AFK Sistema posts 2Q 2010 net income of $144 million

Russian industrial conglomerate, AFK Sistema, has posted a 2Q 2010 Net Income of $144 million under U.S. GAAP.

The net result is down 41.5% year on year from the $246.2 million net result posted for 2Q 2009, despite 2Q OIBDA rising 56.4% year on year to $1.871 billion, as revenues rose 63% year on year to $6.918 billion.

Sistema said the results reflected the impact of a ‘significant contribution’ from its oil and energy business unit on revenues and OIBDA, coupled with a foreign exchange loss in 2Q 2010.

President and CEO of Sistema, Leonid Melamed, was upbeat commenting on the results and said the increasing efficiency of the Company’s assets was allowing it to reduce its debt burden.

“We are pleased with the results for the second quarter of 2010 as group revenues and OIBDA displayed double digit growth versus our strong performance in the first quarter. Solid results were posted across our entire portfolio: healthy improvement to profitability in our Telecoms business unit, continued significant growth in the Oil and Energy business unit, strengthening of margins in the Consumer business unit and sales and profitability in our High Technology business that now exceeds pre-crisis levels. This strong operating performance has provided excellent cash yield, net cash provided by operations more than tripling quarter on quarter, allowing us to deleverage at the holding company level.”

Melamed added that AFK Systema would further explore new investment opportunities, with the focus on infrastructure and communication media.

“We will maintain our focus on optimizing our portfolio in the second half of the year, while remaining alert to opportunistic new investments. This means investment emphasis on infrastructure providing value-added services to meet the basic needs of the Russian population, and investment in internet and communications, plus partnerships with the state where we view that as advantageous.”