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UPDATE 1-Sistema-Hals loss narrows, portfolio value seen down

Published 12/11/2008, 11:11 AM
Updated 12/11/2008, 11:15 AM

* Says primary projects value likely down 15-20 percent * Forex loss $37.8 million vs $9.65 million year-ago gain

* To halve 2009 SG&A expenses, cut staff by 40 percent

(Adds details)

MOSCOW, Dec 11 (Reuters) - Russian developer Sistema-Hals said on Thursday its net loss narrowed to $72.5 million from $77.6 million a year earlier as it returned to operating profit and pledged to cut costs and staff numbers.

The company also said the value of primary projects in its portfolio is likely to have devalued by 15 percent to 20 percent since its July valuation.

Sistema-Hals blamed this on the worsening market conditions, and noted the rest of its projects may have been affected to a greater extent.

Sistema-Hals, part of holding company Sistema, said in a statement its operating income totalled $26.9 million in January-September, from a loss of $71.8 million for the first nine months of 2007.

It also reported operating income before depreciation and amortisation (OIBDA) of $42.9 million after the negative OIBDA of $63 million a year ago.

Revenues rose 57 percent to $325.8 million, from $207.5 million. Revenues from real estate development rose 74.2 percent to $248 million.

Operating expenses edged up 7 percent to $298.9 million.

Breaking down the figures, cost of sales rose 63 percent to $214 million, while selling, general and administrative expenses (SG&A) fell 50.5 percent to $69 million. Depreciation and amortisation totalled $16 million, from $8.8 million a year earlier.

The company said its loss on foreign currency transactions reached $37.77 million, from a gain of $9.65 million a year ago, as the rouble depreciated against a U.S. dollar, resulting in an increase in its dollar-denominated debt servicing costs.

It also said it aimed for a 50 percent decrease in SG&A expenses next year to about $40 million and would reduce headcounts by nearly 40 percent. (Reporting by Melissa Akin and Maria Kiselyova; Editing by Andrew Macdonald)

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