UK markets closed
  • NIKKEI 225

    26,422.05
    +248.07 (+0.95%)
     
  • HANG SENG

    17,165.87
    -85.01 (-0.49%)
     
  • CRUDE OIL

    81.66
    +0.43 (+0.53%)
     
  • GOLD FUTURES

    1,669.30
    +0.70 (+0.04%)
     
  • DOW

    29,225.61
    -458.13 (-1.54%)
     
  • BTC-GBP

    17,425.47
    -188.39 (-1.07%)
     
  • CMC Crypto 200

    444.40
    -1.58 (-0.35%)
     
  • ^IXIC

    10,737.51
    -314.13 (-2.84%)
     
  • ^FTAS

    3,745.11
    -75.12 (-1.97%)
     

Sistema PJSFC: Sistema announces financial results for the second quarter 2022

·26-min read

Sistema PJSFC (SSA)
Sistema PJSFC: Sistema announces financial results for the second quarter 2022
29-Aug-2022 / 10:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

Sistema announces financial results for the second quarter 2022

 

Moscow, Russia — 29 August 2022 — Sistema PJSFC (“Sistema”, the “Corporation”, or together with its subsidiaries and affiliates the “Group”) (LSE: SSA, MOEX: AFKS), a Russian publicly traded investment company, announces its unaudited consolidated financial results in accordance with International Financial Reporting Standards (IFRS) for the second quarter of 2022 (2Q 2022), ending 30 June 2022.

2Q 2022 FINANCIAL RESULTS

  • Consolidated revenue was RUB 213.8 billion.

  • Adjusted OIBDA was RUB 85.8 billion.

  • Adjusted OIBDA margin was 40.1%.

KEY HIGHLIGHTS IN 2Q 2022 AND AFTER THE REPORTING PERIOD

  • High level of dividend income. Sistema received final dividends for 2021 in the amount of RUB 24.9 billion from MTS and in the amount of RUB 6.2 billion from Segezha Group.

  • Creation of a portfolio fishery holding. In July 2022, Sistema purchased a 75% stake in Kristall Fish LLC and a 10% stake in Khangar LLC, which specialise in catching and processing redfish; Sistema also plans to establish a large fishery holding in Kamchatka.

  • Entry into the high-potential mineral water market. In June 2022, Sistema purchased the mineral water producer Arkhyz Original for around RUB 450 million, most of which was paid in the form of a debt-for-equity swap.

  • Increased stake in the real-estate business. In May 2022, Sistema increased its effective stake in Etalon Group to 48.8% with the acquisition of 72.9 million global depositary receipts for RUB 4.5 billion.

  • Continuation of foreign listing. In May 2022, Sistema received permission to continue the circulation of its depositary receipts outside Russia until 13 May 2023.

SISTEMA RESULTS REVIEW

 

(RUB mln)

2Q 2022

2Q 2021

1H 2022

1H 2021

Revenue

213,808

178,381

427,762

348,281

Adj. OIBDA

85,763

58,404

155,145

115,205

Operating income

48,197

25,712

79,610

50,995

Net loss attributable to Sistema

(2,076)

(3,883)

(20,610)

(6,282)

Adj. net loss attributable to Sistema

(10,752)

(3,387)

(21,334)

(5,786)

 

In 2Q 2022, Sistema’s consolidated revenue amounted to RUB 213.8 billion thanks to higher revenue at key assets: at Steppe, thanks to an increase in milk production and revenue growth from Sugar and Grocery Trading as well as Niche Crops Trading and new business lines; at Segezha Group, due to positive pricing trends for key products and also in connection with the consolidation of assets in Siberia; at Medsi, primarily thanks to the consolidation of the results of the clinics in the Promeditsina network in Ufa and the Dialine network in Volgograd, new clinic openings and increased patient flows. The consolidation in Sistema’s financial statements of Binnopharm Group’s results, from 25 June 2021, and of Etalon Group’s results, from 4 May 2022, also had an impact on the Corporation’s revenue trends.

