Sistema announces unaudited financial results for the second quarter ended June 30, 2012
Moscow, Russia -
September 13, 2012 - Sistema JSFC ("Sistema", the "Group" or the
"Company") (LSE: SSA), the largest diversified publicly-traded
investment company in Russia and the CIS, today announces its
unaudited consolidated US GAAP financial results for the second
quarter ended June 30, 2012.
The Group's consolidated results
for the second quarter of 2012 were impacted by a 10.8%
year-on-year rouble depreciation against the US dollar. A non-cash
one-off loss ("one-off") of US$ 1,079.0 million was also recognised
relating to impairments and provisions with regard to MTS'
operations in Uzbekistan.
- Consolidated revenues of US$ 8.1
billion, down 6.3% YoY
- OIBDA without one-off down 7.4%
YoY to US$ 2.0 billion, with an OIBDA margin of 25.1%
- Operating income without one-off
down 7.2% YoY to US$ 1.2 billion, with an operating margin of
- Net loss attributable to the
Group of US$ 161.9 million and net income without one-off of US$
- Net debt at the Corporate
Holding level reduced to US$ 5.3 million as of June 30, 2012 from
US$ 1,390.5 million as of June 30, 2011.
KEY CORPORATE HIGHLIGHTS FOR
THE SECOND QUARTER
- Signed an agreement with OJSC
INTER RAO UES regarding the terms of the reorganisation of OJSC
Bashkirenergo. Following the reorganisation, Bashkirenergo will be
split into JSC Bashkirian Power Grid Company, which will combine
power grid assets, and OJSC Bashenergoactiv, which will integrate
power generation assets. In accordance with the agreement, INTER
RAO UES will own more than 75% of the voting shares of
Bashenergoactiv, while more than 75% of the voting shares of
Bashkirian Power Grid Company will be owned by Sistema. INTER RAO
UES will also pay Sistema an amount of up to RUB 14 billion in cash
and promissory notes.
- Announced a joint venture with RZ
Agro Ltd, an agricultural company controlled by certain members of
the Louis-Dreyfus family. The joint venture consists of
agricultural assets of both parties totalling approximately 90,000
- Agreed to join forces with MTS in
developing and managing the multimedia content portal Stream.ru
(formerly Omlet.ru). Sistema contributed RUB 496.1 million to
Stream's charter capital and will obtain a 55% stake, subject to
- Issued a US$ 500 million Eurobond
with an annual interest rate of 6.95% and a maturity in May
- Commenced a US$ 300 million
buyback programme in respect of Sistema's Global Depository
Receipts and ordinary shares. The Company spent approximately US$
100 million during this period.
- The AGM approved payment of
annual dividends of RUB 0.28 per ordinary share for the twelve
months ended December 31, 2011, amounting to a total of RUB 2.7
billion (approximately US$ 82.3 million).
- Elected three new members to the
Board of Directors - Brian Dickie, Jeannot Krecké and Marc
Holtzman, and therefore expanding the number of Independent
Directors on the Board to eight out of 13 members. Detailed
biographies can be found on Sistema's corporate web site.
Mikhail Shamolin, President and
Chief Executive Officer of Sistema, commented:
"We are pleased to report second
quarter results reflecting a solid operational performance in our
key investments. Despite the effects of rouble depreciation and
one-off write down in MTS, we are seeing consistent and sustainable
growth in our portfolio companies.
In the reporting quarter MTS has
delivered excellent profitability with margins excluding one-off
increasing to 44.4% year-on-year as the company continued to
benefit from its focused strategy and growth in voice and data
products. Similar operational momentum was maintained in Bashneft,
which increased production by 2% year-on-year and optimised its
downstream sales, which helped mitigate some of the impact from
softer oil prices and higher export duty in the second quarter.
The Developing Assets portfolio
also reported some key milestones. Detsky mir continued its store
expansion with 11 new openings resulting in revenue growth of 12%
year-on-year in rouble terms. It reduced its expenses and was able
to significantly narrow down OIBDA loss despite seasonal effects.
RTI completed its consolidation of SITRONICS and continued to
progress its merger plans with NVision. The merger benefits for the
enlarged RTI are already very evident as it lowered its SG&A by
41% year-on-year and reduced debt by 17%.
Sistema continues to review a
number of sector opportunities and our deal pipeline is expanding,
some of which we hope to realise in the near future. In the second
half of 2012, our focus will also be on resolving the situation
around our Indian telecom operations. Auction prices announced by
the regulator are unjustifiably high and no decision on auction
participation will be taken until our case is heard in our Curative
Petition to the Supreme Court."
the full version of Press - release
Sistema's management will host an
analyst conference call today at 9 am (New York time) / 2 pm
(London time) / 3 pm (CET) / 5 pm (Moscow Time) to present and
discuss the second quarter results.
The dial-in numbers for the
conference call are:
UK/ International: + 44 208
+1 480 629 9835
And quote the conference call
title: "Sistema 2Q 2012 Financial Results".
A replay of the conference call
will be available on the Company's website www.sistema.com for 7 days after
For further information,
please visit www.sistema.com or
Tel: +7 (495) 692 11
+7 (495) 730 1705
Sistema is the largest diversified public financial
corporation in Russia and the CIS, which invests in and is a major
shareholder of companies serving over 100 million customers in the
sectors of telecommunications, high technology, oil and energy,
radars and aerospace, banking, retail, mass-media, tourism and
healthcare services. Founded in 1993, the company reported revenues
of US$ 8.1 billion for the second quarter of 2012, and total assets
of US$ 43.6 billion as at June 30, 2012. Sistema's global
depository receipts are listed under the symbol "SSA" on the London
Stock Exchange. Sistema's ordinary shares are listed under the
symbol "AFKS" on the MICEX-RTS Stock Exchange, and under the symbol
"SIST" on the Moscow Stock Exchange (MSE). Sistema was ranked
number 315 in the 2011 edition of the Fortune Global 500 list.
Some of the information in this
press release may contain projections or other forward-looking
statements regarding future events or the future financial
performance of Sistema. You can identify forward looking statements
by terms such as "expect," "believe," "anticipate," "estimate,"
"intend," "will," "could," "may" or "might" the negative of such
terms or other similar expressions. We wish to caution you that
these statements are only predictions and that actual events or
results may differ materially. In addition, there is no assurance
that the new contracts entered into by our subsidiaries referenced
above will be completed on the terms contained therein or at all.
We do not intend to update these statements to reflect events and
circumstances occurring after the date hereof or to reflect the
occurrence of unanticipated events. Many factors could cause the
actual results to differ materially from those contained in our
projections or forward-looking statements, including, among others,
general economic conditions, our competitive environment, risks
associated with operating in Russia, rapid technological and market
change in our industries, as well as many other risks specifically
related to Sistema and its operations.