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Sistema JSFC

August 27, 2015

Unaudited financial results for the second quarter ended June 30, 2015

Moscow, Russia – August 27, 2015 – Sistema JSFC (“Sistema” or the “Company”, together with its subsidiaries, “the Group”) (LSE: SSA), a publicly-traded diversified holding company operating primarily in Russia and the CIS, today announces its unaudited consolidated IFRS financial results for the second quarter ended June 30, 2015. 

SECOND QUARTER FINANCIAL HIGHLIGHTS  

  • Consolidated revenues up 10.8% YoY to RUB 164.0 billion
  • Adjusted OIBDA down 0.9% YoY to RUB 44.3 billion with an adjusted OIBDA margin of 27.0%
  • Net income attributable to the Group of RUB 15.5 billion
  • Net debt at the Corporate Holding level amounted to RUB 44.8 billion as at June 30, 2015
  • As at June 30, 2015, cash position at the Corporate Holding level amounted to RUB 24.3 billion, excluding RUB 34.1 billion represented by deposits and financial instruments.

KEY CORPORATE HIGHLIGHTS IN THE SECOND QUARTER OF 2015 AND AFTER THE REPORTING PERIOD 

  • In April, Sistema Finance Investments OJSC, Sistema’s wholly owned subsidiary, acquired 27,800,000 of Sistema’s ordinary shares for approximately RUB 456 million. The shares were purchased for general corporate purposes, including the employee incentive programme. As a result of this transaction, the number of Sistema shares held by the Group amounts to approximately 2.5% of Sistema’s total issued capital. 
  • In April, Sistema received an additional RUB 12.9 billion in cash assets and financial instruments for the recovery of damages from Ural-Invest LLC, suffered by Sistema as a result of the loss of the Bashneft shares. 
  • In June, the Annual General Meeting of Shareholders (“AGM”) approved a total dividend payment for Sistema's shares at RUB 4.54 billion, representing a payment of RUB 0.47 per ordinary share or RUB 9.4 per GDR. The dividends were paid in full in July 2015. 
  • In June, Sistema entered into exclusive discussions with Reliance Communications (RCOM) on a potential merger between the Indian telecom business of Sistema Shyam TeleServices Ltd. and RCOM, through a stock swap. 
  • In July, Sistema’s subsidiaries LLC Sistema Telecoms Assets and JSC RTI (“sellers”) signed legally binding agreements to sell their respective stakes in JSC NVision Group to PJSC MTS. MTS will acquire 100% of NVision, including its debt obligations, for up to RUB 15 billion. The transaction was approved by the Boards of Directors of the sellers and MTS, and the Special Committee of independent directors under the MTS Board of Directors. Merrill Lynch International acted as financial adviser to the Special Committee to issue a Fairness Opinion on the transaction. 

Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented: 

“Sistema has reported a solid set of quarterly results demonstrating healthy business development across our portfolio companies amid market headwinds. The delivery on our strategic objectives resulted in a double-digit year-on-year increase in consolidated revenues and stable OIBDA. Our second quarter numbers reflect growing data services consumption at MTS as it continues to strengthen its market leading position and develop its own retail chain, the consolidation of Segezha Group, the successful implementation of Detsky mir’s expansion strategy and growth at RTI. Furthermore, our Indian subsidiary SSTL delivered 11.9% year-on-year revenue growth in Indian rupees, while six out of nine circles where SSTL operates broke even. 

In June, we entered into exclusive discussions with Reliance Communications (RCOM) on a potential merger with SSTL. After the end of the second quarter, we completed the restructuring of our high-tech assets with NVision being transferred to MTS. As a result, MTS will become the only operator in Russia to own its billing system, which helps it to further optimise its cost base and introduce new tariffs ahead of competitors. 

Receiving the additional RUB 12.9 billion from Ural Invest was among the key highlights of the second quarter. Our cash position was further strengthened through a dividend inflow of approximately RUB 20.3 billion from the Group’s subsidiaries after the reporting period. These accumulated resources provide us with a strong advantage to acquire undervalued assets and expand our portfolio of investments in the second half of 2015.”  

Download full version of the press release

Conference call information 

Sistema’s management will host an analyst conference call today at 10.00 am (EST)/ 3.00 pm (London time) / 4.00 pm (CET)/ 5.00 pm (Moscow time) to present and discuss the second quarter 2015 results. 

The dial-in numbers for the conference call are:

UK/ International: +44 (0)20 3364 5381
US: +1 646 254 3361
Conference ID: 1570694 

Alternatively, you can quote the conference call title: “Sistema Second Quarter 2015 Financial Results”. 

A replay of the conference call will be available on the Company’s website www.sistema.comfor 7 days after the event. 

For further information, please visit www.sistema.comor contact: 

Investor Relations

Evgeniy Chuikov

Tel: +7 (495) 692 11 00

chuikov@sistema.ru

Public Relations

Sergey Kopytov

Tel.: +7 (495) 228 15 27

kopytov@sistema.ru

 

 

 

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