Net income analysis
The decrease in financial expenses in 2013 was driven by higher levels of interest expenses being capitalised.
Profit before tax amounted to RUB 32.1 billion in the full year of 2013. This represents a year-on-year decrease of 24%. The following had an impact on gross profit in the full year of 2013:
- the high base effect in 2012, which was linked to the recognition of revenue from cancelling an option between Svyazinvest and Vnesheconombank, as well as selling Sberbank’s shares at a profit;
- the deconsolidation of the subsidiary, GlobalTel.
In the full year of 2013, income tax contributions decreased by 14% year-on-year to RUB 8.0 billion. The effective income tax rate was 25% for the full year, compared to the 20% rate specified by the Tax Code. The following factors contributed to the higher effective tax rate:
- The reversal of intergroup income from recovery reserves to account for the recovery of bad debts from Skylink. The tax rate was not reduced in this case since such an adjustment does not have any impact on the taxable base of a separate legal entity;
- additional tax on mobile subsidiaries, which was accrued in the fourth quarter for all the previous periods. This relates to the decision to dispose of mobile assets.
The Group’s net profit amounted to RUB 24.1 billion in the full year of 2013.