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MegaFon posts record profit ahead of IPO
November 10, 2012
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MOSCOW: Russia’s No.2 mobile phone operator MegaFon reported a 20 per cent rise in quarterly net profit, on the back of a cost-cutting campaign and increased sales, boosting prospects for its long-awaited share sale.

MegaFon, which last month delayed an initial public offering in London and Moscow until after third-quarter results, said net profit rose by 19.6 per cent, year-on-year, to 14.9 billion roubles ($472.8 million) in the three months to end-September.

The result -which MegaFon said was its highest quarterly net income recorded - was supported by revenue growth, a core profit gain on the back of lower operating costs and increased cash flow, the company said in a statement.

Third-quarter revenue grew by 12.3 per cent to 71.2 billion roubles, driven by an increase in its subscriber base and growing demand for mobile data.

Core profit, or operating income before depreciation and amortisation, rose 21.1 per cent to 32.1 billion, while its margin rose to 45.1 per cent from 41.9 per cent a year ago.

MegaFon said it has been benefitting from lower subscriber acquisition costs after switching to revenue-share compensation schemes with dealers and through a reduction of capital expenditure, having invested aggressively in its network in previous years.

Reuters

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