SISTEMA PUBLICFINANCIAL CORPORATION 
By Unaudited financial results for the third quarter ended September 30, 2013
Moscow, Russia - November 25, 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 third quarter ended September 30, 2013.
THIRD QUARTER HIGHLIGHTS
- Consolidated revenues up 5.4% YoY to US$ 9.3 billion
- Adjusted OIBDA up 0.3% YoY to US$ 2.4 billion, with an adjusted OIBDA margin of 26.4%
- Consolidated net income attributable to the Group more than doubled YoY to US$ 1.3 billion. Adjusted net income attributable to the Group amounted to US$ 663.7 million
- Net debt at the Corporate Holding level amounted to US$ 785.1 million as of September 30, 2013
KEY CORPORATE HIGHLIGHTS FOR THE THIRD QUARTER
- Acquisition of a 100% stake in LLC Bashneft-Services Assets from Bashneft for a total cash consideration of RUB 4.1 billion.
- Acquisition of a 98% stake in OJSC United Petrochemical Company (UPC) from Bashneft for RUB 6.2 billion.
- A joint venture agreement signed by Sistema's UPC with the Mexican company Grupo Petrotemex, S.A. de C.V., a subsidiary of Alpek, S.A.B. de C.V. for the construction of an integrated purified terephthalic acid - polyethylene terephthalate plant in Ufa, Bashkortostan.
- Sale of a 49% stake in OJSC Oil and Gas Company RussNeft, for a total cash consideration of US$ 1.2 billion.
- Completion of another stage in the reorganisation of the Group's transportation assets under the SG-trans brand: Sistema sold a 15% stake in SG-trans to Unirail Holdings Limited for RUB 2.5 billion.
- Completion of the buy back of 25%+1 of Detsky mir-Centre's shares by Sistema's Detsky mir-Centre, through its wholly owned subsidiary, from Sberbank of Russia for RUB 4.5 billion.
Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented:
"Sistema reported strong set of results driven by excellent performance across the entire asset base and active portfolio management. We have substantially strengthened our cash position with proceeds from dividends and divestments rising to US$1.6 billion and lowered our consolidated debt to OIBDA to record 1.1 in the reporting period. This demonstrates our ability to maximise investment opportunities at our disposal and deliver substantial shareholder value.
In terms of progress at our investments, a key milestone for the quarter was the launch of production at the Trebs and Titov fields, which is now contributing to Group's performance. Furthermore, most of our developing companies were profitable on the OIBDA and Net Income level, with our retail and banking investments performing particularly well. The successful implementation of Detsky mir's development strategy and an increase in interest income at MTS Bank contributed to this achievement, while SSTL continued to reduce its OIBDA loss.
The Group has continued to actively pursue its M&A strategy and is entering attractive new growth sectors. As part of the natural expansion of our energy investments, we acquired United Petrochemical Company, and completed the purchase of Bashneft-Services Assets, an oil services company. Through our clear development plan, substantial restructuring expertise and possible future partnership opportunities, we believe we can transform our oil and gas investment into one of the leading oil services providers in Russia. Furthermore, UPC has already signed a JV agreement with Alpek a leading petrochemical company in Latin America and one of the largest global producers of PTA and PET which UPC is considering to produce.
Overall, our solid performance and growing portfolio prove our determination to source unique investment opportunities in Russia. We are also establishing a strong track record for monetising our investments to generate substantial returns for all shareholders."
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Conference call information
Sistema's management will host an analyst conference call today at 9 am (EST)/ 2 pm (London time) / 3 pm (CET) / 6 pm (Moscow Time) to present and discuss the third quarter results.
The dial-in numbers for the conference call are:
UK/ International: +44 20 8515 2313
US: +1 480 629 9818
And quote the conference call title: "Sistema Third Quarter 2013 Financial Results".
A replay of the conference call will be available on the Company's website www.sistema.com for 7 days after the event.
For further information, please visit www.sistema.comor contact:
Investor Relations Evgeniy Chuikov Tel: +7 (495) 692 11 00 ir@sistema.ru | Public Relations Ekaterina Tsukanova Tel.: +7 (495) 228 15 36 pr@sistema.ru |
Sistema is the largest publicly-traded diversified holding company in Russia and the CIS, which invests in and is a major shareholder of companies serving over 100 million customers in the sectors of telecommunications, high technology, oil and energy, radars and aerospace, banking, retail, mass-media, tourism and healthcare services. Founded in 1993, the Company reported revenues of US$ 9.3 billion for the third quarter of 2013, and total assets of US$ 44.4billion as at September 30, 2013. Sistema's global depository receipts are listed under the symbol "SSA" on the London Stock Exchange. Sistema's ordinary shares are listed under the symbol "AFKS" on the MICEX-RTS Stock Exchange. Sistema was ranked number 315 in the 2012 edition of the Fortune Global 500 list. Website: www.sistema.com
The Company is not an investment company, and is not and will not be registered as such, under the U.S. Investment Company Act of 1940.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. In addition, there is no assurance that the new contracts entered into by our subsidiaries referenced above will be completed on the terms contained therein or at all. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.
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