Sitronics Loses on AFK Sistema Dependence
The IT-company of Russia, Sitronics, announced yesterday the Q1 net loss of $28 million. The company is suffering because of the failure to diversify business and get rid of dependence of its parent company, AFK Sistema.
Sitronics announced yesterday the Q1 non-audited consolidated results under U.S. GAAP. The company generated $310 million in revenues, but suffered the OIBDA loss of $11.4 million and net loss of $28 million.
Although Sitronics hasn’t disclosed the revenues derived in the first quarter of 2006, its president, Evgeny Utkin claims the Q1’07 amount gained 10 percent on year. But matching the annual indicators will hardly be particularly correct. Past year, Sitronics didn’t take into account Greek Intracom, which was acquired in summer.
The losses, Utkin said, could be blamed on spending for vertical integration purposes, for developing solutions on NGN, 3G and WiFi. “A number of large-scale projects have been transferred from the first to the second half of 2007. They are, in particular, creation of NGN in MGTS and construction of 3G network for MTS [both of them are subsidiaries of AFK Sistema). So, we have invested in developing solutions, but failed to sell them,” Utkin explained.
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All the Article in Russian as of June 26, 2007
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