The Group’s adjusted OIBDA amounted to RUB 85.8 billion in 2Q 2022 as a result of an increase in adjusted OIBDA at Steppe, thanks to effective sales of surpluses from last year’s harvest and improved efficiency of milk production alongside an increase in the size of the herd, as well as higher apple sales and the development of new business lines. The consolidation of Binnopharm Group’s results and Etalon Group’s[1] financial results as well as the effect of the derecognition of Ozon’s financial results attributable to Sistema in the Group’s consolidated financial statements had a considerable impact on the Corporation’s adjusted OIBDA trends. The adjusted net loss in 2Q 2022 was RUB 10.8 billon.

Group SG&A expenses rose to RUB 43.9 billion in 2Q 2022, mainly on the back of increased SG&A at MTS and Segezha Group, as well as the consolidation of Binnopharm Group’s and Etalon Group’s results. SG&A at MTS increased due to salary indexation as well as recognition of a subsidised loan as income in 2Q 2021. SG&A at Segezha Group rose mainly under pressure from logistics costs and salary indexation.

Group capex decreased to RUB 29.7 billion in 2Q 2022, mainly due to the postponement of a number of investment projects at portfolio companies amid heightened macroeconomic uncertainty.

OVERVIEW OF PORTFOLIO COMPANIES

MTS

 

LEADING PROVIDER OF DIGITAL AND MEDIA SERVICES AND RUSSIA’S LARGEST MOBILE OPERATOR

 

(RUB mln)[2]

2Q 2022

2Q 2021

1H 2022

1H 2021

Revenue

127,773

126,948

259,739

249,252

Adj. OIBDA

51,782

56,980

107,811

112,278

Adj. OIBDA margin

40.5%

44.9%

41.5%

45.0%

Operating income

22,290

30,251

48,567

58,791

Adj. net profit attributable to Sistema

5,526

8,674

7,668

16,841

 

In 2Q 2022, revenue increased by 0.7% year-on-year due to positive contributions from the telecom, fintech and media verticals. Decreased sales of handsets and accessories as a result of import restrictions slowed revenue growth in the second quarter.

Adjusted OIBDA decreased year-on-year to RUB 51.8 billion in 2Q 2022, partly as a result of an increase in non-cash expenses at MTS Bank for provisions amid the deteriorating macroeconomic environment, as well as an expanded loan portfolio.

Adjusted net profit in 2Q 2022 decreased to RUB 5.5 billion following OIBDA as well as in response to higher interest expenses on the back of a rise in the key rate and higher amortisation charges on account of an increase in capex in 2021. The negative impact of the above-mentioned factors was partially offset by the positive impact of exchange rate differences.

In 2Q 2022, capex decreased by 14.9% year-on-year to RUB 22.0 billion, which was the result of restrictions on supplies of telecom and IT equipment to Russia.

KEY HIGHLIGHTS IN 2Q 2022 AND AFTER THE REPORTING PERIOD

Ecosystem expansion. In July 2022, MTS acquired Bronevik, one of the leaders in the Russian online hotel booking market, to develop MTS Travel, a new business stream focused on travel and tourism. The same month, MTS acquired Webinar, the largest Russian developer of solutions for videoconferencing, webinars and online events.

Delisting of American depositary receipts. In connection with the adoption of Federal Law No. 114-FZ of 16 April 2022, as well as the decision of a government commission on the continuation of MTS’s American depositary receipts (ADR) programme until 12 July 2022, the procedure to delist the company’s ADRs from the New York Stock Exchange got under way. The process of converting ADRs into ordinary MTS shares is currently underway.

Dividend payout. At the AGM, on 22 June 2022, MTS shareholders decided to pay out dividends for 2021 in the amount of RUB 66.3 billion, or RUB 33.85 per ordinary share. Dividends were paid out in August 2022.

Bond placements. In August 2022, MTS successfully completed the book build for its RUB 20 billion series 001P-22 exchange-traded bonds with a coupon rate of 8.30% per annum, with maturity in 2024,  — the lowest rate among Russian corporate issuers in 2022 — and MTS Bank successfully completed the book build for its RUB 7 billion series 001P-02 exchange-traded bonds with a coupon rate of 9.55% per annum, with maturity in 2025, — the lowest rate among issuers with similar ratings.

