OREANDA-NEWS. June 15, 2011. JSFC Sistema (“Sistema” or the “Group”) (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, today announced its unaudited consolidated US GAAP financial results for the first quarter ended March 31, 2011.

FIRST QUARTER HIGHLIGHTS
Revenues up 25.8% YoY to USD 7.8 billion
OIBDA up 13.0% YoY to USD 1.9 billion, with an OIBDA margin of 23.7%
Operating income up 10.6% YoY to USD 1.0 billion, with an operating margin of 13.2%
Net income attributable to the Group without one-offs increased by 30.5% year-on-year from USD 78.4 million in the first quarter of 2010 to USD 102.3 million
Net debt at the Corporate Holding level reduced by 38.5% YoY to USD 1,182.8 million from USD 1,922.3 million
The Group’s core assets contributed USD 7.1 billion and USD 2.0 billion to the Group’s consolidated revenues and OIBDA, respectively.

KEY CORPORATE HIGHLIGHTS FOR THE FIRST QUARTER
Completed the purchase of non-convertible amortizing Series 02 and Series 03 bonds with annual coupon rates of 14.75% and 12.50% respectively for the total amount of RUB 19.5 billion
Successfully placed RUB 19.5 billion of non-convertible amortizing Series 04 five-year bonds with a coupon rate of 7.65% per annum for the ten semi-annual coupon payments
Established OJSC RTI, the company founded with the participation of the Bank of Moscow and approved the sale of Sistema’s stake of approximately 63% in SITRONICS to OJSC RTI for USD 0.9228 per GDR
SSTL increased its share capital by INR 28,894.5 million (approximately USD 647 million). The Russian Government, represented by the Federal Agency for State Property Management ("Rosimushchestvo"), acquired a 17.14% stake in SSTL for INR 26,988 million (approximately USD 600 million).
Appointment of Mikhail Shamolin, the former President and CEO of Mobile TeleSystems (MTS), as President of Sistema

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

"Sistema maintained its momentum in the first quarter of this year reporting double digit year-on-year consolidated revenue and OIBDA growth. In our core businesses, Bashneft continued to set the pace and has delivered an 11.5% increase in revenues quarter-on quarter and a 46% increase year-on-year, thanks to higher oil prices and growth in production. At MTS, strong subscriber and data traffic growth lifted revenues 12% year-on-year, with the OIBDA margin in Russia expanding in the first quarter. Encouraging performance is also reported at our developing assets Detsky Mir and Medsi, with the latter returning to profitability in Q1 compared to Q4, 2010.

The first quarter was also characterized by restructuring at the holding company level and the execution of several important deals such as Bashneft’s partnership with LUKOIL on Trebs & Titov, SSTL’s circa USD 600 million equity issuance and the creation of RTI.

Importantly, our solid financial position and our stable portfolio mean that Sistema is well placed to focus on new M&A opportunities and deliver our key objective of creating another core, industry leading business."

Conference call information

Sistema 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 first quarter results.

The dial-in numbers for the conference call are:

UK/International: + 44 20 8515 2302
US: + 1 480 629 9645

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.com or contact:

Investor Relations      Public Relations
Evgeniy Chuikov        Vsevolod Sementsov
Tel: +7 (495) 692 11 00             Tel: +7 (495) 730 1705
ir@sistema.ru      pr@sistema.ru