Press Releases / 10.12.2013

Press Release as of 10.12.2013

Sistema JSFC

CJSC AK&M Rating Agency monitored the national scale credit rating of Sistema Joint Stock Financial Corporation (license no. 646) and upgraded it to 'A++', with a stable outlook. Earlier, the Company was rated 'A+', with a positive outlook.

The 'A++' rating indicates that Sistema JSFC qualifies as a highly reliable borrower, with the lowest risk of a delay in meeting liabilities imaginable.

The positive rating action was motivated by JSFC Sistema's sustainable, positive development and impressively growing profitability.

According to the Company's US GAAP report for the 12-month period ending on the last reporting date, equity capital of JSFC Sistema increased by 7%, assets by almost 2%, sales revenue by 5%, while its net profit soared more than 5 times.

As of the last reporting date, the Company's return on sales (ROS, Operating profit Margin) increased to 12.5%, Net profit Margin reached 5.2%, EBITDA margin grew to 25.2%, OIBDA margin to 26.5%.

For the 12-month period ending on the last reporting date, the Company reduced its consolidated loan debt by almost 5% and eased its total debt burden, the loan debt to EBITDA ratio decreasing to 1.8.

JSFC Sistema's current financial performance is indicating its significantly stronger credit profile.

Established 1993, Sistema JSFC is the largest public diversified financial corporation in Russia and the CIS with large assets in various sectors of economy. Companies controlled by Sistema JSFC are operating in Russia, other CIS countries, East and West Europe providing services related to telecoms, hi-tech, fuel & energy, petrochemistry, radio and space technologies, banking, retail trade, mass media, travelling and healthcare to more than 100 million consumers. In recent years, Sistema JSFC has evolved from being an operational holding company to employing an investment fund model. According to Sistema JSFC's consolidated US GAAP report, the Company's assets at the end of H1 2013 amounted to USD 44.4 billion, equity capital totaled USD 13.1 billion.

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Full name: Sistema Joint Stock Financial Corporation.

Short name: Sistema JSFC.

This press release is based on the statement of assigning a credit quality rating to Sistema JSFC.

The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Company's credit standing and shall not be considered as advice on the purchase and sale of securities or the provision of loan facilities.

CJSC AK&M Rating Agency will not incur any responsibility for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

CJSC AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010).

AK&M Ratings are recognized by the Central Bank of Russia (for providing unsecured lending facilities – Regulation 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide cash and settlement services to project and engineering companies implementing investment projects), and the MICEX (for the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation and bond listing purposes). By a resolution of Russia's Government AK&M Ratings count for the recapitalization of banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.

CJSC Analysis, Consulting and Marketing Rating Agency
ul. Gubkina 3
Moscow, Russia
Press release by: A.G. Chumachenko
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18