SEGEZHA GROUP

LEADING RUSSIAN VERTICALLY INTEGRATED FORESTRY HOLDING

 

(RUB mln)[3]

2Q 2022

2Q 2021

1H 2022

1H 2021

Revenue

27,688

24,454

63,327

42,671

OIBDA

5,929

8,158

17,686

13,186

OIBDA margin

21.4%

33.4%

27.9%

30.9%

Operating income

2,229

6,399

10,640

9,786

Adj. net profit attributable to Sistema

3,844

4,191

6,130

6,552

Revenue increased by 13.2% year-on-year due to positive pricing trends for key products as well as in connection with the consolidation of assets in Siberia: the Novoeniseisk Wood-Chemical Complex and Inter Forest Rus. Revenue in 2Q 2022 faced pressure due to the considerable appreciation of the ruble against foreign currencies as well as a decrease in sales volumes in several business streams.

OIBDA in 2Q 2022 dropped by 27.3% as a result of the negative impact of the appreciation of the ruble, higher logistics costs, salary indexation as well as an increase in a number of costs for imported components.

Adjusted net profit dropped by 8.3% year-on-year to RUB 3.9 billion.

Capex in 2Q 2022 decreased by 47.7% year-on-year to RUB 2.4 billion in connection with a decrease in cash flow for investments in new projects amid heightened macroeconomic uncertainty.

Net debt as of the end of 2Q 2022 had risen by 230.9% year-on-year to RUB 94.6 billion due to the implementation of an investment programme over the last 12 months (RUB 20.9 billion), cash payments under M&A transactions (RUB 33.9 billion), as well as the payout of interim and final dividends for 2021.

Segezha Group’s paper production in 2Q 2022 decreased by 4.3% year-on-year to 93.2 thousand tonnes. Paper sales volumes declined in connection with an increase in the share of intragroup sales for converting by Segezha Group at foreign sites. Paper prices rose by 30.6% to EUR 821 per tonne on the back of a continuing upward price trend throughout the world as well as an increase in the share of domestic sales in Russia.

Production of paper sacks and bags in 2Q 2022 amounted to 389.4 million units, practically unchanged year-on-year. Sales volumes increased thanks to the development of the consumer packaging segment and the expansion of production capacity. Segezha Group sold 422.7 million paper sacks, up 5.5% from a year earlier. The price of paper sacks rose by 37.9% year-on-year to EUR 232 per thousand units, following an increase in the price of kraft paper.

In 2Q 2022, production of plywood decreased by 10.7% year-on-year to 42.9 thousand cubic metres. Plywood sales declined by 27.5% amid supply chain disruptions and logistical problems. The average selling price of birch plywood rose by 28.2% to EUR 735 per cubic metre.

Sawn timber production doubled year-on-year to 549.4 thousand cubic metres in 2Q 2022 thanks to the consolidation of assets in Siberia: the Novoeniseisk Wood-Chemical Complex and Inter Forest Rus. Sales volumes of sawn timber increased by 94.5% year-on year. Sawn timber prices decreased in connection with the normalisation of prices after they peaked in 2021. The average selling price was EUR 224 per thousand cubic metres.

KEY HIGHLIGHTS IN 2Q 2022 AND AFTER THE REPORTING PERIOD

Dividend payout. In June 2022, Segezha Group completed the payout of dividends for 2021 in the amount of RUB 10.04 billion, or RUB 0.64 per share.

Bond placement. In May 2022, Segezha Group issued exchange-traded bonds (series 002P-04R) in the amount of RUB 8.2 billion, with maturity in 2023 and a coupon rate of 11.0% per annum.

AGROHOLDING STEPPE

AGRICULTURAL HOLDING WITH ONE OF THE LARGEST LAND BANKS IN RUSSIA

 

(RUB mln)[4]

2Q 2022

2Q 2021

1H 2022

1H 2021

Revenue

15,291

4,845

29,395

11,596

Adj. OIBDA[5]

2,950

2,013

5,610

3,210

Adj. OIBDA margin

19.3%

41.6%

19.1%

27.7%

Operating income

2,030

1,334

3,497

2,226

Adj. net (loss)/profit attributable to Sistema

(197)

1,069

47

1,368

Steppe’s revenue in 2Q 2022 increased by 215.6% year-on-year to RUB 15.3 billion thanks to higher production in the Dairy segment as a result of the development of, and supply of livestock to, new dairy units; an increase in revenue in the Sugar and Grocery Trading segment; higher sales volumes in the Agrotrading and Niche Crops Trading segments; as well as the development of the production of packaged cheeses and the distribution of dairy products and plant-based alternatives.

