Moscow, Russia- June 21, 2013 - Sistema JSFC ("Sistema" or the "Company", together with its subsidiaries, "the Group") (LSE: SSA), the largest publicly-traded diversified holding company in Russia and the CIS, today announces its unaudited consolidated US GAAP financial results for the first quarter ended March 31, 2013.
FIRST QUARTER HIGHLIGHTS
- Consolidated revenues up 5.5% YoY to US$ 8.3 billion
- OIBDA slightly down 0.8% YoY to US$ 2.0 billion, with an OIBDA margin of 24.0%
- Net income attributable to the Group of US$ 371.8 million
- Net debt at the Corporate Holding level amounted to US$ 1.5 billion as of March 31, 2013, compared to net cash of US$ 339.7 million as of March 31, 2012.
KEY CORPORATE HIGHLIGHTS IN 1Q 2013 AND POST PERIOD
- Sale of 25% and 24% in RussNeft to Bradinor Holdings Limited and Cromeld Management Limited, respectively, for a total cash consideration of US$ 1.2 billion. Transaction expected to be complete in the third quarter of 2013.
- MTS acquired a 25.095% stake in MTS Bank OJSC for RUB 5.09 billion through an additional share issuance by the bank.
- The Board of Directors of SG-trans approved the company's reorganisation, intended to separate SG-trans' trading assets into a standalone business. Later, in April, Sistema sold 70% of its shares in SG-trans to Financial Alliance for RUB 12.0 billion. The price of the deal is based on the valuation of SG-trans, excluding SG-trading.
- SSTL ended operations in 13 out of 22 circles and participated in a new licencing auction obtaining 8 technologically neutral licences in the 800 Mhz band, with 3 carriers of 1.25 Mhz in each circle. SSTL's total footprint now consists of 9 licences, including the previously unaffected Rajasthan licence.
- Sistema successfully launched secondary placement of Series 03 Bonds raising RUB 10 billion.
Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented:
"Substantial progress was made during the first quarter across our investment portfolio. A key milestone was the resolution of SSTL's licensing issues by repositioning the company into a more focused data operator with a better spectrum, lower capital requirements and a clearer path to breakeven. During the reporting period and in recent weeks, we have delivered substantial return on capital from our transportation investments. We began consolidating all our rail investments, through which we expect to recoup more than 80% of our initial SG-trans acquisition costs. However, a key event for us at the moment, post reporting period, is the announced divestment of our stake in RussNeft. The sale will generate US$ 1.2 billion in proceeds, and will deliver a significant return on our original acquisition.
These operational successes, which are highly accretive and demonstrate our ability to execute on our strategy, are matched by a solid financial performance. At the Group holding level, we are reporting year-on-year growth in revenues and stable OIBDA despite certain seasonal trends. Moreover, with a step change increase in recommended dividends, as announced by the Board in April, and an advancing deal pipeline, we are confident of generating substantial value for our shareholders in 2013."