Moscow, Russia - 11 September, 2008 - Sistema-Hals (LSE, MICEX, RTS: HALS), one of the largest real estate development companies in Russia and the CIS, today announces its unaudited consolidated financial results for the first half of 2008 in accordance with US GAAP. 

In the six months to June 30, 2008, Sistema-Hals' consolidated revenues increased by 75% to USD 227.1 million, up from USD 129.8 million in the first half of 2007.  Consolidated OIBDA for the first six months of 2008 increased to USD 27.8 million, compared to a negative amount of OIBDA of USD 85.8 million in the same period last year.

FINANCIAL HIGHLIGHTS

Sistema-Hals also announces the result of an independent valuation of its project portfolio carried out by Cushman & Wakefield Stiles & Riabokobylko (C&WS&R). As at 1 July 2008, Sistema-Hals' stake in properties and projects was valued at USD 3.768 million.  This compares to a valuation at 1 January 2008 of USD 3.746 million.

Commenting on the financial and operational results for the first half of 2008, Sergey Shmakov, CEO of Sistema-Hals, said:

"Sistema-Hals has had an excellent first half of 2008 with strong growth across the businesses resulting in a significant increase in revenues during the period. During 2008, the Company has continued to focus its efforts on rebalancing the portfolio with the aim of increasing the share of premium projects, boosting project sizes, improving portfolio management efficiency and increasing future rental income.  Today's results provide a strong endorsement of this strategy." 

He added: "As part of the on-going rebalancing of the portfolio we have made a number of important project acquisitions, but at the same time we have also sold some non-core assets and as a result, the uplift in the valuation of the portfolio has been less than in previous periods.  Going forward, however, this process will leave the portfolio well positioned to generate significant value in an increasingly competitive marketplace."