Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Business in Brief

Economy Slows

MOSCOW (Reuters) -- Economic growth slowed to 5 percent year-on-year in October, the slowest since February 2003 and down from 5.6 percent in September, Moscow Narodny Bank's monthly GDP indicator showed Thursday.

MNB also estimated economic growth slowed to 6.2 percent in the third quarter, the weakest rate since the second quarter of 2003 and down from 6.9 percent in the second quarter this year.

"Clearly the latest MNB survey data signal a marked slowing in the rate of growth across the Russian economy and, at a suggested rate of 5 percent for October, remains below trend," MNB economist Paul Timmons said.

MNB compiles its GDP indicator based on its services and manufacturing sector purchasing managers indexes.

Weak orders and rising cost pressures caused the manufacturing headline figure to fall for the fourth consecutive month. And services sector growth was the slowest since January 2003, the PMI showed.

Authorities see growth at 6.9 percent this year, down from 7.3 percent last year.

Golden Revenues Surge

MOSCOW (Reuters) -- Russia's largest independent fixed-line telecom operator, Golden Telecom, said Thursday it had revised upward its guidance on 2004 revenue and capital expenditure due to the company's healthy performance.

Golden Telecom, in which Norway's Telenor holds 20 percent, said in a statement its third-quarter net profit was $16.1 million, up 29 percent on the same period a year earlier.

Revenues increased 70 percent to $152.8 million.

"Due to strong results across major product and segment lines … the previous [2004] revenue guidance of $510 million to $530 million has been increased to $580 million to $590 million," CFO Brian Rich said in the statement.

"Golden Telecom is revising its 2004 guidance for capital expenditures from between $85 million and $95 million to between $110 million and $115 million. The company expects capital expenditures as a percentage of total revenue to remain in the previous range of 18 to 19 percent."

The money will be spent to build an inter-regional fiber optic network, on deployment of a wireless local access network in regional markets and on purchase of equipment.

Sakhalin-2 Lifts Output

MOSCOW (Bloomberg) -- Royal Dutch/Shell Group and its partners boosted oil production at the Sakhalin-2 project, off Russia's Pacific shore, by 10 percent in the first 10 months of the year, Interfax said, citing an unidentified local official.

The group, known as Sakhalin Energy, pumped 1.35 million tons of oil in the period, or an average of 32,350 barrels per day, compared with 1.22 million tons a year ago, the official in the Sakhalin region's administration told Interfax. The group plans to pump 1.5 million tons of oil in the full year of 2004, Interfax said.

Sakhalin exports all its oil to Japan, Korea, China and Taiwan, Interfax said.

The Shell-led group, which also includes Mitsui & Co. and Mitsubishi Corp., is building a gas-liquefaction plant on Sakhalin Island and plans to sell LNG to Japan, Korea and the United States.

Morgan Stanley Picked

MOSCOW (Reuters) -- Russia has appointed U.S. bank Morgan Stanley as valuer in the deal to hand over state-owned oil firm Rosneft to gas monopoly Gazprom, Interfax agency quoted a senior official as saying Thursday.

"A commission met in the Federal Property Fund on Wednesday and chose Morgan Stanley as the valuer," Property Fund deputy head Yury Medvedev said. "Today the Federal Property Fund will sign a corresponding agreement."

The government will transfer Rosneft as part payment for an increased stake in Gazprom. Russia says it must have a controlling stake in the world's largest gas firm before it allows foreigners to trade in the company's ordinary shares.

Gazprom has hired Dresdner Kleinwort Wasserstein to value Rosneft.

Sibneft Gets $150M

MOSCOW (Bloomberg) -- Sibneft, Russia's fifth-largest oil producer, got a $160 million loan from eight lenders led by ABN AMRO to refinance existing debt.

"This deal is a refinancing," Sibneft spokesman John Mann said from Moscow. "It doesn't represent an increase in debt."

Sibneft will pay an interest margin of 1.75 percentage points greater than the London interbank offered rate on the two-year loan, people involved in the transaction said. That compares with an interest margin of 3.25 percent the company paid for a $150 million loan in December 2002 that matures next year, according to Bloomberg data. Three-month Libor currently is 2.2 percent.

The company's net debt was cut to $1.4 billion by June 30, Standard & Poor's said.

EBRD Eyes MTS Loan

MOSCOW (Reuters) - The European Bank for Reconstruction and Development (EBRD) is considering a $150 million loan to Russia's top mobile operator, Mobile TeleSystems, the bank said on Thursday.

The loan, to have a maturity of up to 7 years, will be reviewed by the EBRD board Dec. 7, the EBRD said on its website

"Through this transaction, the bank will be supporting the geographical expansion of MTS into the underserved regions of the Russian Federation and supporting competition in these areas," the EBRD said.

MTS' 2004 capital expenditure is $1.4 billion and the bank said next year's should exceed that figure.

Apart from Russia, MTS has operations in Ukraine, Belarus and Uzbekistan. It is looking to expand in CIS states as Russia's mobile phone boom is expected to start to slow from next year.