Golden Telecom raises its full year 2007 forecast

Golden Telecom raises its full year 2007 forecast on the back of strong second quarter 2007 results with a 51% year-on-year increase in revenues and 46% increase in net income compared to 2Q06

MOSCOW, Russia – Golden Telecom, Inc. (NASDAQ: “GLDN”), a leading facilities-based provider of integrated telecommunications and Internet services in major population centers throughout Russia and other countries of the Commonwealth of Independent States (“CIS”), today announced its financial and operating results for the second quarter of 2007.

Commenting on today’s announcement, Jean-Pierre Vandromme, Chief Executive Officer of Golden Telecom, said, “The results of the second quarter of 2007 prove that Golden Telecom is successfully executing its strategy. Our revenues grew 51% year-on-year, while the profitability of our business grew in step, with net income up 46% when compared to the second quarter of 2006. Major corporate developments of this quarter include following:

• On May 28, we completed the acquisition of a 51% stake in Corbina Telecom effectively closing one of the hallmark transactions in the Russian telecom industry. The acquisition of Corbina Telecom gave us significant penetration to the fast growing broadband market and will considerably accelerate our growth;
• We began the construction of Fiber to the Building (“FTTB”) networks in 20 cities. In 12 of them, including Moscow and St. Petersburg, the deployment of fiber will be completed before the end of 2007. This is part of our “Triple 65 project” announced previously. We plan to enable broadband access and Triple-play services provision for 65% of the households living in the 65 largest cities of Russia and Ukraine. The networks will cover approximately 15.6 million households with 42.3 million people;
• We have taken the next step in rolling out our consumer product strategy with the introduction of VoIP over the Golden WiFi network utilizing WiFi/GSM dual mode phones. This introduction greatly extends the utility of the Golden WiFi network for the consumer market;
• Corbina Telecom launched IPTV services which bring additional media distribution capabilities to Golden Telecom and with it the opportunity for fast growth in this target market;
• In June, we began testing Digital Video Broadcasting Terrestrial (“DVB-T”) equipment in Moscow. We plan to make digital TV available to all of Moscow households;
• In June we amended our Stock Appreciation Rights (“SAR”) program in a manner which allowed us to greatly reduce earnings volatility in our operational results from share price movements, but at the same time let us provide key employees with equity based incentives;
• The Board has approved an Open Market Share Buy-Back Program to support the Stock Options Plan. Up to 1 million shares of its common stock may be repurchased by the Company in support of the equity plan, subject to market conditions and other factors.

Based on the good results in the second quarter 2007, we are raising our forecast for the full year of 2007 for revenue growth from 35-40% to the mid-40s in percentage terms and for EBITDA growth from 30-35% to around 40%. Looking ahead, we expect our revenues to grow at around 35% in 2008, with EBITDA growth in percentage terms in the mid-40s”.

Link: Golden Telecom