SISTEMA Sistema is the most prominent business empire with the support of the city hall under Mayor Yuri Luzhkov. Under the leadership or Vladimir Yevtushenkov, Sistema has grown into a diversified empire with interests in telecommunications, technology, retail, oil and financial services (including Rosno – one of Russia’s largest insurance companies). The jewels in its crown are majority shareholdings in Eastern Europe’s largest mobile operator Mobile Telesystems (MTS), and in the Moscow wireline incumbent MGTS, now consolidated with other assets into Comstar.
The group has a long track record in the public equity markets. Back in 1999, MTS was one of the first IPOs to come out of Russia, and Sistema became the sole controlling shareholder in 2005 with the exit of Deutsche Telecom. In February 2005, Sistema went public itself with a $1.4 billion IPO and London listing, followed exactly a year later by Comstar. The proceeds of this latest IPO may be destined to finance a bid for Svyazinvest in the privatization of that national incumbent wireline telecoms holding, expected during the next twelve months. Meanwhile, the group has found a new use for its cash in the form of a $600 million financial investment in the oil and petrochemicals industry of Bashkortostan.
SISTEMA HEAD & GOVERNMENT CONNECTIONS: Vladimir Yevtushenkov
Vladimir Yevtushenkov is the founder and majority owner of the major Moscow-based conglomerate, Sistema. With an array of educational qualifications under his belt – degrees from the prestigious Mendeleev Chemical-Engineering Institute and Moscow State University, and a PhD in economics – Yevtushenkov worked in the Soviet petrochemical industry until joining the Moscow municipal administration in the late 1980s.
His relationships with the Moscow city government under Mayor Luzhkov were the foundation on which Yevtushenkov built Sistema, starting in 1993. Vladimir Jewtuschenkow (1948- ) is considered a “King of Moscow” and financial head of the urban empire. But it remains all in the family, because Jewtuschenkow is the sister of Luzkov's wife.
In December 2005, Yevtushenkov announced that he was giving 1% of his 65% stake in the company to senior managers as part of a share incentive scheme.
Moscow Mayor Yuri Luzhkov: Yuri Luzhkov – Was in the USSR as a general director of Khimavtomatika-Chemie Group with 20,000 workers to the elite of the country. In 1986 he moved as Vice Chairman of the Moscow City Council. Luzhkov played a significant role in the early phase of Russian capitalism in 1987, primarily by successfully resisting the privatization in Moscow.
Luzhkov insisted on greater control and higher income for the city not least to its large infrastructure projects financing. In the power struggle with refomist President Yeltsin took Party Luzkhov and blocked full privatization of Moscow.
Unlike the rest of the country workers and managers were allowed only a maximum of 10% over their companies (usually were up to 51%). The city administration has created a series of Holdings, in which the most productive companies and values of the city have been introduced. The city maintained control by only licenses distributed, but retained the property.
Luzkov personally benefited from this economic system. His wife, Yelena Baturine, in the construction sector rose to millionaire. Her sister is married to the president of the urban Sistema holding company, Jewtuschenkow.
Luzhkov controls the private companies on exactly Este. Non-urban companies receive preference permits and contracts if they informal service for the city. Anyone who has land or property to buy/build, we must, in any way the city. Even foreign chains had control of the city interests in the loca joint-ventures over.
The city of Moscow is also involved in other companies owned by Sistema:
Telecommunications – The core of the Sistema holding company, the telecommunications holding such as the Mostelekom Group (jointly with the City of Moscow) and the largest Eastern European mobile phone company Mobile TeleSystems (MTS, in New York on the stock exchange), the Sistema together with Deutsche Telecom AG building.
Finance – Sistema controlled jointly with the city of Moscow an number of banks, including one of the largest banks in Russia, the Bank of Moscow and one of the largest insurance (ROSNO)
Construction – Sistema-Gatz (real estate developer)
Hotels – Intourist
OTHER PERSONALITIES: Dimitri Zubow
- High Komsomolführer
- 1992-96 Gen.Dir. AOZT Alon AOZT Alon
- Then in the banking
- 2000 - Vice-Chmn Sistema
Assets:_$_Finans_2006:_$_180_million_$_Finans_2007:_$_200_million__Yelena_Baturina'>Assets: $ Finans 2006: $ 180 million
$ Finans 2007: $ 200 million
Luzhkov 1988 married his assistant Yelena Baturina, who from 1991 onwards a steep career in the private sector . It controls a plastic Group, cement factories and one of the largest construction company in Moscow (INTEKO). A classic example of nepotism. The almighty Mayor participates on the company of his wife at the Moscow building boom. The decision on all major projects, the mayor. In addition Baturina still owns hotels on the Black Sea, dairy farms and lands. 2005 they sold their holdings Cement for the record price of $ 800 million to the Euro Cement Group. Her brother Victor Baturina (300 million $ Plac. - Finans 2007) will take legal action against them.
Sistema Real Estate Company, or Sistema Hals, is a part of Sistema JSFC, an investment holding company that operates as a consumer services company in Russia and the Commonwealth of Independent States. The company develops and manages a portfolio of businesses in various service-based industries, including telecommunications, technology, insurance, banking, real estate, mass media, and retail. SourceSource
MOSCOW, RUSSIA - 2 January 2008 - Sistema-Hals OJSC (LSE, MICEX, RTS: HALS), one of the largest diversified real estate companies in Russia and the CIS, has announced today its strategic partnership with Saraya, a real estate development and asset management company investing in travel and tourism, to invest in Kamelia Investment Company to develop a Saraya branded project at the Black Sea in Sochi. Source
Revenues in Sistema Hals, a leading Moscow-based real estate development, management and investment company, doubled year on year in the fourth quarter and increased by 59.9% for the full year 2007, primarily as a result of the strong growth in the real estate development division. Source
Sistema-Hals JSC reported unaudited consolidated earnings results for the first quarter ended March 31, 2008. The company reported net income of $26,630,000 on revenues of $141,631,000 against net income of $5,893 on revenues of $34,502,000 for the same period a year ago. This growth in revenue by 311% year-on-year was led by several factors including the sale of the Rochdelskaya 22 project; revenues, recognized from the sale of a complex of buildings at 8 Marta Street; continuing sales of units in the ongoing 'Dnepropetrovskaya', 'Nahimovskiy', 'Michurinskiy', 'Rublevskoe highway' residential projects and an increase in rental revenues from single family houses in the Serebryany Bor settlement. Source
Sistema Hals (USD)
Year to 31 Dec 2005A 2006ª 2007E 2008E 2009E
Sales ($M) 93.1 282.9 422.3 630.6 877.4
Net Income ($M) 0.7 55.6 22.4 116.6 196.1
Basic EPS ($) 0.00 0.29 0.10 0.52 0.87
Basic EPS (Old) ($) 0.00 0.29 0.10 0.52 0.87
PE (x) 2,150.6 32.7 94.2 18.1 10.8
EV/EBITDA (x) 148.5 21.7 13.9 5.5 2.7
3m 2008 3m 2007
(USD '000) (USD '000)
Revenues 141,631 34,502
Operating expenses (115,619) (29,996)
Operating income 26,012 4,506
OIBDA 31,231 7,387
Net income 26,630 5,893
Source – great snapshot of current financial status