Adjusted OIBDA rose by 46.5% year-on-year to RUB 2.9 billion in 2Q 2022 due to effective sales of surpluses from last year’s harvest and improved efficiency in milk production thanks to the expansion of the herd of high-yield dairy cattle. The increase in adjusted OIBDA was also driven by an increase in apple sales during the high season and the development of new business lines, such as the production of packaged cheeses and the export of niche crops.

In 2Q 2022, the adjusted net loss amounted to RUB 0.2 billion.

Steppe’s capex[6] in 2Q 2022 rose by 39.3% year-on-year to RUB 1.4 billion. Investments focused on dairy farming development projects, the acquisition of new agricultural machinery and purchases of land plots.

Net debt as of the end of the reporting period amounted to RUB 43.9 billion, 49.6% higher year-on-year, due to an increase in working capital in trading operations, the execution of an investment programme and early dates for the purchase of production equipment.

Steppe’s land bank stood at 578,000 hectares as of the end of the reporting period, making the company one of the six largest landowners in Russia. In 2022, Steppe’s farms collected a record wheat harvest of 1.1 million tonnes, 13% more than the previous year.

The Dairy segment demonstrated record growth: the gross yield in 2Q 2022 increased by 75.1% year-on-year to 36.1 thousand tonnes, and the dairy herd totalled 12,497 heat of cattle as of the end of the reporting period. Average daily productivity per cow in 2Q was 32.7 kg.

Sales volumes in the Agrotrading segment in the 2021/2022 season totalled 1,828 thousand tonnes, up 43% year-on-year. The high sales volume was driven by the execution of an effective sales strategy and the development of international agrotrading. In the 2021/2022 season, Steppe shipped 301 thousand tonnes of niche crops, making it one of the largest exporters of niche agricultural products.

Sales volumes in the Sugar and Grocery Trading segment in 1H 2022 totalled 156,000 tonnes, up 17% year-on-year. Sales of packaged products, including private labels, are one of the priorities for the segment. Sales of packaged products in the first six months of the year increased by 30%.

KEY HIGHLIGHTS IN 2Q 2022 AND AFTER THE REPORTING PERIOD

Product line expansion. In July 2022, Steppe launched a new business line: flour production. The company began producing premium and top-grade flours at its production sites in the Rostov region. The flour is made from Steppe’s own wheat; bran, a by-product of processing, is used to prepare feed mixtures for animals that are also sold.

Use of advanced technologies to improve efficiency. In July 2022, Steppe began using machine vision for conducting field assessments. Aerial photographs of fields are processed by a neural network. The system ranks the fields according to the number of seedlings and the presence of weeds, which enables farmers to track the results of field trials and to replicate best practices. Steppe plans to use 3D models for the autumn 2022 sowing season. The technology will be tested on an area of 400 hectares; if successful, it will be extended to cover the entire area under cultivation.

Steppe increased sales of cereal crops under its own private label: in the three months of spring 2022, the increase by volume was 95% year-on-year. The leading sellers among cereal crops were buckwheat, wheat, pot barley and pearl barley.

MEDSI

LEADING PRIVATE HEALTHCARE OPERATOR IN RUSSIA

 

(RUB mln)

2Q 2022

2Q 2021

1H 2022

1H 2021

Revenue

8,812

7,363

17,279

14,603

OIBDA

1,867

1,857

3,218

3,247

OIBDA margin

21.2%

25.2%

18.6%

22.2%

Operating income

843

1,080

1,477

1,710

Net profit attributable to Sistema[7]

568

1,081

908

1,577

Medsi’s revenue rose by 19.7% year-on-year to RUB 8.8 billion in 2Q 2022 thanks to new clinic openings and the consolidation of the results of the Promeditsina network in Ufa and the Dialine network in Volgograd, acquired in December 2021, as well as an overall increase in patient flows for the provision of planned outpatient and inpatient care.

OIBDA remained essentially flat year-on-year due to salary indexation as well as the gradual utilisation of new clinics. Participation in the Nebo residential development project contributed RUB 303 million to OIBDA in 2Q 2022, compared with RUB 741 million a year earlier.

