Moscow, Russia - April 28, 2008 - Sistema-Hals (LSE, MICEX, RTS: HALS), one of the largest companies on the real estate market in Russia and the CIS, today announces its unaudited consolidated financial results for the full year of 2007 in accordance with US GAAP.

Financial Highlights

Sistema-Hals' consolidated revenues for the full year 2007 increased by 59.8% year-on-year to USD 452.2 million, compared to USD 282.9 million for the full year 2006, driven by the strong performance of the Real Estate Development division.

Commenting on the results for the full year 2007, Felix Evtushenkov, President of Sistema-Hals, said:

"During the year of 2007 we concentrated our efforts on enhancing the efficiency of execution of our development projects. This focus on construction program implementation and our marketing efforts in the favourable market conditions allowed us to deliver on strong results. Today we are pleased to report a solid 59.8% increase in our revenues in comparison to the previous year.

Our priority for 2008 is to continue developing our competitive advantages through enhancing our construction capabilities and strengthening our position in premium real estate development market segments. We are sure, that along with strong execution discipline and a focus on enhancing operational efficiency, our continued efforts towards building a strong portfolio of attractive projects in premium segments will allow us to capitalize on new opportunities for sustainable long-term growth."

Real Estate Development:

Sistema-Hals' consolidated revenue from Real Estate Development division grew by 72.7 % year-on-year to USD 356.0 million during 2007. This growth was led by several factors including the sale of the Sadovnicheskaya 75 building in Moscow; the sale of the "Kamenniy Ostrov" and the share of "Kostyansky 13" projects; higher prices and sales of land plots under the Avrora project in the Moscow region; continuing sales of units in the ongoing "Dnepropetrovskaya", "Nahimovskiy", "Michurinskiy" and "Rublevskoe highway" residential projects; and the sales of units in the Yartsevskaya 27v residential building in Moscow which was completed at the end of the year.

Two strategic deals - the sale of the Company's 50% share in the Sochi based project "Kamelia" to Saraya and the sale of the Company's 50% share in the St. Petersburg based project "Leto" to Apsys in December 2007 - also contributed to the revenue growth.

Project and Construction Management:

Project Construction Management revenues for the full year of 2007 amounted to USD 28.6 million compared to USD 39.9 million in 2006.

Asset Management:

In 2007 Asset Management revenues increased by 67.2% year-on-year to USD 44.8 million, primarily due to an increase in house sales and rental revenues from single family houses. The Serebryany Bor settlement remained the most significant source of rental revenues for the full year of 2007.

Facility Management:

The Facility Management division reported year-on-year revenue growth of 127.5% to USD 22.8 million for the full year of 2007. The growth was primarily due to an increase in revenues from services provided to subsidiaries of JSFC Sistema.

Operating expenses

Total operating expenses for the full year of 2007 amounted to USD 400.2 million, compared to USD 200.0 million last year:

• Cost of sales was USD 218.7 million (USD 151.5 million last year),
• Selling, general and administrative expenses (SG&A) were USD 166.6 million (USD 41.3 million last year),
• Depreciation and amortization charges increased to USD 14.9 million (USD 7.1 million the previous year).

The increase in SG&A was largely due to stock-based compensation in the amount of USD 99.8 million, which is represented by the one-off non-cash expense on the stock bonus plan for the Company's management and members of the Board of Directors in the amount of USD 98.0 million and stock option expense for the Company's management in the amount of USD 1.8 million. The remaining increase in SG&A is mainly due to the increased number of personnel in line with an increase in the number of new development projects and projects in the early stages of implementation.

OIBDA

In 2007 consolidated OIBDA amounted to USD 66.9 million, representing an OIBDA margin of 14.8% compared to the respective USD 90.1 million and 31.9% for the previous period.

OIBDA excluding the non-recurring expense on the stock compensation bonus plan increased by 85.0% to USD 166.7 million compared to the previous year. In 2007 the OIBDA margin excluding the non-recurring expense on the stock compensation bonus plan was 36.9%.

