OREANDA-NEWS.  September 10, 2012. Sistema Mass Media (hereinafter "SMM" or "the Company"), one of the largest media holdings in Russia, announces its unaudited consolidated financial results in accordance with the US GAAP principles for the first 6 months of 2012 ended June 30, 2012. SMM owns and manages STREAM TV Company ("Stream TV"), Russian World Studios ("RWS"), Maxima Advertising Agency ("Maxima"), and DTV. Besides, SMM jointly with VGTRK is founder of joint venture JSC "Lenfilm XXI", reported the press-centre of Sistema.

KEY FINANCIAL HIGHLIGHTS

- Revenue increased by 16.8% compared to H1 2011 to USD 56.6 million.

- OIBDA was up by 62.4% compared to H1 2011 to USD 24.5 million with OIBDA margin of 43.4%.

- Net loss reduced 10 times compared to H1 2011 to USD 0.4 million.

- The debt  decreased 5.6% versus H1 2011 to USD 84.7 million.

FINANCIAL AND OPERATIONAL SNAPSHOT

- RWS demonstrated sustainably improving financial performance year-on-year driven by growing sales of TV series. RWS' revenue went up by 33.0%, OIBDA - by 28.2%.

- Content library grew by 15.2% to 1,511 hours compared to H1 2011. RWS produced 64 hours and sold 81 hours of in-house content in H1 2012.

- In the reporting period, Stream TV expanded its subscriber base by 21.8% to 6.8 million. Active sales approach and improved efficiency supported OIBDA growth by 33.3% to USD 5.7 million and net profit by 68.3% to USD 3.0 million.

- SMM's advertising business demonstrated reduced OIBDA loss to USD 0.3 million.

Commenting on the Company performance in H1 2012, Peter Gerwe, the President (CEO) of Sistema Mass Media, said:

"When I joined Sistema Mass Media at the end of last year, a key priority was to deliver a turnaround in profitability of the group and build a strong platform for future growth.

In the first six months of 2012 much has been done to achieve that aim. We refined our strategy to focus on content generation and distribution platforms, restructured the group and streamlined our costs while building a stronger management team. In the reporting period SMM has demonstrated 16% revenue growth and 62% increase in OIBDA resulting in a tenfold reduction in net loss. Key factors that led to this were complete optimisation of the studio business that should return to profitability in 2013, and excellent operational growth at Stream TV.

In the first six months we have also focused on building our team.  We were fortunate to recruit Vladimir Kharumyan who I worked with as CTC Media's Chief Operating Officer to come over to SMM.  We have hired a great general counsel in Kirill Abaryshev from Skadden Arps who has really taken control of our legal department and we have hired some terrific people to run our strategy and development office and oversee all our daughter companies.  With this new team, we are now aggressively looking to build a solid profitable company by year end and focus on growth in 2013".