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SSA - AFK Sistema PAO News Story

$5.31 0.2  3.7%

Last Trade - 4:35pm

Mid Cap
Market Cap £1.99bn
Enterprise Value £8.90bn
Revenue £6.06bn
Position in Universe 263rd / 1809

UPDATE 1-Sistema cuts India spending until break-even

Tue 9th April, 2013 4:36pm

* Annual investment to fall below $250 mln in 2014-2015

* Sees unit breaking even on OIBDA level by mid-2015 at latest

(Adds details, CEO comments)

MOSCOW, April 9 (Reuters) - Russian conglomerate Sistema

SSAq.L is holding back on major investment in its Indian mobile unit over the next three years to concentrate on making the operation profitable by mid-2015.

Sistema has reduced the scale of its Shyam TeleServices business which now has licences for nine zones compared with the 22 it ran before they were revoked by the Indian Supreme court last year. ID:nL3N0C31H3

Sistema will cut investment to less than $250 million a year in 2014 and 2015 from $415 million this year and $561 million in 2012, including interest costs, the company said in a presentation.

"We need to first...make it profitable, and once we do that we'll have a number of options in our hands," Sistema's Chief Executive Mikhail Shamolin said during a conference call on Tuesday.

"We would not want to do any significant investment in this business until we bring it to the break-even point," he added.

The company aims for the unit to break even on the OIBDA (operating income before depreciation and amortisation) level by the end of 2014 or first half of 2015, with six out of nine regions seen breaking even in the middle of 2014, it said.

Sistema Shyam said earlier on Tuesday it had recorded a full-year OIBDA loss of $271 million for 2012 on revenues of $303 million.

Its London-listed shares were trading 0.54 percent higher by 1442 GMT at $18.6.

(Reporting by Anastasia Teterevleva and Maria Kiselyova; Editing by David Cowell)

(( 495 775 1242)(Reuters Messaging:


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