OREANDA-NEWS. December 22, 2011. Sistema JSFC (“Sistema”, the “Group” or the “Company”) (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, today announces its unaudited consolidated US GAAP financial results for the third quarter ended September 30, 2011.

THIRD QUARTER HIGHLIGHTS

Revenues up 23.4% YoY to USD  9.0 billion

OIBDA up 16.8% YoY to USD  2.2 billion, with an OIBDA margin of 24.4%

Operating income up 21.2% YoY to USD  1.4 billion, with an operating margin of 15.2%

Net income attributable to Sistema increased by 74.9% YoY to USD  319.5 million from USD  182.7 million in the third quarter of 2010.

Net debt at the Corporate Holding level reduced by 77.6% YoY to USD  433.2 million as of September 30, 2011 from USD  1,937.0 million as of September 30, 2010.

KEY CORPORATE HIGHLIGHTS FOR THE THIRD QUARTER

Completed the sale of 63% stake in OJSC SITRONICS to OJSC RTI.

Intourist and Thomas Cook Group Plc completed a transaction to establish a joint venture involving Intourist’s tour operating and retail business. Sistema’s share proceeds from the transaction are hedged against the recent volatility in Thomas Cook’s share price.

Executed buyback of 17,813,600 ordinary shares of Sistema JSFC, through Sistema Finance OJSC, a 100% owned subsidiary of Sistema.

Appointed Rafael Nagapetiants as Senior Vice-President, Head of Developing Assets business unit.

Approved changes to the composition of the Board’s Committees and changes made to their provisions.

Received an indicative offer from MTS to purchase a 100% stake in Sistema-Inventure CJSC, a wholly-owned subsidiary of Sistema, for RUB 10.56 billion. Transaction completed post period end.

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

“Sistema has delivered a strong set of quarterly results reflecting solid performance from our Core assets and improving operating and financial results of Developing investments.

MTS’ focus on stimulating usage and customer retention boosted profitability, delivering a turnaround of OIBDA margins. At Bashneft, production increased by 2.7% QoQ and is on track for around 5% growth in 2011.

In the Developing assets portfolio, our consumer orientated businesses continue to perform strongly, with Detsky Mir reporting double digit revenue and like-for-like sales growth; Medsi and SMM achieving 154% and 165% YoY OIBDA growth respectively and MBRD commencing full scale mobile banking and credit operations following exceptional demand for its PoS-credits and MTS Money products. The Developing Assets portfolio overall has shown positive OIBDA also, as Intourist completed their transaction with Thomas Cook and the newly enlarged RTI delivered strong growth in contracts in the telecom and defense solutions business units.

Over the course of the last three years Sistema has taken active steps to diversify its portfolio and today’s results reflect the significant transformation that has since taken place. With a balanced revenue stream, higher dividend inflows, prudent debt management and substantial cash reserves Sistema is in one of the strongest financial positions compared to its Russian peers. This has allowed us to steadily execute our strategy of diversification by securing partnership in the petrochemical sector; establishing a foothold in agriculture and identifying a number of potential future opportunities which we are confident will create significant shareholder value in the near and medium term.”

Conference call information

Sistema’s management will host an analyst conference call today at 9 am (New York time) / 2 pm (London time) / 3 pm (CET) / 6 pm (Moscow Time) to present and discuss the third quarter results.

The dial-in numbers for the conference call are:

UK/International:       +44 20 7190 1530

US:                         +1 480 629 9692

And quote the conference call title: “Sistema 3Q 2011 Financial Results”.

A replay of the conference call will be available on the Company’s website www.sistema.com for 7 days after the event.