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all Financial Corporation "Sistema" press releases

Financial Corporation "Sistema"

April 16, 2013

Financial results for the fourth quarter and the full year ended December 31, 2012

Moscow, Russia- April 16, 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 consolidated US GAAP financial results for the fourth quarter and the full year ended December 31, 2012.


- Consolidated revenues up 3.9% to US$ 34.2 billion

- Adjusted OIBDA up 3.3% YoY to US$ 8.5 billion, with an adjusted OIBDA margin of 25.0%

- Adjusted net income attributable to the Group up 80% YoY to US$ 1.8 billion

- Net debt at the Corporate Holding level amounted to US$ 1.0 billion as at December 31, 2012, compared to net cash of US$ 580.5 million as at December 31, 2011, primarily due to the Company's investments in 2012.


- Revenues up 13% YoY to US$ 9.5 billion

- Adjusted OIBDA down 1.9% YoY to US$ 2.1 billion, with an adjusted OIBDA margin of 21.9%

- Adjusted net income attributable to the Group up 36.9% YoY to US$ 357.9 million


- Acquired 100% of SG-trans OJSC, the Russian market's largest independent operator of specialised railcars for transportation of liquefied petroleum gas, for a total cash consideration of RUB 22.77 billion.

- Acquired 50% of the authorised capital of Financial Alliance LLC, a professional railcar operator, from Bashneft for a total amount of RUB 3.41 billion.

- Completed the reorganisation of OJSC Bashkirenergo by splitting it into JSC Bashkirian Power Grid Company, which combines transmission and distribution grids, and OJSC Bashenergoactiv, which integrates power generation assets. The later was sold to INTER RAO UES for RUB 11.2 billion in cash and promissory notes.

- Completed a US$ 145 million share repurchase programme between June 6, 2012 and October 15, 2012.

- Acquired 3,751,844 Bashneft ordinary shares and 2,131,226 Bashneft preferred shares, which represents approximately 2.6% of the Bashneft's charter capital, for a total amount of approximately US$ 300 million.

- Fully paid annual dividends of RUB 0.28 per ordinary share for 2011, amounting to a total of RUB 2.7 billion.

- Established a joint venture with RZ Agro Ltd, an agricultural company controlled by certain members of the Louis-Dreyfus family. The joint venture consists of agricultural assets held by both parties totalling approximately 90,000 ha.

- Issued a US$ 500 million Eurobond with an annual interest rate of 6.95% and a maturity in May 2019.

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

"2012 was marked by several accomplishments and substantial progress was made on our new investment ideas. In the transportation segment, we established a leading presence in the sector only months after acting on our initial interest, whilst in our agriculture business, our partnership has delivered a promising set of maiden results. The period was also dominated by prolonged uncertainty in India. However, despite these difficulties, our perseverance paid off in the first quarter this year when we managed to secure superior licences for SSTL at no immediate cost, thereby strengthening its investment case.

In 2012, our businesses continued to expand as existing investments implemented their growth strategies, driving the Group's solid topline and adjusted OIBDA growth. Moreover, our net income increased 334% to US$ 947 million, reflecting stronger profitability in a number of our smaller investments. Most of these investments delivered positive OIBDA and four businesses have now reported positive net income.

To reflect the strength of our financial position, management intends to seek the Board's approval for a substantially higher dividend for 2012. We have a well-established track record for consistently increasing cashflow to the holding level and for executing on our strategy for each of our portfolios, leaving us well positioned to reward our shareholders and drive higher returns in 2013."

Conference call information

Sistema's management will host an analyst conference call today at 9 am (New York time) / 2 pm (London time) / 3 pm (CET) / 5 pm (Moscow Time) to present and discuss the fourth quarter and full year 2012 results.

The dial-in numbers for the conference call are:

UK/ International: + 44 20 8515 2301
US:                     +1 480 629 9819

And quote the conference call title: "Sistema Fourth Quarter and Full Year 2012 Financial Results".

A replay of the conference call will be available on the Company's website for 7 days after the event.




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