Sistema Reports 2009

Consolidated revenues were up 64.7% year-on-year to US$ 6.4B

April 26, 2010

3 Min Read

MOSCOW -- Sistema (the “Group”) (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, which invests in, and is a major shareholder of, companies operating in different industries, today announced its consolidated US GAAP financial results for the fourth quarter and audited financial results for the full year ended December 31, 2009.

Fourth quarter highlights

  • Consolidated revenues up 64.7% year-on-year to US$ 6.4 billion

  • Consolidated OIBDA increased by 93.1% year-on-year to US$ 1.6 billion, with an OIBDA margin of 24.9%

  • Operating income more than tripled year-on-year to US$ 866.4 million, with an operating margin of 13.5%

  • Consolidated net income attributable to the Group increased year-on-year to US$ 176.8 million

  • The Oil & Energy business unit contributed US$ 2.6 billion and US$ 1.2 billion to the Group’s consolidated revenues and OIBDA, respectively

Full year highlights

  • Consolidated revenues up 16.7% year-on-year to US$ 18.8 billion

  • Consolidated OIBDA up 24.8% year-on-year to US$ 6.8 billion, with an OIBDA margin of 36.3%

  • Operating income increased by 37.6% year-on-year and amounted to US$ 4.3 billion, with an operating margin of 23.0%

  • Consolidated net income attributable to the Group of US$ 1.6 billion, compared to US$ 0.1 billion in the previous year

  • Total assets up 44.1% year-on-year to US$ 42.0 billion, including US$ 12.0 billion from the acquisition of Bashkir companies

Key corporate highlights for 2009

  • Acquired controlling stakes in Bashkir Oil and Energy Group for RUB 66.8 billion (approximately US$ 2.0 billion)

  • Sold controlling stakes in JSC Ufaneftechim (47.18%), JSC Novoil (61.57%), JSC Ufaorgsintez (51.49%) and JSC Ufimskiy NPZ (55.58%) to ANK Bashneft

  • Completed the sale of a 50.91% stake in Comstar UTS to MTS for a total consideration of RUB 39.15 billion (approximately US$ 1.32 billion) or RUB 184.02 (approximately US$ 6.21) per ordinary share

  • Sold a controlling stake in Sistema-Hals to VTB Bank and signed a shareholder agreement defining the terms of cooperation on investment projects of Sistema-Hals Group and terminating Sistema Group’s obligations and guarantees with regard to Sistema-Hals Group’s debt to VTB Bank

  • Placed RUB 20 billion second series five-year bond with a put option exercisable in three years, with an annual coupon rate set at 14.75%

  • Placed RUB 19 billion third series seven-year bond with a put option exercisable in three years following the sixth coupon payment, with an annual coupon rate set at 12.5%

  • Signed a non-binding MOU with Svyazinvest and Comstar UTS, and initiated the negotiations process over the reorganisation of certain assets. The outcome of these negotiations may result in the disposal of Sistema’s stake in Sky Link, the sale of Comstar UTS’s stake in Svyazinvest, the increase of Comstar UTS’s ownership in MGTS, and the restructuring of certain indebtedness.

Leonid Melamed, President and Chief Executive Officer of Sistema, commented: “2009 was a defining year for us. We completed a number of large-scale transactions which have significantly reshaped Sistema’s investment portfolio. As a result, we not only kept what we believe to be our most promising assets in the portfolio, but also transformed cash flow streams at Sistema, strengthened our financial position and increased shareholder value of the Company. We are effectively managing our debt position, and we have significantly optimised our debt maturity profile and currency structure of the portfolio. This has allowed us to look with confidence towards investing into our growth areas. We expect that in the near future our investment portfolio, which consists of oil, telecommunications, infrastructure and consumer assets will be optimally structured and will continue to create value.”

Sistema JSFC (London: SSA)

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