Moscow, Russia - September 27, 2007 - Sistema-Hals (LSE, MICEX, RTS: HALS), one of the largest diversified companies on the real estate market in Russia and the CIS, today announces its consolidated unaudited financial results for the first half of 2007 in accordance with US GAAP, as well as the results of an independent valuation of the Company's share in real estate property and projects conducted by Cushman & Wakefield Stiles & Riabokobylko (C&WS&R).

Consolidated revenue for the first half of 2007 increased by 21.7% to USD 129.8 million;

Value of Sistema-Hals' stake in property and projects increased by 41.3% and totaled USD 2,882 million (as of July 1, 2007).

Felix Evtushenkov, President, JSC Sistema-Hals, said:"In the first half of 2007 we were focused on enhancing of our share in the most interesting development projects in different market segments. The growth in the value of Sistema-Hals' share in property and projects confirms that we are pursuing the right strategy of building a diversified portfolio of the most attractive properties and projects in the most attractive segments of the market. We are determined to further improve the operating efficiency of our business and increase market share with the aim of maximizing shareholder value."

Financial Highlights

Sistema-Hals' consolidated revenues for the first half of 2007 increased by 21.7% year-on-year to USD 129.8 million, compared to USD 106.6 million in the first half of 2006, driven mainly by the strong performance of the Real Estate Development division.

Real Estate Development:

Sistema-Hals' consolidated revenue from Real Estate Development grew 12.9% year-on-year to USD 87.7 million in the first half of 2007. This growth was mainly led by the completion and sale of the Sadovnicheskaya 75 building in Moscow; higher prices and sales of land plots under the Avrora project in the Moscow region; and the construction of the Yartsevskaya 27v residential building in Moscow. The Real Estate Development division in the first half of 2007 represented 67.6% of total Company revenues.

Project and Construction Management:

Project Construction Management revenues grew to USD 14.6 million in the period from USD 13.3 million in the first half of 2006. This growth was primarily driven by several major projects: the construction design of a Moscow metro line and two new metro stations at Strogino and Mitino and the Krasnopresnensky Prospekt design project. OIBDA of the Project Construction Management division grew 68.6% year-on-year to USD 8.5 million in the first half of 2007. The Project and Construction Management division represented 11.3% of total revenues in the first half of 2007.

Asset Management:

Asset Management revenues increased by 59% year-on-year to USD 17.9 million in the first half of 2007, primarily due to the increase in sales of houses and in rental revenues from single family houses. The Serebryany Bor settlement remained the most significant source of rental revenues in the first half. The Asset Management division OIBDA increased by 105% year-on-year to USD 11.6 million and represented 13.8% of total revenues in the first half of 2007.

Facility Management:

The Facility Management division reported year-on-year revenue growth of 116.6% to USD 9.6 million in the first half of 2007. The growth was primarily due to an increase in revenues from services provided to subsidiaries of JSFC "Sistema". The Facility Management division's OIBDA grew 43.6% year-on-year to USD 0.5 million in the first half of 2007. This division represented 7.4% of total revenues in the period.

Operating expenses

Total operating expenses for the first six months of 2007 amounted to USD 221.7 million, compared to USD 64.6 million in the same period last year. The increase was largely due to the one-off non-cash expense of a stock bonus plan for the Company's management and BoD members in the amount of USD 98 million. Expenses also increased with the growth in the number of new development projects and projects in the early stages of implementation.

Depreciation and amortization charges in the first half of 2007 increased to USD 6.1 million from USD 1.7 million a year earlier.

OIBDA

Consolidated OIBDA amounted to negative USD 85.8 million in the first half of 2007.

Income Tax

Income tax expense rose to USD 10.2 million in the first half 2007 from USD 4.7 million a year earlier.

Net loss

The Company's consolidated net loss in the first half 2007 amounted to USD 99.6 million.

Valuation of Sistema-Hals' share in real estate property and development projects

The value of Sistema-Hals' share in properties and projects grew 41.3% in the period from
January 1 to July 1, 2007, according to an independent appraisal done by Cushman & Wakefield Stiles & Riabokobylko (C&WS&R).

C&WS&R determined that the total market value of 100% ownership in 103 projects and properties amounted to USD 3,525 million on July 1, 2007, of which Sistema-Hals' share (after minority interests) amounted to USD 2,882 million. In its previous report, C&WS&R valued 100% of Sistema-Hals' portfolio of properties and projects at USD 2,547 million as of January 1, 2007, with the share directly owned by the Company valued at USD 2,040 million.

The growth was driven primarily by an increase in the volume of projects and properties, as well as higher real estate prices.

Sistema-Hals' key business segments are real estate development, project and construction management, asset management and facility management. C&WS&R appraises only real estate and projects that are part of Sistema-Hals' Development and Asset Management divisions.

The above appraisal represents the aggregate current value of various properties and projects in the real estate sector and cannot be seen as an appraisal of the project portfolio within the context of its sale as a whole.

Subsequent events

In September Sistema-Hals acquired a 74.9% stake in Gorki-8 Ltd., which allowed the Company to take a control of 35,000 m? of real estate (including more than 70 townhouses and a retail mall), and nine hectares of land on the Rublevo-Uspensky Highway. This acquisition forms part of the company's strategy of building up assets in the premium segments of the market in order to generate rental income. Sistema-Hals is increasing its holdings in the rapidly growing Moscow region property sector and will continue to acquire significant positions in this real estate segment.

In July 2007 Sistema-Hals acquired a 28% stake in the KAMELIA Health Spa. JSC Sistema-Hals had already acquired 67.58% of the shares in KAMELIA Health Spa in March 2007, making a present-day holding of 95.58%.

In July 2007 Sistema-Hals received a "B1" long-term foreign currency Corporate Family Rating from Moody's Investors Service, and a "B+" Issuer Default rating and "B" Short-term rating from Fitch Ratings. All ratings carry "Stable" outlooks. At the same time Moody's Interfax Rating Agency has assigned to Sistema-Hals an "A1.ru" long term national scale rating, and Fitch Ratings has assigned a "A-(rus)" National rating. The highest credit rating awarded to Sistema-Hals among all other real estate developers in Russia represents a solid intermediate benchmark, which we plan to outperform as the Company continues its execution strategy.

In July 2007 the Board of Directors of Sistema-Hals approved a deal to complete a credit agreement with VTB Bank. Under the terms of the deal VTB will provide Sistema-Hals with financing of up to USD 500 million for a period of five years. These credit resources will be used to refinance bridging loans, as well as to finance the company's current investment programme.