Net profit in 2Q 2022 amounted to RUB 0.6 billion.

Capex increased by 24.0% year-on-year to RUB 2.4 billion in connection with an intensive development programme for Medsi’s outpatient component as well as investments in the establishment of a hospital offering a full range of inpatient care (with the exception of childbirth).

Net debt rose by 108.0%[8] year-on-year to RUB 10.9 billion on the back of higher capex and also thanks to a temporary increase in inventories to ensure the smooth operation of the network amid changes in supply chains in the new macroeconomic environment. Net debt /adj. OIBDA LTM remains at a comfortable level of 1.5x.

Clinic utilisation in 2Q 2022 declined by 1 p.p. year-on-year to 52%. The 17 p.p. decrease in hospital utilisation, to 80%, was associated with restrictions on the provision of chemotherapy treatments covered by mandatory health insurance.

The average ticket in 2Q 2022 decreased by 1.0% year-on-year to RUB 2,800.  The number of patient visits increased by 20.9% year-on-year to 3.1 million.

Floor space expanded by 34.5% year-on-year to 294.8 thousand square metres in 2Q 2022 in connection with the purchase of Labdiagnostics clinics in the Perm region and the opening of Medsi healthcare facilities in the Moscow region, Perm and Nizhnevartovsk.

Increase in the number of users of the SmartMed telemedicine app. In 2Q 2022, the number of active users of the SmartMed mobile app increased by 21.2% year-on-year to 299.9 thousand. The app was used to book 746.9 thousand appointments for admission to clinics (excluding appointments for instrumental and laboratory diagnostics), an increase of 28.8% year-on-year.

KEY HIGHLIGHTS IN 2Q 2022 AND AFTER THE REPORTING PERIOD

Network expansion. In April 2022, Medsi acquired 17 clinics from the Labdiagnostics network in Perm, with a total area of 2,593 square metres, bolstering Medsi’s presence in the market for private medical services in the Perm region by expanding its outpatient component.

Medsi opened five new healthcare facilities in 2Q 2022: in Moscow, the Moscow region, Perm and Nizhnevartovsk. In total since the start of 2022, Medsi has opened 10 new healthcare facilities with a total area of 7,384 thousand square metres.

Plans for further regional expansion. In July, Medsi and the government of the Nizhny Novgorod region announced plans to open a large medical facility in the region. The total amount of financial and material investment in the project is estimated at RUB 5.2 billion; the concession agreement is for 20-25 years.

Construction of a new multifunctional medical centre. In July, Medsi completed the construction of a multifunctional medical centre at the Otradnoe clinical hospital, with an area of more than 6,000 square metres. Designed to provide both inpatient care and rehabilitation treatment, the centre has more than 100 beds, including 10 in the intensive care unit.

BINNOPHARM GROUP

LEADING RUSSIAN PHARMACEUTICAL PRODUCER

 

(RUB mln)[9]

2Q 2022

2Q 2021[10]

1H 2022

1H 202110

Revenue

6,009

5,840

12,612

11,202

OIBDA

2,076

2,075

3,710

3,707

OIBDA margin

34.5%

35.5%

29.4%

33.1%

Operating income

1,414

1,221

2,179

2,541

Net profit

857

841

912

1,592

Revenue in 2Q 2022 rose by 2.9% year-on-year to RUB 6.0 billion as a result of a shift in export shipments in 1Q 2022 as well as the high base from last year in the hospital sales channel, including a selection of drugs for the treatment of COVID-19.

OIBDA remained virtually unchanged year-on-year, totalling RUB 2.1 billion in 2Q 2022. Increased selling costs for the promotion of new brands in the portfolio continued to put downward pressure on OIBDA trends.

Net profit rose by 1.9% year-on-year to RUB 0.9 billion in 2Q 2022 thanks to the positive impact of exchange rate differences.

Net debt[11] as of the end of 2Q 2022 had increased by 72.8% year-on-year to RUB 14.9 billion due to a temporary increase in stocks of raw materials as well as auxiliary and packaging materials to ensure uninterrupted production amid dramatic changes in supply chains. The increase in net debt was also the result of the acquisition of new drugs from Dr. Reddy’s. Net debt / OIBDA LTM in 2Q 2022 was at the target level of 1.8х.

