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Comstar Triples Q1 Profits

Fixed-line telecoms operator Comstar easily beat forecasts by more than tripling first-quarter profits thanks to higher sales, lower debt costs and a one-off gain.

The company said its first-quarter net profit rose to $60.3 million versus $39.7 million in a Reuters poll on analysts, while consolidated revenues were up 7 percent year on year in ruble terms to $407.0 million.

In the fourth quarter, the company, controlled by mobile phone operator MTS, missed market expectations but said it expected mid-single-digit revenue growth in 2010 as the economy recovers.

It gave no forecasts in its first-quarter report.

It said revenues rose on the back of growing domestic and international long-distance and calling-party-pays traffic volumes, as well as the growth in the broadband Internet.

Operating expenses, when excluding depreciation and amortization costs, were down 3 percent year on year in ruble terms, reflecting a $19 million reversal of previously accrued expenses for a canceled 2008 phantom option program.

Interest expenses also fell 9 percent quarter on quarter and by 28 percent year on year, reflecting repayment of certain borrowings and the reduction in interest rates on a Sberbank loan.

The company also avoided posting forex losses similar to 2009 and said core earnings were up 24 percent year on year in ruble terms to $178.8 million.

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