* Q3 net income up 20 pct to record 15 billion roubles
* Revenue rises 12.3 pct to 71.2 bln roubles
* Core profit margin jumps to 45.1 pct from 41.9 pct
* Strong results may help offset weaker market at IPO
By Maria Kiselyova
MOSCOW, Nov 8 (Reuters) - Russia's No. 2 mobile phone operator MegaFon reported a sharp rise in profits, increased subscriber numbers and reduced costs ahead of a roadshow for its planned $2 billion IPO.
The company, controlled by Russia's richest man Alisher Usmanov, said on Thursday its net profit in the three months to end-September was 15 billion roubles ($476 million), up 20 percent from the same period last year.
MegaFon hopes to go public in London and Moscow this year, but several sources familiar with the matter said the company may have to delay the sale until 2013 if it does not get a green light from UK regulators soon.
The company already postponed its roadshow in order to include the third-quarter results into its IPO prospectus. A new date has not yet been set.
Alexander Vengranovich, an analyst at Moscow-based brokerage Otkritie, said if MegaFon's IPO goes ahead this year it will likely have to be priced at a discount to rival MTS.
"By the year end investors are cautious... especially if the valuation is high," Vengranovich said. "I think (investors) will want a discount to MTS - this may be a key stumbling block for MegaFon."
Vengranovich expected a price range between $16 and $18 per share, with the low end of the range implying a 10 percent discount to MTS, based on a 2012 EV/EBITDA multiple.
Bahrain-based investment firm Arcapita this week withdrew a planned London listing of its PointPark Properties (P3) unit, suggesting the gap in price expectations between buyers and sellers remains wide.
Scandinavian telecoms group Teliasonera is a minority shareholder in MegaFon and was expected to sell shares in the IPO. MegaFon would also sell stock acquired in its buyout of minority owner Mikhail Fridman last April.
The strong results should help MegaFon achieve the $12-$16 billion valuation it has been aiming for, despite a weakening in the global stock markets, analysts said.
"I think the results will help them to remain in the valuation range they previously sought," said Sergei Libin, an analyst at Raiffeisenbank.
MegaFon, which has 27 percent of Russia's mobile market, has recently outpaced listed competitors MTS and Vimpelcom in terms of Russian sales growth after investing aggressively in infrastructure in recent years to improve quality and attract customers. It took the number two spot from Vimpelcom in 2010.
MTS and Vimpelcom will report third-quarter earnings next Wednesday.
MegaFon reported a rise in core profit margin to 45.1 percent from 42.3 percent in the second quarter and compared to 41.9 percent a year ago.
Its third-quarter revenue grew by more than 12 percent to around 71 billion roubles, driven by an increase in its subscriber base and growing demand for mobile data.
An increase in sales, as well as a core profit gain on the back of lower operating costs, helped to drive profits as MegaFon benefitted from lower subscriber acquisition costs and a reduction in capital expenditures.
Its core profit, or operating income before depreciation and amortisation, rose 21.1 percent to 32.1 billion.