Golden Telecom Cuts Q4 Loss, Revenue Up

Golden Telecom halved its loss in the last quarter of 2000 to $2.2 million compared with $4.1 million in the same period of 1999, on increased revenue from data and Internet services.

Net loss per common share has also decreased to $0.09 from $0.18 in the fourth quarter of 1999.

"Our financial performance in 2000 clearly demonstrates that we have met, or exceeded, all of the commitments made to our shareholders," said Stewart Reich, Golden Telecom's chief executive officer, in a statement.

The U.S.-based telecom and Internet operator in Russia and the Commonwealth of Independent States reported Wednesday that revenue for the quarter ending Dec. 31, 2000, jumped 28 percent to $32.5 million, while annual revenue increased 16 percent to $113.1 million.

The revenue increase followed a jump in voice traffic, which "rose to 220 million minutes compared with 198 million in the third quarter, mainly due to improving economic and business conditions," said Ari Krel, telecoms analyst at United Financial Group brokerage.

Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) increased 18 percent from the fourth quarter of 1999 and were up 2 percent year-on-year to $16.7 million.

Golden Telecom also boasted healthy revenue growth from Internet and data services, which grew to $13.4 million, up 70 percent from the comparable quarter in 1999.

And thanks to an advertising push, which included TV commercials for the company's online services, Golden Telecom has seen a staggering leap in its Internet subscriber base — up 34 percent for the quarter and 360 percent year-on-year to 85,833.

But while the company painted a rosy picture of its financial results, analysts said Golden Telecom's mobile services lagged behind, recording a revenue of $4.3 million, a drop of 7 percent compared with the third quarter.

"Mobile services are a very competitive market where Golden Telecom will never become a major player," said Nadezhda Golubeva, telecoms analyst at Aton brokerage, in a telephone interview. "We expect the company's management to leave the mobile services business in the near future."

The company went on an acquisition spree in 2000, gobbling up online directory @Rus, Internet search engine Aport and entertainment portal Omen, while swapping some of its mobile properties for a stake in MCT Corp., a mobile services provider.

As a result, Golden Telecom's investors should brace themselves for bulging expenses this year, said Krel, adding that the company is unlikely to break even o-r turn a profit before 2002.

In September, U.S.-based Global TeleSystems, Golden Telecom's parent company, said it might sell its 62.5 percent stake in the company.

The sale proposal has made potential Golden Telecom investors remain on the sidelines, Aton's Golubeva said. Golden Telecom