OREANDA-NEWS. June 7, 2011. JSC SITRONICS (LSE: SITR), the leading provider of technology solutions in Russia and the CIS, announced its unaudited consolidated US GAAP financial results for the three months ended March 31, 2011.

FIRST QUARTER HIGHLIGHTS

•           Consolidated revenues up 46% year on year to USD  277.6 million

•           Information Technologies revenues up 208% year on year to USD  103.2 million; Microelectronics revenues up 52% year on year to USD  67.9 million; Telecommunication Solutions revenues down 9% year on year to USD  98.1 million

•           OIBDA of USD  5.8 million and margin of 2.1%

•           Net loss attributable to SITRONICS down 49% year on year to USD  12.7 million

•           Total assets up 8.5% year on year to USD  2,013.3 million

•           USD  432.5 million of contracts secured since the announcement of the Group's fourth quarter financial results on April 21, 2011, and USD  1.43 billion of contracts secured since the beginning of 2010, with approximately USD  884.0 million of this pipeline expected to be booked in 2011

Sergey Aslanian, President of SITRONICS, commented: "Our high level of sales growth in the first quarter was driven by the performance of our Information Technologies and Microelectronics business segments, which completed a number of key projects and secured a number of new contracts. In addition, we booked a higher proportion of hardware equipment sales than usual for the period, as major customers shifted their anticipated purchasing to earlier in the year. All three of our business segments were OIBDA profitable in the quarter and we almost halved our Group net loss year on year. This continues the positive trend of the past year."

"We are on track with our strategy to consolidate and develop our market leading positions and customer relationships with public and private sector organizations in our core vertical and geographical markets. Our status as a preferred supplier of high technology solutions for public sector projects in Russia was reinforced by SITRONICS being entrusted with the important and large scale project to implement an Intelligent Transport System for the City of Moscow. This is a key step in the modernization of Moscow, which will improve the daily lives of millions of commuters and thousands of transport workers."

"We have a healthy forward revenue pipeline following the securing of further contracts since the announcement of our fourth quarter results at the end of April. We continue to expect to outperform industry growth levels in 2011, and raise our full year revenue guidance level to between 15% and 20%. We also continue to expect to maintain our full year 2010 OIBDA margin level in 2011, when excluding the impact of the 90 nanometer technology project, and to generate positive net cash flow from operations, which will be used to invest in the further operational and financial development of the Group."

FINANCIAL SUMMARY

(USD  millions)

Q1 2011

Q12010

Revenues

277.6

190.8

Total OIBDA

5.8

7.4

OIBDA margin (%)

2.1%

3.9%

Net loss attributable to SITRONICS

(12.7)

(25.0)

Total assets

2,013.3

1,855.1

OPERATING REVIEW Group Overview

The Group reported 46% year on year consolidated revenue growth in the first quarter, which primarily reflected the performance of the Information Technologies and Microelectronics business segments.

The Group has now secured USD  432.5 million of new contracts since the announcement of its fourth quarter financial results on April 21, 2011, and a total of USD  1.43 billion of new contracts since the beginning of 2010.

Despite the year on year increase in the Group's cost of sales, total operating expenses, when excluding depreciation and amortization charges, only increased by 2% year on year in the first quarter. Selling, general and administrative expenses were up 6% year on year but impairment losses and reserves were more than halved year on year.

The Group therefore reported an OIBDA profit of USD  5.8 million in the first quarter, compared to a profit of USD  7.4 million for the corresponding period of 2010.

Group depreciation and amortization charges declined by 21% year on year to USD  18.8 million, which primarily reflected the end of the useful life of certain intangible assets recognized during the acquisition of INTRACOM TELECOM.

Group net interest expenses declined year on year from USD  17.9 million to USD  15.6 million for the period, which reflected the reduction in the Group's weighted average cost of borrowing, as well as the capitalizing during the quarter of interest expenses on borrowings to finance SITRONICS Microelectronics' 90 nanometer project. The Group reported a foreign exchange gain of USD  10.0 million in the first quarter, compared to a gain of USD  10.7 million in the corresponding period of 2010, both of which reflected the difference in the value of the Group's US dollar denominated borrowings between the balance sheet dates.

The Group therefore reported a 49% year on year reduction in the net loss attributable to SITRONICS to USD  12.7 million for the first quarter of 2011.