y-o-Y Financial Results Growth (compared to 2003) • Revenue growth – 30.6% (the highest in the industry) • Net income from operating growth – 66.4% (the highest in the industry) • Net income (including income from assets sale) increased by6times • EBITDA increased by90% • EBITDA (including income from assets sale) increased by 3.5times • The level of digitalization (upgrading) is 61.7% • Operated net capacity increased by 10% (or 115,7 thousand subscribers) • Average staff number increased by 1.8% (341 people) Revenues increased to :cellular – by 73,6% to332 million rub. new services – by 61%to524 million rub. local telephone services – by 30,6% to3,2 billion rub. long distance domestic and international communications – by 10% to 3,2 billion rub. Investor Relations

  7. +30.6% +28.4% 2002 2003 2004 Results for 2004 The Highest Revenue Growth Rate in the Industry Revenue (billion rub.) Revenue increase by 30.6% in 2004 was primary driven by sale increase of 1 825,1 million rub. and increasing tariff income of 227,9 million rub. Investor Relations

  8. Results for 2004 Revenue Structure by Types of Services Document Services Document Services New Services New Services Wireless, Cellular Services Wireless, Cellular Services 2% 2% 6% 5% 4% 4% Growth Others Others 9% 10% Local Telephone Services 38% Local Telephone Services 36% 30.5% Long distance communications Long distance communications 41% 43% 6 726 million rub. 8 779 million rub. 2003 2004 Investor Relations

  9. 706,3 535,3 1 192,1 529 481 314 143,1 480 823 627 244 127 385 812,2 315 671 2 941 2 353 Results for 2004 Expenditures from operating (million rub.) Others expenditures Expenditures from other companies services Expenditures from OJSC Rostelecom Expenditures from other telecom operators (except operators of the Group) Electricity charges Material Expenditures Amortization and depreciation Expenditures for social Insurance Staff wages and Salaries 7 751 5 928 2003 2004 Investor Relations

  10. Results for 2004 The Highest Net Income Growth Rate in the Industry Net Income from operating (million rub.) Net income, including income from assets sale (million rub.) +66.4% +526% +37.4% +37.4% 2002 2003 2004 2002 2003 2004 Investor Relations

  11. Strong growth of the efficiency Revenue per line (thousand rub.) +20.6% Revenue per line increased by 20.6% through revenue increase by 30.6%, and the network capacity put into operation increased by 10,2%. +21.4% 2004 2002 2003 Revenue per worker (thousand rub.) +31.2% Revenue per worker increased by 31.2% through both revenue increase by 30,6% and decrease of average staff number by 0,5%. +35.4% 2004 2002 2003 Investor Relations

  12. Triple EBITDA growth EBITDA*increased by90% to 1.3 billion rub. EBITDA (including income from assets selling) increased by 3.5 times to 2,4 billion rub. EBITDA growth was primary driven by income before taxes up 510% (+ 1.3 billion rub), amortization and depreciation up 200% ( + 312 million rub.), and interests up 300% (+121 million rub.). EBITDA margin increased by 2.7 times to 27% (in 2003 - 10%). EBITDA (million rub) 2 431 +248.4% +12% 1 326 +90% 698 623 2002 2003 2004 * EBITDA is calculated as income before taxes + amortization and depreciation + interests (%). Investor Relations

  13. 130% revenue increase from local telephone services Revenues from local telephone services (million rub.) FETEC provides services in 7 regions of the Russian Far East. There are 6.1 million people live in the Far East, 80% of them live in the cities. Far East telecommunications market is still far from satiation. Telephone density at the end of 2004 was 24%. (20.5% in 2003). +30.8% +22.7% 2002 2003 2004 Local telephone services revenue increase was driven by subscribers number increase (+115,7 thousand) and by average tariff increase by 16.5%. Investor Relations

  14. Revenue growth from long distance communications Revenue from long distance domestic and international communications (million rub.) Long distance traffic growth (thousand minutes) +9.8% +12% +16.4% +22.7% 2002 2003 2004 2002 2003 2004 Long distance domestic and international communications revenue increased by 9,8% because of 12% growth of outgoing traffic. Investor Relations

  15. 161% revenue growth from new services Revenue from new services and data transmission (million rub.) 524.5 +61.4% 39,1 Internet (dial-up, DSL) +49.8% 325 217 Other new services (ISDN, IP-telephony, Data transmission) 20,9 4 485,4 304 213 2002 2003 2004 Internet (dial up) users number DSL users number +9.7% +154.9% +440% 2003 2004 2002 2003 2004 Investor Relations

  16. 2002 2003 2004 2003 2004 Strong new services traffic growth IP-telephony communications (thousand minutes) +74.4% The Internet traffic volume (Gbytes) The Internet trafficvolume (thousand minutes) +55.8% +49,7% 950 996 153 228 +35% +89,4% 635 219 98 375 72 871 335 386 2002 2003 2004 Investor Relations

  17. FETEC provides cellular services in two regions of the Far East: Kamchatka region (GSM-900/1800) and Magadan Region (GSM-900). 174% revenue growth from cellular services Number of cellular subscribers Revenues from cellular services (million rub.) 332 +73.8% +162.7% +45.8% +23.6% 131 191 2002 2003 2004 2002 2003 2004 Investor Relations

  18. Staff number decrease of 1.8% Average staff number, including outside deputies and workers, who work under the contracts (people) FETEC pursues the policy of staff optimization. In 2004 staff number decreased by 1.8% (341 people) compared to 2003. - 5.5% - 1.8% 2002 2003 2004 Investor Relations

