Tuesday, April 9, 2013

SSTL strategy for future....

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SSTL EBITDA halves to INR 278 cr YOY dring Dec quarter

New Delhi: Indian telecom arm of Russian conglomerate Sistema, Sistema Shyam Teleservices (SSTL), today reported reduction in net loss at Rs. 778.7 crore for the quarter ended December 31, 2012, when the company was facing uncertainty over its operations in the country.

The company had reported a net loss of Rs. 1,197.7 crore during the same quarter a year ago.

"The net income benefitted due to improvement in OIBDA (operating income before depreciation and amortization) but the impact was completely offset by the unfavorable movement in exchange rate," Sistema Shyam Teleservices (SSTL) said in a statement.

This, it said, resulted in recording forex losses with respect to long term foreign currency denominated loans, as the rupee depreciated against the dollar at the end of the quarter.

The operating income before depreciation and amortisation (OIBDA) loss of the company almost halved to Rs. 278.6 crore during the reported quarter from Rs. 569 crore in the year-ago period.
"During the quarter the company continued to take steps to reduce its cash outgo. SSTL recorded its lowest full year OIBDA loss in the last three years," SSTL chief financial officer Sergey Savchenko said.
All but one licence of the SSTL were cancelled by the Supreme Court in February, 2012 along with 101 other 2G telecom licences.

The company had to bid for fresh spectrum in March 2013 to continue its operations.

"During the quarter, our focus was on retaining subscribers, controlling expenses and preparing for auctions," Sistema Shyam Teleservices' President and chief executive officer Vsevolod Rozanov said.

SSTL's data card subscriber base for the quarter declined by 2 per cent to 1.78 million subscribers due to uncertainties and the new regulatory requirements for customer registration, the statement said.

Following auctions, SSTL secured spectrum in eight circles --Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) & West Bengal -- for Rs. 3,639 crore.

"With Rajasthan circle also a part of SSTL's footprint, we will be able to potentially service 40 per cent of country's population, address around 60 per cent of data business potential and safeguard 75 per cent of our current revenues," Rozanov said.

The revenue of the firm during the last quarter of 2012 declined marginally by 0.54 per cent at Rs. 390.2 crore from Rs. 392.3 crore it reported at the end of corresponding period in 2011.

For the year ended December 31, SSTL net loss reduced to Rs. 2,982.1 crore from Rs. 3,531.4 crore it posted in previous fiscal.

The OIBDA loss of the company narrowed to Rs. 1,445.6 crore on annual basis from Rs. 1,892.7 crore at the end of 2011.

The annual income of the company increased by 31 per cent at Rs. 1,619.2 crore in 2012 from Rs. 1,234.9 crore in 2011.

The total capital expenditure investments made by SSTL in India at the end of December 31, stood at Rs. 6,568 crore. This included investment of Rs. 18.2 crore made during fourth quarter of 2012.

Consolidated debt from banks and financial institutions at the end of December 31, 2012 stood at Rs. 5,670 crore, it said.

Sistema projectsSSTL to be EBITDA positive in 2 years and may consider an IPO


Sistema may spend $1 bn more in India in search of profit

Sistema Shyam TeleServices plans to make the investment through 2015, with $415 mn being spent this year
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First Published: Tue, Apr 09 2013. 05 55 PM IST
A file photo of SSTL’s chief executive officer Vsevolod Rozanov. Sistema’s India unit now projects operating income before depreciation and amortization to become positive in about two years, Rozanov said. Photo: S. Kumar/Mint
A file photo of SSTL’s chief executive officer Vsevolod Rozanov. Sistema’s India unit now projects operating income before depreciation and amortization to become positive in about two years, Rozanov said. Photo: S. Kumar/Mint

Moscow: Russian billionaire Vladimir Evtushenkov’s AFK Sistema, which has written off about a third of its $2.8 billion investment in Indian mobile services, plans to spend as much as $1 billion more to expand in the market.

“The company’s Sistema Shyam TeleServices Ltd (SSTL) unit plans to make the investment through 2015, with $415 million being spent this year,” SSTL chief executive officer Vsevolod Rozanov told reporters in Moscow on Tuesday. That includes interest costs, capital expenditures, covering losses and possibly developing faster wireless services using LTE technology, he said.
Sistema’s five-year campaign to benefit from growth in India’s mobile-phone market has so far failed to add to earnings amid intense competition. The India unit now projects operating income before depreciation and amortization to become positive in about two years, and it may consider market consolidation or an initial public offering once profitable, Rozanov said.
SSTL’s fourth-quarter net loss narrowed to Rs.779 crore, the unit said on Tuesday in a statement. Sistema, which controls Russia’s largest mobile operator OAO Mobile TeleSystems or MTS, with 101 million users at the end of 2012, entered India five years ago via a joint venture with local Shyam Group. The Russian government acquired a 17% stake in SSTL two years ago.
Sistema, based in Moscow, fell 1.7% to 25.50 rubles at 2.52pm local time.
License challenges
Last year, India’s Supreme Court cancelled 122 permits held by telecommunications operators in the country as the government sought to auction these licenses again at a higher price, citing corruption during their original allocation.
Sistema skipped a November auction, which collected less than a quarter of the government’s $7.3 billion target. It was the only bidder in a repeated auction in March this year, when India agreed to lower prices for the remaining spectrum. SSTL, which earlier had a pan-Indian license, decided to stay in nine out of 22 regions, servicing 40% of the country’s population.
SSTL agreed to pay about $665 million for 20-year licenses for 800 megahertz spectrum, Sistema said in a 11 March statement. The $297 million paid by Sistema in 2008 for the same licenses will count toward the total and the remainder may be paid during 10 years starting in 2016, according to the statement.
Evtushenkov, with wealth valued at $6.7 billion by Forbes magazine, made his money in telecommunications. MTS accounts for about 36% of AFK Sistema’s revenue and 62% of the company’s operating income before depreciation and amortization, according to third-quarter presentation. Sistema also controls oil producer OAO Bashneft.BLOOMBERG
Kartikay Mehrotra in New Delhi contributed to this story.

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A BLOG FOR ALL THE SHAREHOLDERS OF SSTL (FORMERLY SHYAMTELELINK LTD) TO COME TOGETHER AND DISCUSS ISSUES OF COMMON INTEREST. YOU CAN REACH US AT AMSOST@GMAIL.COM