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06.12.2007 JSC SITRONICS SUMMARY THIRD QUARTER AND NINE MONTHS 2007 FINANCIAL RESULTSMOSCOW, Russia - December 6, 2007 - JSC SITRONICS ("SITRONICS" or "The Company") (LSE: SITR), a leading provider of telecommunications, information technology and microelectronic solutions in Russia and the CIS, with a growing presence in other EEMEA emerging markets, today announced its summary unaudited consolidated US GAAP financial results for the third quarter and nine months ended September 30, 2007.Summary Financial Results SITRONICS generated a 15% quarter on quarter increase in consolidated revenues to US$ 376.2 million in the third quarter, and year to date revenues of US$ 1,014.6 million. Total company assets increased by 11% year on year to US$ 1.78 billion at the end of the third quarter, compared to US$ 1.59 billion at the end of the same period of 2006. SITRONICS' OIBDA for the third quarter was impacted by US$ 21.3 million of non-cash costs arising from the Company's previously announced stock option programme. The first stock awards under this scheme were made in July 2007. The Company's adjusted OIBDA*, prior to this non-cash item, therefore amounted to a loss of US$ 47.6 million for the third quarter and a loss of US$ 86.2 million for the first nine months of 2007. This compares with OIBDA profits of US$ 44.5 million and US$ 114.7 million for the third quarter and first nine months of 2006, respectively. SITRONICS therefore reported net losses of US$ 108.0 million in the third quarter and US$ 187.8 million for the year to date, compared to net income of US$ 21.1 million and US$ 37.0 million for the same respective periods in 2006. Outlook As indicated at the time of the Company's half year results in September, year on year revenue growth and profitability levels are expected to improve further in the fourth quarter and into 2008. The Company now expects full year 2007 revenues of more than US$ 1.5 billion, with an OIBDA profit in the fourth quarter of 2007. SITRONICS has won more than US$ 150 million worth of new public and private sector tenders and contracts between July 1, 2007 and today. The majority of these contracts have been won by the Telecommunications Solutions division, which is expected to display positive dynamics in the fourth quarter and into 2008. The Microelectronic Solutions and Information Technology segments are also expected to meet Company expectations for the fourth quarter and deliver increased year on year operating profits. Operating Review SITRONICS' Information Technology Solutions and Microelectronics Solutions divisions performed in line with expectations in the third quarter and reported substantially higher revenues year on year. The Telecommunications Solutions business area reported a quarter on quarter increase in revenues but the year on year comparison reflected the fact that an anticipated large scale contract in the Middle East has not been awarded and that the launch of the 3G project has been hampered by unanticipated regulatory issues. The previously announced restructuring of the other business areas - Consumer Electronics and Electronic Manufacturing Services - is ongoing. The Information Technology Solutions and Microelectronic Solutions segments reported year on year increases in operating income for both the third quarter and first nine months of 2007. The Company's profitability levels for the first nine months of the year were adversely impacted by a loss for the Telecommunications Solutions segment, but the business did deliver a quarter on quarter reduction in operating losses. The Electronics Manufacturing Services and Consumer Electronics businesses each reported operating losses for the period as a result of on-going restructuring and reworking of the business models. However, the Electronics Manufacturing Services segment reported significantly reduced operating losses year on year. Significant contracts have recently been signed in the Telecommunication Solutions business; effectively strengthening this segment's pipeline. These contracts include: an NGN contract with leading Greek internet provider Hellas Online and a contract with ZAIN Bahrain to deploy a WiMAX network. The Telecommunication Solutions segment also launched the first stage of the OSS/BSS FORIS NG billing project with Vodafone in the Czech Republic and continued to increase its presence in Africa. In addition to being selected - along with Ericsson - to provide 3G equipment and services to MTS in Russia and the CIS, the Company also established a strategic partnership with Jordan Telecom Group to deliver IP-TV services over JTG's Orange-branded ADSL network. The Information Technology Solutions segment signed a contract to provide Consulting and Telecom Integration services to MGTS and also concluded a contract for IT services with the Russian Prosecutor General's office. In addition to working with the Russian government, the IT segment also signed contracts with the Turkmenistan Ministry of Education and Kazakhstan's largest pension fund. In addition, following an intensive investment in human capital and on-the-job training, SITRONICS' subsidiary - Kvazar-Micro - received Cisco's "Golden Partner" status (which is valid across all CIS countries). The Microelectronics Solutions segment also experienced a positive third quarter, extending its successful RFID ticketing technology project in the Moscow subway. The Company has now been contracted as the sole supplier for up to 25 million RFID tickets on a monthly basis beginning in 2008. SITRONICS Microelectronic Solutions also won a tender with Ukrtelecom during the third quarter to supply USIM-cards, and signed a framework agreement with Nokia Siemens Networks for the delivery of microchips. Comment from the President Sergey Aslanyan, SITRONICS' President and CEO, commented: "Our nine months results reflect the ongoing transition within the Company and a marked sequential improvement in the underlying performance of our core operating segments. We expect to see sustained improvement in the fourth quarter and into 2008, with our optimism backed up by a robust pipeline. We are currently assessing the Company's strategy and will announce the outcome of this comprehensive review in January. We have already identified several key actionable steps and have taken strides toward carrying them out." Other Information SITRONICS management will host a conference call today at 4:30 PM Moscow local time, 1:30 PM London local time and 8:30 AM New York local time to present and discuss the summary results. Participants may dial the following numbers in order to access the call: UK / International: +44 (0)20 7138 0816 US: +1 718 354 1171 A replay facility will also be made available for 7 days after the call and may be accessed by dialing the following numbers and using the following pin code: UK / International: +44 (0)20 7806 1970 US: +1 718 354 1112 PIN CODE: 4478198#
*** For further information, please visit http://www.sitronics.com/ or contact:
ABOUT SITRONICS SITRONICS is a leading provider of telecommunication solutions, including software, equipment and systems integration, IT solutions and microelectronic solutions in Russia and the Commonwealth of Independent States with a strong presence in Central and Eastern Europe and a growing presence in the Middle East and Africa. SITRONICS serves over 3,500 clients, maintains offices in 32 countries and exports its products and services to more than 60 countries. SITRONICS has over 10,000 employees. SITRONICS' key Telecommunication Solutions operations are based in Prague, Czech Republic and Athens, Greece and Moscow, Russia, while the company's IT Solutions and Microelectronic Solutions divisions are based in Kiev, Ukraine and Zelenograd, Russia, respectively. SITRONICS generated revenues of US$ 1,014.6 million for the nine months ended September 30, 2007 and had total assets of US$ 1.78 billion at the end of the period. SITRONICS is majority-owned by Sistema, which is the largest diversified holding company in Russia and CIS. SITRONICS has developed strategic alliances in its home markets with Cisco Systems, STMicroelectronics, Infineon and Giesecke & Devrient in relation to certain products and services. SITRONICS has vendor relationships with Siemens, Ericsson, Motorola, ORACLE, Intel, Sun Microsystems and Microsoft. Key customers include Sistema group companies, such as MTS, Comstar UTS and MTT, and also OTE, Cosmote, Vodafone, Ericsson and TCL. Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of SITRONICS. You can identify forward-looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. We do not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, and other factors specifically related to SITRONICS and its operations. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities of SITRONICS, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of SITRONICS. * Adjusted OIBDA is defined as OIBDA adjusted for options granted to management in the framework of the previously announced stock option program. Back to «Press Releases» |
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