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. Last Updated: 07/27/2016

Rising Sales Boost MTS Q1 Profits

Mobile services provider Mobile TeleSystems reported on Thursday an above-forecast first-quarter net profit due to rising sales and said it had raised its full-year revenue growth outlook.

MTS's profit under generally accepted accounting principles more than doubled to $448.6 million from the same period last year, and was four times more than its $110.3 million revised fourth-quarter profit.

MTS, controlled by services conglomerate Sistema, said earlier Thursday that it had restated its 2006 results to reflect a $170 million provision for the potential costs of a deal in Kyrgyzstan.

The potential loss stems from MTS's attempt to obtain control over Kyrgyz mobile operator BiTel.

In 2005, MTS bought a 51 percent interest in Tarino Limited, which at that time controlled 100 percent of BiTel.

MTS also granted a put option allowing the seller, a Kazakh entity called Nomihold, to sell the remaining 49 percent stake in BiTel for $170 million to MTS. Tarino then lost control over BiTel, but Nomihold is still seeking to exercise the option via the courts.

As a result of the restatement, MTS's fourth-quarter profit fell to $110.33 million from the previously announced $280.33 million. Its full-year profit fell to $1.08 billion from $1.25 billion.

"The rise in volume of our services, the reinforcement of our brand and the increase in operational effectiveness in all our markets create a solid base for further growth," CEO Leonid Melamed was quoted as saying.

Melamed said MTS had raised its forecast for revenue growth in 2007 to 22 percent from a previous estimate of 17 percent. MTS's 2006 revenues were $6.38 billion.