OREANDA-NEWS. April 27, 2010. JSC SITRONICS (‘SITRONICS’ or ‘the Group’) (LSE: SITR), the leading provider of technology solutions in Russia and the CIS, today announced its consolidated US GAAP financial results for the fourth quarter and financial results for the full year ended December 31, 2009.

FOURTH QUARTER HIGHLIGHTS

·          Consolidated revenues of USD398.8 million

·          Telecommunication Solutions revenues of USD208.3 million; Information Technologies revenues of USD120.9 million; and Microelectronics revenues of USD64.8 million

·          Adjusted OIBDA* profit of USD54.0 million and adjusted OIBDA margin of 13.5%

·          USD73.0 million of one-off costs arising from provisions for accounts receivable and impairment of inventories, fixed assets and investments

·          Total OIBDA loss of USD19.0 million

·          Net loss attributable to SITRONICS of USD37.3 million

·          USD389 million of contracts secured since the announcement of third quarter financial results on December 3, 2009 to date, and USD979 million of contracts secured since the beginning of 2009 to date.

FULL YEAR HIGHLIGHTS

·          Consolidated revenues of USD1,024.2 million

·          Telecommunication Solutions revenues of USD579.0 million; Information Technologies revenues of USD221.5 million; and Microelectronics revenues of USD208.1 million

·          Adjusted OIBDA profit of USD101.1 million and adjusted OIBDA margin of 9.9%

·          USD94.4 million of one-off costs arising from provisions for accounts receivable and impairment of inventories, fixed assets and investments

·          Total OIBDA profit of USD6.7 million

·          Net loss attributable to SITRONICS of USD119.1 million including a USD26.2 million net loss from discontinued operations

· Here and below OIBDA is defined as operating income before depreciation and amortization. Please see Attachment A to this statement for further information. Adjusted OIBDA is defined as operating income before depreciation and amortization net of impairment losses and reserves

·          Total assets of USD1.9 billion

·          USD147.2 million of operating cash flow

·          49.1% year on year reduction in cash outflows on capital expenditure to USD91.7 million and USD55.5 million of free cash flow †

Sergey Aslanian, President of SITRONICS, commented: “We continued to outperform the market in 2009 and firmly established the Group as one of the leading Russian and international technology companies. We have continued to work closely with both the Russian and other governmental organisations, and have also expanded our presence in key vertical sector markets and extended our geographical footprint.

“We have made provisions and written down assets, in order to fully reflect the deterioration in market conditions in 2009. When excluding these factors, our underlying OIBDA margin increased year on year to 10%, in line with our focus on higher margin businesses that are less capital intensive. We also generated free cash flow as a group following the optimisation of our cost base and the reduction in our capital expenditure budgets.

“We have renegotiated USD780 million of debt during the year and increased the proportion of long term debt to over 50% with an overall weighted average borrowing cost of less than 9%. Furthermore, we anticipate that a debt for equity swap will be executed this year with our majority shareholder, Sistema, in order to reduce our borrowing levels.

“Moving forward, we have a pipeline of USD979 million of contracts secured since the beginning of 2009, of which approximately USD546 is expected to be booked in 2010. We do therefore expect to continue to outperform the market and deliver low double digit revenue growth in 2010 with a stable OIBDA margin when compared with the full year adjusted margin in 2009.”