KEY HIGHLIGHTS IN 2Q 2022 AND AFTER THE REPORTING PERIOD

Release of Russia’s first generic antibiotic for gastroenterology. In July 2022, Binnopharm Group launched Alfaxim, the first Russian made drug employing the active ingredient rifaximin for use in gastroenterology. The drug is produced at the company’s Alium production site, outside Moscow.

Entry into top 10 companies in the retail segment of Russia’s pharmaceutical market. In May 2022, Binnopharm Group ranked ninth, for the first time, in terms of retail sales volumes in the Russian pharmaceutical market, according to AlphaRM, a business intelligence company.

Successful bond placement. In July 2022, Binnopharm Group completed the book build for its series 001P-02 exchange-traded bonds in the amount of RUB 3 billion with maturity of 15 years and a put option after 2 years.  The quarterly coupon rate was set at 10.35% per annum.

CORPORATE CENTRE

 

(RUB mln)11

2Q 2022

2Q 2021

1H 2022

1H 2021

OIBDA

6,604

(11,859)

4,214

(16,859)

Net loss

(10,499)

(16,397)

(24,502)

(25,721)

Corporate Centre’s financial liabilities[12]

240,099

210,116

240,099

210,116

  The Corporate Centre comprises Sistema and companies that control and manage Sistema’s interests in its subsidiaries and associates.

In 2Q 2022, the Corporate Centre’s SG&A decreased by 80.0% year-on-year to RUB 1.1 billion in connection with a decrease in remuneration for transactions. OIBDA trends at the Corporate Centre level during the reporting period were driven largely by the effect of the derecognition of Ozon’s financial results attributable to Sistema in the Group’s consolidated financial statements, as well as the effect of the consolidation of Etalon Group’s results.

The Corporate Centre’s financial liabilities increased by 14.3% year-on-year in connection with the placement of RUB-denominated bonds and the securing of new lines of credit. As of 30 June 2022, RUB denominated liabilities accounted for 99% of the Corporate Centre’s financial liabilities. Bonds accounted for 73% of the Corporate Centre’s debt as of the end of 2Q 2022, down slightly from 74% at the end of 1Q 2022. The average weighted rate on the bond portfolio was 7.95%.

In May 2022, the agreement between Sistema and its financial partner on a non-deliverable swap regarding Etalon Group PLC global depositary receipts was terminated.

For further information, please visit www.sistema.ru or contact:

 

Investor Relations

Sergey Levitskiy

Tel.: +7 (495) 730 66 00

s.levitskiy@sistema.ru

Public Relations

Sergey Kopytov

Tel.: +7 (495) 730 17 05

kopytov@sistema.ru

Sistema PJSFC is a publicly traded diversified Russian holding company in the sectors of telecommunications, high technology, financial services, retail, e-commerce, paper and packaging, agriculture, real estate, tourism and medical services. The company was founded in 1993. Revenue in 2021 was RUB 802.4 billion; total assets equalled RUB 1.8 trillion as of 31 December 2021. Sistema’s global depositary receipts are listed under the “SSA” ticker on the London Stock Exchange. Sistema’s ordinary shares are listed under the “AFKS” ticker on the Moscow Exchange. Website: www.sistema.ru.

The Company is not an investment company, and is not and will not be registered as such, under the U.S. Investment Company Act of 1940.

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 Sistema. 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. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend 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 the deterioration of the geopolitical situation, as well as many other risks specifically related to Sistema and its operations.

 

Appendix A

Operating Income Before Depreciation and Amortisation (OIBDA) and OIBDA margin. OIBDA represents operating income before depreciation and amortisation. OIBDA margin is defined as OIBDA as a percentage of our net revenues. Our OIBDA may not be similar to the OIBDA measures of other companies; is not a measurement under accounting principles generally accepted under IFRS and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of profit and loss. We believe that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions of businesses and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under IFRS, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. OIBDA is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies.

