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Sitronics boosts sales in second quarter

by Stuart Wilson, Thursday 11 September 2008

Russian IT and telecoms giant Sitronics has posted strong second quarter results with sales climbing 47% year-on-year to US$481m. Sitronics’ IT revenues contributed US$188.2m to the total – an increase of 35% for this segment year-on-year. Operating profit before depreciation and amortisation hit US$25.4m – a reversal from a loss of US$27.2m a year earlier in the second quarter of 2007. Sitronics recorded a 77% year-on-year reduction in net loss from US$51.9m to US$12m.

Sergey Aslanian, president of Sitronics, commented: "We offer competitive products, for which there is significant demand not only in Russia and the CIS, but also in the Middle East, Asia and Africa. Our geographical range and industry sector experience enables us to enter new markets and provide tailored solutions for market leading companies. Our strategy is also focused on the delivery of large-scale infrastructure projects in cooperation with the public sector, and we have made further progress in this area during 2008.”

"We continue to execute our ’Crystal’ strategy, which was approved in March 2008. We are committed to further accelerating our progress and continuing to outperform market growth levels, which is why we have accelerated our capital investment programme and now expect to deliver US$2 billion of revenues in 2008," Alsanian added.

Sitronics offers telecommunication solutions, including software, equipment and systems integration, IT solutions and microelectronic solutions in Russia and the CIS with a strong presence in Central and Eastern Europe and a growing presence in the Middle East and Africa. Sitronics has vendor relationships with Siemens, Ericsson, Motorola, Oracle, Intel, Sun and Microsoft.

Sitronics IT arm has signed US$51m in new contracts in the second quarter. Kvazar-Micro, an IT leader in Ukraine and one of the largest IT providers in the countries of CIS and Eastern-Europe, was integrated under the Sitronics brand in June 2008 and is now operating as Sitronics Information Technologies. The integration and rebranding followed the increase in Sitronics’ stake in Kvazar-Micro to 87% in March 2008. Kvazar Micro employs 1,500 people in 15 countries.

Sitronics Information Technologies projects in the second quarter included starting the final stage of the IT infrastructure project for the State Statistics Committee of Ukraine during the second quarter with the total value of the second stage of the project amounting to US$2.7m. The deployment of an Oracle Siebel CRM system for MTS was also started, while the development of a contact centre for the largest tourism network in Russia - Kuda.ru - was completed. Sitronics also implemented an Oracle e-business suite, a full-scale ERP system, for Comstar-UTS during the quarter.

Sitronics has also signed a recent deal with fixed line telecoms operator Comstar-UTS to provide equipment for its WiMAX network in Moscow. The project is expected to complete by the end of the year.

Sitronics consumer services and products division continued its restructuring exercise in the second quarter as part of its strategy to focus on higher margin products and services and to adapt to the changed market conditions. Revenues were lower year on year due to the discontinuation of sales of certain product lines, but the profitability of the business improved year on year. Second quarter highlights included the termination of the unprofitable projects and the continuation of the assembly and supply of notebook computers and LCD monitors to leading retailer Depo Computers, plus the launch of Sitronics branded mobile phones.

Sitronics’ telecoms business continued its expansion into fast growing new markets during the second quarter and completed the first stage of a US$22.7m project to deliver end-to-end information technology infrastructure to Warid Telecom in Uganda. Sitronics also signed a contract with Syrian Wireless Organisation to build a new wireless telecommunications network in Syria.

Sitronics serves over 3,500 clients, maintains offices in 32 countries and exports its products and services to more than 60 countries. Sitronics has over 11,000 employees of whom approximately 4,500 are involved in research and development.

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April, 2020

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