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UPDATE 2-MTS Q1 earnings beat fcast on forex, usage growth

 * Q1 net profit $381 mln vs $357 mln market view
 * Compares with net loss of $53.5 mln a year ago
 * Earnings lifted by sales growth, forex
 * Mobile sales up 18 pct to $2.1 bln
 
 (Writes through, adds details, analyst comment, share price)
 By Maria Kiselyova
 MOSCOW, June 8 (Reuters) - MTS MBT.NMTSI.MM, Russia's
top mobile phone operator, posted forecast-beating results on 
forex gains, increased usage and rising subscriber numbers,
which it expected to underpin future growth.
 The global downturn had a moderate impact on the Russian
telecoms sector, mainly through a sharp depreciation of the
rouble, while sales in local currencies continued to grow,
albeit at a slower pace.
 Regional telecoms sector valuations are at their cheapest
level for many years, but also need to justify potential growth
rates, Citigroup said in a comment on the results, noting that
MTS' Russian mobile revenue growth was two percentage points
above its 14.2 percent forecast.
 MTS, which reported on Tuesday a first-quarter net profit of
$381 million against a $357 million market view and a $53.3
million year-ago loss, said a stronger rouble resulted in a $77
million forex gain after a $489 million loss a year ago.
 As the rouble has recovered from a year-ago slump on the
back of stronger prices for oil -- Russia's key export --
Russian companies have recorded foreign exchange gains, giving
them favourable comparisons with the year-earlier periods.
 At 1357 GMT, MTS' Moscow-listed stock MTSI.MM was trading
up 0.1 percent, while its New-York listed stock opened 1 percent
higher, outperforming rival Vimpelcom VIP.N, which fell 1
percent.
 
 HIGHER SALES
 The appreciation in the rouble and other local currencies
helped MTS to lift first-quarter revenues by 23 percent
year-on-year to $2.61 billion.
 Sales also found support from a higher mobile subscriber
base and increased usage, as mobile segment revenues rose 18
percent to $2.07 billion.
 "Overall, increasing usage, greater adoption of data
products, subscriber additions and our extension into new
products and services continue to support our growth, MTS said.
 "While we do not yet see a distinct impact on our business
from the improving economic environment, we continue to
outperform our peers in our markets of operation."
 MTS said the average mobile traffic per one subscriber rose
by 6 minutes on its key, Russian market, over the past 12
months, to stand at 211 minutes per month.
 Increased sales of handsets also helped, said MTS, which
opened more than 1,000 stores over the past year.
 The low-marginal retail business continued to dilute its
margins which, based on the operating income before depreciation
and amortisation (OIBDA), lost 1 percentage point to stand at
44.1 percent, in line with analysts forecasts.
 MTS, part of oil-to-telecoms conglomerate Sistema SSAq.L,
is Russia's largest mobile operator by sales and subscriber
numbers, and also operates in Armenia, Belarus, Ukraine,
Turkmenistan and Uzbekistan.
 As of April 30, it had 103 million subscribers, according to
market research group AC&M, compared with 97 million a year ago.
 (Reporting by Maria Kiselyova; editing by Simon Jessop)

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