Continued macroeconomic problems in the Ukraine hit profits at Russia-based operator MTS in the second quarter.

Group earnings fell 2.1 percent year-on-year to RUB 42.3 billion (€584 million), while net profits were down more than a fifth to RUB 17 billion (€235 million).

The decreases were mainly due to the performance of its business in Ukraine.

Operations in the country have ceased in Crimea, following its annexation by Russia, while the local currency has suffered from devaluation. Sales fell six percent in hryvna.

Group revenues rose 3.9 percent to RUB 102.7 billion (€1.4 billion), however.

Sales in its core Russian market were up 4.4 percent thanks to growth in mobile data services as well as handsets and accessories.

The operator said it was trying hard to drive people to go to their stores “in light of recent changes in the mobile retail landscape”.

There was also sales growth in Turkmenistan, Uzbekistan and Belarus, but Armenia saw revenues fall 2.1 percent.

[Read more: MTS eyes M2M, cloud and big data with NVision acquisition]

President and CEO Andrei Dubovskov said: “Data adoption continues to drive growth, while recent changes in our approach to distribution have helped boost handset revenue.”

The company reiterated its full-year guidance.

Dubovskov added: “While we do see upside to revenue performance, we believe it is prudent to reiterate the guidance in light of the uncertain macroeconomic environment and sustained currency volatility in our markets.”

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