OREANDA-NEWS. September 27, 2011. Mostotrest (hereinafter – MSTT or jointly with its subsidiaries Engtransstroy (ETS) and Transstroymekhanisatsiya (TSM) – Mostotrest, the Company or the Group) publishes its 1H 2011 financial and operating results(a).

SUMMARY

Mostotrest, the leading Russian infrastructure construction Group, delivered strong operating and financial results, increased its revenues and net profit and won a series of large tenders in 1H 2011. A broad range of competences and high quality of execution enabled Mostotrest to increase its backlog. Following new market trends, the Group pursued implementation of its strategy aiming to develop operations in new business segments.

Operating Highlights

Backlog(b) increased by 5% to RUB 247.8 billion(c) from 2010 year-end, against a backdrop of the Group’s strengthening general contracting competence with increased number of projects where Mostotrest acts as a general contractor.

Awarded three out of five largest transport infrastructure development tenders held in Russia in 1H 2011, for the total amount of RUB 26.1 billion(c), including the integrated project for upgrade, maintenance and rehabilitation of the Voronezh bypass segment of M-4 “Don” Highway, with the contract value of RUB 16.3 billion(c), “Vnukovo” Airport upgrade project with the contract value of RUB 6.3 billion(c), and construction of the Ryazan North Bypass, with the contract value of a RUB 3.5 billion(c).

Financial Highlights

16% revenue growth to RUB 36.4 billion, driven by increased volumes of construction.

EBITDA(d) marginsteady at 2010 level (12%).

Profit for the period increased by 86% period-on-period to RUB 1.6 billion.

Net cash position as at the end of 1H 2011 (cash and cash equivalents less debt), was RUB 5.4 billion. The strong cash position further solidifies the Group’s financial standing and offers a wide range of opportunities for further development.

Continued to invest, capital expenditures increased 2 times.

CEO COMMENT:

"1H 2011 saw a slowdown of growth in the transport infrastructure construction market, with sluggish dynamics of tendering for new large-scale projects, revision of execution schedules for a number of existing major projects and postponement of large tenders previously scheduled for 1H 2011. Specifically, there was virtually no tendering of large transportation infrastructure construction projects in Moscow, due to the ongoing review of the city transportation sector development strategy. Consequently, during the period, we had to adjust to client requirements and flexibly respond to the situation. However, Mostotrest in 1H 2011 produced a resilient performance, achieving further growth and successfully broadening its business competencies to reflect the latest market trends. We further consolidated our leadership in our sector, emerging as the winner in three out of the five largest tenders held in Russia in 1H 2011. In addition, we became the first ever contractor to undertake the full-cycle project envisioning not only road construction but also maintenance and rehabilitation – a new area of expertise for Mostotrest. Anticipating development of the toll road sector in Russia, we entered the new segments of toll road operation and implementation of intelligent transportation systems (ITS) through a joint venture with the Kapsch Group of Austria, an international leader in the development and supply of electronic toll collection systems".