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. Last Updated: 07/27/2016

Business in Brief

Gazprom Profit Falls

MOSCOW (Prime-Tass) -- Gazprom's net profit fell 55.8 percent year on year to 34.2 billion rubles ($1 billion) in January-September, the gas monopoly said in a report Thursday.

Gazprom posted a pretax profit of 40.3 billion rubles, down from 118.2 billion rubles in the same period last year.

Gazprom's sales revenues rose to 429.5 billion rubles from 363.3 billion rubles a year previously.

The company's production costs were at 156.5 billion rubles, up from 102.8 billion rubles a year ago.

$900M Debt for Gas

MOSCOW (Prime-Tass) -- Moldova's breakaway Trans-Dnester republic owes Gazprom some $803.7 million for natural gas, Itar-Tass reported a source in the Trans-Dnester National Bank as saying Thursday.

The principal gas debt is $453.1 million, while the remaining $350.6 million is fines for late payment.

Gazprom earlier this month called on Moldova's government to take urgent steps to pay off the country's $272 million debt for gas in a letter to Moldovan President Vladimir Voronin.

Gazprom said in the letter that Moldova's debt, including Trans-Dnester's debt, totaled $900 million.

Metromedia Violations?

MOSCOW (Vedomosti, Reuters) -- Metromedia International Group, a New York-based communications company with interests in Russia, said Wednesday that certain employees may have broken the law.

The company said in a statement that it was investigating conduct by certain personnel at some of its business ventures in the Commonwealth of Independent States. No details were provided.

A Metromedia official who declined to be identified said the legal violations were connected with events that "took place some time ago in Russia."

Alexander Vronets, first vice president of the AFK Sistema holding, which has been looking to buy Metromedia assets, said the company's problems "could be expected."

Metromedia said that it has alerted the U.S. Justice Department and the Securities and Exchange Commission.

The possible violations did not affect Metromedia's financial condition and no restatements of results are expected, the company said.

Trading in Metromedia shares was halted Monday.

Svyazinvest Revenues

MOSCOW (Prime-Tass) -- State-controlled telecoms holding Svyazinvest's revenues from core operations should reach 109.8 billion rubles ($3.44 billion) next year, Svyazinvest deputy general director Vadim Belov said Thursday.

He said the company had 93.9 billion rubles in revenues from core operations this year and expects 129.2 billion rubles in 2004.

Svyazinvest's 2001 revenues from core businesses were 77.6 billion rubles.

Cellular Expansion

MOSCOW (Prime-Tass) -- Svyazinvest is considering entering the cellular market, deputy general director Vadim Belov said Thursday at a conference.

Svyazinvest companies control about 2 percent of the cellular communications market but the holding plans to considerably increase that share, Belov said.

Svyazinvest plans initially to develop its cellular services in the Urals and Volga federal districts.

Svyazinvest also plans to develop strategies to introduce the NMT-450 standard, he said.

Rostelecom Plans

MOSCOW (Prime-Tass) -- State telecoms company Rostelecom expects capital investments to reach $150 million in 2003, up from $80 million planned for this year, Vladimir Androsik, the company's deputy general director, said at a conference Thursday.

Rostelecom had originally planned its 2002 capital investment at $130 million, but later the company decided to use the remaining $50 million next year, Androsik said.

In 2003 Rostelecom plans to invest in the construction of fiber-optic lines, some of which would link Russia with the Baltics, Caucasus and Eastern Europe, Androsik said.

The company also plans to invest in extending throughput capacity and modernizing its network, he said.

MTS Investment Plans

MOSCOW (Prime-Tass) -- No. 1 cellular operator Mobile TeleSystems will invest $500 million per year in 2003 and 2004 to develop its network, Andrei Braginsky, head of investor relations at the company, said Thursday.

This year the volume of investment will also total $500 million, he said at a conference.

The number of MTS subscribers has reached 6 million, up from 3.4 million at the start of the year, Braginsky said, saying the company's network includes 4,102 base stations and 56 switchboards.

Last year the number of base stations stood at 2,125 and the number of switchboards at 31, he said.

Budget Surplus

MOSCOW (Prime-Tass) -- The federal budget's primary surplus, based on completed payments, beat estimates by 31 percent in January-September, totaling 436 billion rubles ($13.68 billion), the Finance Ministry said Thursday.

The surplus was equal to 5.5 percent of gross domestic product.

The budget originally called for a primary surplus of 333.3 billion rubles, or 4.2 percent of the preliminary gross domestic product estimate, in that period.

Tatneft Turkish Deal

ISTANBUL, Turkey (Reuters) -- Turkish oil refiner Tupras said Thursday it had signed a deal to buy 2.4 million metric tons (48,000 barrels per day) of crude in 2003 from oil major Tatneft.

Tupras said in a statement that the decision to buy followed a test purchase of 85,000 tons from Tatneft on the spot market.

Tupras gave no price for the deal.

China Timber Exports

MOSCOW (Prime-Tass) -- Russia supplied 9 million cubic meters of timber worth some $600 million to China in 2001, or 52 percent of China's total timber imports, Itar-Tass reported Deputy Foreign Minister Alexander Losyukov as saying Thursday.

Comparative figures were not available.

The supplies made up 8 percent of Russia's total exports to China in value, Losyukov said.

This year's supplies may exceed 15 million cubic meters, he said.

"Despite the impressive figures, one cannot say that we are totally satisfied with our cooperation in that sphere, above all because the vast majority of Russian supplies, up to 98 percent, are made up of rough timber," Losyukov said.

The main operators on the timber market are small dealers "inclined to primitive business methods and violations of Russian tax, customs and migration laws," he said.

UHM in Tender

MOSCOW (Reuters) -- Machine builder United Heavy Machineries (OMZ) will take part in a tender to build two reactors for the Tian-Wan nuclear power plant in eastern China, an OMZ spokesman said Thursday.

The company has already supplied one reactor and one reactor vessel to the nuclear plant.

"The supply of the reactor vessel to China paves the way for the delivery of the third and fourth reactors to Tian-Wan," OMZ spokesman Andrei Onufriyev said.

Under its current $130.5 million contract with China, OMZ is to produce 9,000 metric tons of equipment for Tian-Wan, 6,200 tons of which have already been manufactured and shipped.

$20M Sistema Credit

MOSCOW (Prime-Tass) -- Raiffeisenbank Austria has opened a $20 million credit line to the AFK Sistema holding, the bank's press service said Thursday.

The credit line has been opened until 2010, the bank said.

AFK Sistema will use one of its office buildings as collateral for the loan and the funds will be used for construction and real estate projects.

PM Orders Bank Laws

MOSCOW (Prime-Tass) -- Prime Minister Mikhail Kasyanov on Thursday ordered the government to prepare legislative amendments aimed at encouraging competition in the banking sector.

Kasyanov did not elaborate on what changes he had in mind, but he said that the banking system should become more liberal.