Moscow, Russia- May 31, 2012 - Sistema JSFC ("Sistema", the "Group" or the "Company") (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, today announces its unaudited consolidated US GAAP financial results for the first quarter ended March 31, 2012.

FIRST QUARTER HIGHLIGHTS

- Consolidated revenues up 9.3% YoY to US$ 7.9 billion

- OIBDA up 17.2% YoY to US$ 2.0 billion, with an OIBDA margin of 25.5%

- Operating income up 28.6% YoY to US$ 1.2 billion, with an operating margin of 15.0%

- Net income attributable to the Group more than tripled YoY to US$ 380.9 million

- Net cash position at the Corporate Holding level amounted to US$ 334.8 million compared to net debt of US$ 1,182.8 million in the first quarter of 2011

KEY CORPORATE HIGHLIGHTS FOR THE FIRST QUARTER

- Increased Sistema's stake in OJSC Navigation Information Systems from 51% to 70% through an acquisition of an additional issue of NIS' shares. Sistema paid for the shares by contributing its 51% stake in M2M telematics LLC to the charter capital of NIS.

- Signed a framework agreement with RTI and NVision Group Managing Company LLC about a potential transaction between RTI and CJSC NVision Group, one of the largest information and communication technology companies in the Russian Federation. 
- RTI made a Voluntary Tender Offer to acquire up to 36.926% of JSC SITRONICS' common shares, representing all the shares that RTI does not already own, at a cash price of RUB 0.55 per common share of JSC SITRONICS.

Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented:

"In the first quarter of 2012, Sistema has delivered an impressive set of results demonstrating solid revenue growth and significant increases in OIBDA and net income. Our improved performance year-on-year was largely driven by the Core Assets portfolio, where higher quality of the subscriber base, increased data consumption and optimised costs contributed to a 10% OIBDA increase at MTS, while higher oil prices and a one-off gain from previous provisions increased Bashneft's revenue and OIBDA by 13% and 11%, respectively. Similar positive momentum was maintained in the Developing Assets portfolio, where revenue expanded 19% year-on-year and OIBDA loss was reduced.  SMM, Binnopharm and MTS Bank each delivered a turnaround in profitability and SSTL reduced operational losses despite remaining uncertainty with regards to our investments in India.

Since the beginning of the year Sistema has initiated several important strategic developments designed to enhance its existing investments and enable expansion into new areas. These include RTI's consolidation efforts in the high tech sector, Medsi's merger plans with SUE, joint investment into agriculture with Louis-Dreyfus and the recently announced monetisation of our investments in the energy sector with the sale of Bashkirenergo's generation assets. Moreover, after the end of the reporting period our exceptionally strong balance sheet was further boosted by a successful placement of US$ 500 million in Eurobonds.

Taking into account the strength of our position, the Board of Sistema has approved measures necessary for a buyback programme of US$ 300 million, details of which will be provided in due course. We believe Sistema's shares offer one of the best value opportunities in the market and, combined with our strong balance sheet and expanding asset base, the Group is well placed to deliver shareholder growth in the future".

Conference call information

Sistema's management will host an analyst conference call today at 9 am (New York time) / 2 pm (London time) / 3 pm (CET) / 5 pm (Moscow Time) to present and discuss the first quarter results.

The dial-in numbers for the conference call are:

UK/International:        + 44 207 190 1530

US:                            +1 480 629 9692

And quote the conference call title: "Sistema 1Q 2012 Financial Results".

A replay of the conference call will be available on the Company's website www.sistema.com for 7 days after the event.

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