Russian regional telecom company Sibirtelecom on Monday reported a 57.6 percent drop in first-half net profit, hit by higher operating expenses and foreign exchange losses.

Net profit fell to 851 million roubles ($28.02 million) from 2.0 billion roubles in the first half of 2008, as sales did not keep pace with growing operating expenses. Revenue rose 3.3 percent year-on-year to 19.1 billion roubles, while costs jumped 8 percent to 16.4 billion roubles, Sibirtelecom said in a statement.

It also incurred 428 million roubles of non-cash foreign exchange losses on a dollar-denominated portion of its debt. As of June 30, its net debt stood at 21.2 billion roubles, down 7.6 percent in the year to date.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) fell 4.1 percent to 6.98 billion roubles, and the EBITDA margin slid to 36.6 percent from 39.4 percent.

Sibirtelecom, controlled by national telecoms group Svyazinvest, is Russia's No.6 cellular carrier, with 5.3 million mobile subscribers.

($1=30.37 ROUBLE)

(Reporting by Natalya Shurmina; writing by Maria Kiselyova; editing by Simon Jessop)