Sistema Announces Financial Results for Three Months Ended March 31, 2007

Tuesday, July 10th, 2007

  • Consolidated revenues up 44% year on year to US$ 2.7 billion
  • OIBDA up 58% year on year to US$ 1.1 billion with increased margin of 40.5%
  • Operating income up 87% year on year to US$ 728.5 million with increased margin of 27%
  • Net income up more than five fold year on year to US$ 745.9 million
  • US$ 356.4 million raised through SITRONICS initial public offering in February 2007
  • Completion of sale of 49.2% stake in ROSNO insurance joint venture for US$ 750 million in February 2007

Moscow, Russia — Sistema (LSE: SSA), the largest private sector consumer services company in Russia and the CIS, today announced its unaudited consolidated US GAAP financial results for the three months ended March 31, 2007.

Media

The Media segment, which comprises the Group’s pay-TV, advertising, print and other media operations, generated 36% year on year revenue growth in the first quarter. Stream-TV, one of the largest providers of pay-TV services in Russia, which was acquired in February 2006, contributed US$ 19.2 million in revenues for the first quarter of 2007, compared to US$ 12.1 million in the first quarter of 2006.

The Stream-TV subscriber base grew by 4% quarter on quarter to 1.66 million subscribers by the end of the quarter, including 1.56 million pay-TV customers, 86,000 Internet and 9,700 telephony subscribers. The Maxima Group, an advertising agency, which operates in Russia, Ukraine, Kazakhstan and Belarus, contributed US$ 7.4 million to segment revenues, primarily due to the growth in its Ukrainian subsidiary and the increase in print advertising revenues.

The increase in segment operating income reflected the growth in the subscriber base and Stream-TV ARPU.