Adjusted OIBDA, operating income and profit attributable to Sistema shareholders. The Company uses adjusted OIBDA, adjusted operating income and adjusted profit/(loss) attributable to Sistema shareholders to evaluate financial performance of the Group. These represent underlying financial measures adjusted for a number of one-off gains and losses. We believe that adjusted measures provide investors with additional useful information to measure our underlying financial performance, particularly from period to period, because these measures are exclusive of certain one-off gains and losses.

Adjusted operating income and adjusted OIBDA can be reconciled to our consolidated statements of
profit and loss as follows:

 

RUB millions

2Q 2022

2Q 2021

1H 2022

1H 2021

Operating income

48,197 

25,712 

79,610 

50,995 

Accruals related to LTI program at portfolio companies

534 

402 

534 

Impairment of non-current assets / (impairment recovery)

5 

489 

Adjusted operating income

48,202 

26,246 

80,501 

51,529 

Depreciation and amortisation

37,561 

32,158 

74,644 

63,675 

Adjusted OIBDA

85,763 

58,404 

155,145 

115,205 

 

 

 

 

 

Adjusted loss attributable to Sistema shareholders can be reconciled to our consolidated statements of profit and loss as follows:

 

RUB millions

2Q 2022

2Q 2021

1H 2022

1H 2021

Net profit attributable to Sistema

(2,076) 

(3,883) 

(20,611) 

(6,283) 

Accruals related to LTI program at portfolio companies

496 

367 

496 

Impairment of non-current assets / (impairment recovery)

(136) 

245 

Segezha Group’s financial expenses associated with the revaluation of interest rate swaps

(8,540) 

(1,334) 

Adjusted net profit attributable to Sistema

(10,752) 

(3,387) 

(21,334) 

(5,787) 

 

 

 

 

 

Consolidated net debt. We define consolidated net debt as consolidated total debt less cash, cash equivalents and deposits in banks. Consolidated total debt is defined as total borrowings plus finance lease. The total borrowings is defined as long-term and short-term borrowings. We believe that the presentation of consolidated net debt provides useful information to investors because we use this measure in our management of consolidated liquidity, financial flexibility, capital structure and leverage.

Consolidated net debt can be reconciled to the borrowings as follows:

 

RUB millions

30 June 2022

31 March 2022

Long-term borrowings

754,816

673,783

Short-term borrowings

287,836

273,356

Total borrowings

1,042,652

947,139

Consolidated finance lease1

19,5742 

21,7733 

Consolidated total debt

1,062,226

968,912

Cash and cash equivalents

(117,134) 

(85,776) 

Deposits in banks

(711) 

(894) 

Consolidated net debt

944,381

882,242

 

(1) In accordance with the standard IAS 17.

(2) Including RUB 1,619 million of short-term finance lease.

(3) Including RUB 1,915 million of short-term finance lease.

 

****

Full press please including financial statements is available on Sistema’s website http://www.sistema.com/investors-shareholders/financial-results/ and in the Attachment to the current release.

(1) Includes the economic effect of the consolidation of Etalon Group and YIT Russia.

(2) Financial results for 2021 and 1Q 2022 have been restated due to the deconsolidation of NVision a.s. (Czech Republic).

(3) Net profit is adjusted for other financial expenses associated with the revaluation of interest rate swaps.

(4) RZ Agro is reflected in Steppe’s IFRS accounts as an investment in a joint venture.

(5) Adjusted for accruals related to the LTI programme.

(6) Capex excluding investments in M&A.

(7) Including a loan of RUB 5.4 billion from LLC Project Michurinsky.

(8) Outpatient facilities in Moscow.

(9) Because Sistema has consolidated Binnopharm Group’s financial results since 25 June 2021, and also due to the absence of comparable IFRS data for the preceding periods, Binnopharm Group’s management accounting data is presented here. Net profit for Binnopharm Group has not been adjusted to reflect the amount attributable to non-controlling interests.

(10) The results have been adjusted based on Binnopharm Group’s revised management accounts for 1H 2021.

(11) Based on management accounts.

(12) The Corporate Centre’s financial liabilities are presented based on management accounts.

Attachment

File: Sistema 2Q 2022 Financial Results

ISIN:

US48122U2042

Category Code:

IR

TIDM:

SSA

LEI Code:

213800JSZ2UUK4QQK694

Sequence No.:

184254

EQS News ID:

1429527


 

End of Announcement

EQS News Service

show this
show this