  19. Capital Expenditures Capital Expenditures (million rub.) +54.4% +146.7% 2002 2003 2004 The main priorities of FETEC investment program in 2004 were net expansion and upgrading, increasing of extension intraband optical lines of transmission, new communication and informational technology inculcation. Investor Relations

  20. Strong increase of the net capacity Coefficient of installed 2002 2003 2004 network operating % 91,25 85,9 83,5 Dynamics of the network capacity growth (thousand numbers) Installed net capacity increased by 13% compared to 2003. Operated net capacity increased by 10% compared to 2003. +13.3% +10.2% +11.7% +5.1% 1 508 1 331 1 259 1 191 1 143 Installed net capacity 1 087 Operated net capacity 2002 2003 2004 Quantity of telephone devices increased 115 702 numbers. Investor Relations

  21. Level of the net digitalization (upgrading) 61.7% Electronic automatic exchanges share in the installed net (%) 61.7 48.3 38.7 2002 2003 2004 Investor Relations

  22. Digital Switchboards Coordinate Switchboards Quasi-digital Switchboards Ten-step Switchboards The structure of installed net capacity Installed net capacity (thousand numbers) 1 191 +11,7% 1 331 +13,3% 1 508 2002 2003 2004 Investor Relations

  23. The main FETEC goals in 2005 Strengthening of competitive positions • Active developing of the new services • Holding the leading position on the Far East • Revenues and tariffs growth maintaining • Expenditures optimization and their growth rate decreasing • Staff number decreasing • Low profitability assets selling • Corporate governance efficiency increasing Increasing of Efficiency • Subscribers quantity increasing (operatednet capacity increasing) • Optical network expansion • Net carrying capacity expansion • Net digitalization (upgrading) increasing Net Expansion and Modernization (upgrading) Investor Relations

  24. Market share forecast In 2006 telecommunications market is estimated to grow by 3 times compared to 2001 or by 37% compared to 2004. The main factors of market growth: • dissatisfied demand for traditional telecommunications services (telephone density is 24%); • regional economy growth; • demand increasing for the alternative services; Forecast for FETEC market share in 2005 – 50%; • Local telephone services – 84%; • Zonal telephone services – 100% • Internet – 63% • Cellular services – 24%* FETEC market shareat the Far East Telecommunications Market 2001- 2006 (billionrub.)* 24.4 Growth by 3 times 20.6 17.8 11.4 10.6 8.3 12.2 10.3 8.9 6.8 5.3 4.1 2001 2002 2003 2004 2005 2006 *Of Kamchatka and Magadan Regions *Company’s forecast Investor Relations

  25. 360 +18% 304,2 2004 г. 2005 г. Financial Guidance for 2005 Revenue (Billion rub.) Net Income from operation (million rub.) +15% 10,3 8,9 2004 г. 2005 г. Capital Expenditures (billion rub.) 3,1 -43,5% 2,1 2004 г. 2005 г. Investor Relations

  26. Others Document services Revenue share from new services will increase to 9% FETEC revenues by types of services (billion rub.) 8,9 10,3 Wireless, cellular Services New Services* Long distance services Local telephone services 2004 2005 *New services - the Internet (dial-up, DSL, ISDN), IP- telephony, data transmission Investor Relations

  27. Shareowner capital structure(April 26, 2004) Investor Relations

  28. FETEC Shares at RTS (list «B») Volume of common shares trading at RTS (2003 – 2005) • QUOTES • May 18, 2005 • Common shares Ticker: ESPK Face value 20 rub. Shares outstanding 955814252 weeks max. price$1.5 52 weeks min. price$0.89 WA price $1.2 • Preferred shares Ticker: ESPKPFace value 20 rub. Shares outstanding 31168 901 52 weeks max. price$1.3752 weeks min. price$0.76WA price $1.14 Volume of shares trading at RTS in 2004 году increased by 2.3 times to 19 million. USD. $ ESPK +89% 2003 2004 2005 FETEC shares are also traded at MICEX in the list “B”. Ticker: DLSV, DLSVP Investor Relations

  29. max min Price for last 52 weeks FETEC ADR at OTC Market FEEOY • Dalsvyaz is implementing ADR program of 1 level (Pink Sheets) since 2002. • Transfer agent is • Bank custodian is ING Bank – www.ing.com • The trading is on Over the counter market. • 1 ADR is equal 30 common shares of Dalsvyaz OJSC. • The amount of shares outstanding is 1 274 418 units. • The company issued financial results accordingly IAS since 2002– www.dsv.ru the IR section. • For more information visit www.adr.com Investor Relations

  30. Market cap growth Market capitalization, December 31, 2003 – April 30, 2005 (RTS) $ 173 million. At the end of 2004 FETEC market cap increased to $133,7 million, but at the end of April 2005 it increased by 30% compared to 2004 and reached $173 million. Investor Relations

  31. Dividend growth Dividends (rub.) Common shares Preferred shares 2002 2003 2004 (recommended) Investor Relations

  32. International ratings Credit rating – Fitch Ratings Corporate governance rating Standard & Poors 2003 2004 2002 Investor Relations

  33. Thank you for attention! Questions? Investor Relations Department FETEC OJSC 57 Svetlanskaya St., Vladivostok, 690590 Russia Тel.: +7(4232) 208-500, ext. 1306 IR@dsv.ru www.dsv.ru Investor Relations

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