Income Tax

Income tax payments totaled USD 16.2 million during the year compared to USD 16.3 million a year earlier.

Net Income

The Company's consolidated net income for the full year of 2007 amounted to USD 34.7 million[OL1]  compared to USD 55.6 million a year earlier.

Siemens project

In 2005, the Group entered into a fixed price contract with Siemens to develop an office building in Moscow. The Group also signed a fixed-price agreement with a subcontractor to physically construct the building.

During 2006 and 2007 there was significant growth in the prices of materials, labor and other construction costs. As a result of this, the Group is unable to complete the project within the original budget cost estimates. The Group has initiated negotiations with Siemens to revise the contract price to recover the increased costs. At the same time, the Group is negotiating the fixed price construction agreement so that all or part of the overruns be absorbed by the subcontractor. In case the Group is unable to reach consensus with Siemens and/or the subcontractor on these matters, the Group will consider various remedial options, including actions that may lead to termination of the contract. In case the contract is terminated the Group is likely to retain the rights for the constructed building and become liable for repayment of EURO 64 million of advances received previously under the contract, while possible compensation, claims and damages to Siemens will need to be assessed. At this stage the Group is unable to estimate the amount of such compensation, claims and damages.

Due to the uncertainties referred to above, as of the reporting date, the Group is not able to reasonably determine or estimate the likely outcome of the project. No losses in relation to this project are provided for as at December 31, 2007.

Subsequent events

As at January 1, 2008, the Company has changed its functional currency from US Dollars to Russian Rubles in accordance with SFAS No. 52 "Foreign Currency Translation (as amended)". The change will be reported prospectively and the financial statements of the previous periods will not be restated. The Group is currently assessing the impact of the functional currency change.

In February 2008 Sistema-Hals announced the appointment of Sergey Shmakov as First Vice President for Property Development. Sergey Shmakov has many years of experience in the area of property development and an expert knowledge of property market processes.

Also in February 2008 Sistema-Hals announced the appointment of Andrey Solovyev as the Company's Financial Director. Andrey Solovyev has also been appointed acting Vice President of Finance and Investment. Mr. Solovyev's experience in finance planning, budgeting and investment analysis will help to strengthen the finance team and will increase the Company's ability to effectively and efficiently complete the Company's projects.

In February and in April 2008, the Company obtained two tranches in the amount of USD 35.0 million and USD 41.5 million respectively under a loan facility from Alfa Bank. The maximum amount of the loan facility is USD 88.8 million. The loan facility was obtained for the Company's general operational needs.

In April 2008 the Company sold its project "22 Rochdelskaya" in Moscow. The deal was part of the Company's ongoing asset management strategy. The proceeds received from the sale of the "22 Rochdelskaya" project will be invested into current core projects.

Also in April 2008 Sistema-Hals and the Detsky Mir group announced the decision to close the Detsky Mir building on Lubyanka Square (5/1 Teatralny Proyezd) for reconstruction and restoration with effect from 1 July 2008. The sophisticated plans for the reconstruction project and the use of modern building technology and design will enable the store to retain its image as one of the capital's outstanding landmarks and at the same time update the interior to make it more convenient for shoppers. The total area of the building after reconstruction is expected to increase from 57,500 square meters to 74,000 square meters, and the shop floor area will nearly double from its current 19,000 square meters. The building's external appearance, existing dimensions, height, plot size and silhouette will remain unchanged.

Conference call

Sistema-Hals will host a conference call today (28 April) at 5.00 PM Moscow local time, 14.00 PM London local time and 9.00 AM New York local time to present and discuss these results. Participants may dial into the call on the following numbers:

Participant Telephone Number:  +44 845 634 0041

PIN: 7981648

Appendices:

• 1. Unaudited consolidated balance sheets as of December 31, 2006 and December 31, 2007 according to US GAAP
• 2. Unaudited consolidated profit and loss statements for the full year of 2007 and the full year of 2006 according to US GAAP
• 3. Non-GAAP financial measures