Reuters: US Dollar Report: UPDATE 1-Russia's MTS posts quarterly loss on Uzbek write-off

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UPDATE 1-Russia's MTS posts quarterly loss on Uzbek write-off Aug 28th 2012, 12:13 Tue Aug 28, 2012 8:13am EDT * Posts net loss of $681.8 mln vs year-ago profit * Uzbek write-offs totalled $1.1 bln * Earnings before write-offs at $357.5 mln * Revenues down on weaker rouble, rise in Russia MOSCOW, Aug 28 (Reuters) - MTS, Russia's top mobile phone operator swung to a second-quarter net loss after writing off $1.1 billion over the suspension of its licence in the central Asian state of Uzbekistan. MTS, part of oil-to-telecoms conglomerate Sistema , had its Uzbekistan licence suspended in July and a court revoked its licence permanently on Aug. 13. The company says it is fighting to save the Uzbek business. "While we continue to challenge the allegations against MTS-Uzbekistan and make use of the appeals process within Uzbekistan, we are also evaluating other appropriate legal strategies to defend our legitimate rights and investment interests," Chief Executive Andrei Dubovskov said in a statement on Tuesday. MTS, which had been hit by Uzbek authorities with $669 million of fines, said the $1.1 billion non-cash write-off included a $579 million asset and goodwill impairment charge and a $500 million tax reserve. The group's second-quarter net loss reached $681.8 million, down from a profit of $367 million in the same period a year earlier. Excluding the write-off, second-quarter net profit fell by 2.6 percent, year-on-year, to $357.5 million, above a $320 million Reuters poll forecast. Revenues edged down 0.2 percent to $3.12 billion against $3.08 billion forecast, hurt by depreciation of the Russian rouble, its main operating currency, against the U.S. dollar, its reporting currency. As a result of the weakening in the rouble, MTS recorded a foreign exchange loss of $198.9 million, erasing gains on its main Russian market where rouble revenues rose by 9 percent to 83 billion roubles ($2.61 billion). Total operating income before depreciation and amortisation (OIBDA) rose 5.4 percent to $1.37 billion, with a 44 percent margin, compared to consensus estimates of $1.32 billion and 42.8 percent, respectively. The margin came above the company's full-year 2012 guidance of 41 to 42 percent, but it reiterated its outlook, saying margins were likely to weaken in the second half of the year. MTS also operates in Ukraine, which is its second-biggest market after Russia, as well as Armenia. In September, it will also relaunch operations in Turkmenistan where it was forced to suspend operations late in 2010. Link this Share this Digg this Email Reprints

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