9 Dec 2010 16:22

Sistema posts Q3 GAAP earnings down 89% to %182.7 mln, above forecast

MOSCOW. Dec 9 (Interfax) - The Sistema holding closed Q3 2010 with net profit of $182.7 million to US GAAP, down 89.1% from $1.684 billion in the same period of last year, the company said in a statement.

This was still better than the $177.5 million that analysts predicted in a consensus forecast for Interfax.

Earnings for Q3 last year were so high because they reflected the gain on acquisition of the Bashkir Oil and Energy business. Earnings without that factor would have been $178 million in Q3 2009. OIBDA would have been $1.5 billion and the OIBDA margin would have been 27.4%.

In its Q3 report, Sistema announced a different figure for last year - a loss of $231.4 million. It said this was because profits on the acquisition of BashTEK companies of $2.783 billion were initially given for both Q3 and Q4 2009, but then reassigned to Q3. Not counting this one-time factor, Sistema OIBDA for Q3 last year was $1.46 billion with a 27.4% margin, and net profits were $178 million.

Sistema said sales revenue in Q3 2010 rose 36.9% year-on-year to $7.3 billion. Operating income before depreciation and amortization (OIBDA) grew 28.3% to $1.9 billion in Q3 2010 and the OIBDA margin fell to 26% from 27.6%.

The analysts forecast revenue of $7.24 billion, OIBDA - $1.87 billion and a margin of 25.8%.

The non-telecommunications business accounted for 59.5% of consolidated revenue, up from 59.1% in the Q2 2010 and 43.8% in Q3 2009.

The Telecommunications business includes Mobile TeleSystems (MTS) , its subsidiary Comstar-UTS, Indian operator Sistema Shyam TeleServices Ltd. (SSTL)and Sistema Mass Media (SMM).

SSTL saw its net loss widen to $78.2 million from $59.3 million. Negative OIBDA grew to $85.7 million from $71.4 million and the operating loss swelled to $105.2 million from $79.3 million.

SMM posted a net loss of $3.8 million compared with a net profit of $2.4 million a year earlier. Revenue increased 39.1% to $20.8 million. OIBDA declined 15.6% to positive $3.8 million, down from $4.5 million in Q3 2009.

Selling, general and administrative expenses increased 7.8% to $993.8 million in Q3 2010, mainly due to increases at MTS and Bashneft .

Capital expenditure fell to $572.2 million compared with $864.6 million a year earlier, but was up 23.3% compared with the previous quarter. Sistema spent $128.5 million on acquisitions in the reporting period, most of it for MTS' acquisition of 100% in the Multiregion group.

Net debt was $10.459 billion at the end of September, down from $11.633 billion at the end of Q2 2010. Cash balances amounted to $4.009 billion, up from $2.395 billion.

During July-September, Sistema paid back loans from Gazprombank, Raiffeisenbank, Sberbank of Russia , and Royal Bank of Scotland, to an overall tune of $280 million.