OREANDA-NEWS. April 17, 2012. Sistema Mass Media (herinafter "SMM"), one of the largest media holdings in Russia, announces its unaudited consolidated financial results in accordance with the US GAAP principles for the period ended December 31, 2011. SMM owns and manages STREAM TV Company ("Stream TV"), Russian World Studios (“RWS”), Maxima Advertising Agency ("Maxima"), and DTV.

KEY FINANCIAL INDICATORS
Revenue increased 7.3% year-on-year to USD 100.9 million.
OIBDA without one-offs in 2011 decreased by 52.6% to USD 19.3 million compared to USD 40.8 million in the same period last year. OIBDA margin was 19.2%.
In 2011, net loss without one-offs increased compared to prior year to USD 35.3 million.
Debt burden decreased 13.1% to USD 83.1 million year-on-year.
 
KEY OPERATIONAL RESULTS
The Stream TV subscriber base expanded 15.8% to 6.2 million compared to 2010.
In Stream TV, the share of advertising revenue grew by 2.6 pp to 12.6% in 2011.
The RWS library grew 21.6% to 1,471 hours.
RWS produced 261 hours and sold 295 hours of in-house content in 2011.
 
FINANCIAL AND OPERATIONAL SNAPSHOT
 
Key financial and operational performance of the Company underpinned  by the TV and advertising businesses of SMM, which successfully delivered revenue growth of 21.3% and 128.8%, respectively.
 
In the reporting period, Stream TV’s operational and financial results delivered 15.8% increase in subscriber base to 6.2 million. Stream’s revenue grew by 21.3% to USD 19.8 million resulting in 9.3% increase in OIBDA to USD 6.2 million.
 
Changes in TV scheduling during the pre-election period resulted in reduction of volume of sales for RWS, and larger OIBDA loss at the front level. However, the Company expects to see a recovery in demand in 2012.
 
Following a restructuring in 2011, SMM’s advertising business delivered sustainable growth and demonstrated significant performance improvement. Revenue grew by 128.8%, which allowed the company to reach OIBDA and net profit break-even.
 
Following the US GAAP principles, the Company recognized one-off non-cash item for the content library impairment of USD 50.79 million in 2011 due to the revision of the secondary sales forecast.
 
Commenting on the Company performance 2011, Peter Gerwe, President and Chief Executive Officer of Sistema Mass Media, said:
 
“We are pleased to report strong operational results across our key lines of business. Stream continued to add on new subscribers, RWS increased its library content while Maxima has benefited from a significant restructuring effort carried out in 2011 and delivered increase in both client base and revenues. Equally, our financial results have demonstrated solid dynamics despite a substantial one-off impairment of our library content in accordance with US GAAP accounting principles and temporary market trends in the second half of 2011.
 
I was appointed as the CEO of SMM at the end of 2011, with a clear aim of turning it into a leading media holding. Russia's media sector continues to demonstrate exceptional growth rates with both advertising and internet rapidly expanding. Our strategy will be to take advantage of this digitalization and position SMM as the best content provider. With our restructuring now largely complete, we are fully focused on scaling up our content and distribution platforms, improving transparency and corporate governance and establishing a mutually beneficial partnership with MTS as one of the leading brands in Russia and CIS.”