Revenues of LSR Group for the First Half of 2008 Grew by 53% and EBITDA Increased by 83%

On 1 October 2008, the Board of Directors of OJSC LSR Group (LSE: LSRG, MICEX, RTS: LSRG) approved the consolidated financial statements for the first half of 2008 prepared in accordance with IFRS. The independent review of the financial statements was carried out by KPMG.

In the first half of 2008, LSR Group recorded the following financial results:

- Revenues increased by 53% to US$940 million.

- EBITDA grew by 83% to US$243 million and EBITDA margin was up by 4% to 26%.

- Normalised operating profit grew by 89% to US$205 million.

- Normalised net profit grew by 96% to US$124 million

- A loss of US$159 million arising from an investment property revaluation was recognised in the income statement (non-cash item)

- The market value of the real estate and land asset portfolio, according to the independent  valuer DTZ as at 30 June 2008, reached US$6.6 billion, 17% more than as at 31 December 2007 (approx. US$5.7 billion).

Chief Executive Officer LSR Group Igor Levit commented:

“We are pleased with the operational results of the first half of 2008 that convincingly demonstrate  the profitable growth of the company and its ability to generate strong operating results. In the first half of this year we continued the execution of our strategy to strengthen our positions in all the segments of our home market of St Petersburg and to expand our presence in other regions that are of key importance for us. In particular, in the Urals, we acquired building materials production  capacities and the leading panel construction company with a dominant market position and also proceeded with the acquisition of a major developer in the region with a sizable land bank.

We continued the execution of our investment programme to enhance the performance, to modernise and to expand the capacity of our business units. This will help us to take full advantage of the opportunities created by the high demand in the infrastructure construction sector now actively developing in Russia.”

Full version of the press-release (.pdf)>>

Notes to Editors:

OJSC LSR Group is a persified construction company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate development. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction — from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.

LSR Group has operations and offices in a number of cities in the Leningrad region, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany. LSR Group employs around 18,000 people.

In 2007, the sales revenues of LSR Group were US$ 1,403 million.

LSR Group is a public company, with its GDRs listed on the London Stock Exchange and its shares listed on MICEX and RTS.

LSR Group has two credit ratings: B1; outlook – Stable, assigned by Moody’s Investors Service, and B+; outlook – Stable, assigned by Fitch Ratings.

In December 2007, LSR Group was awarded ‘The Company of the Year’ National Award in the ‘Construction’ category.

For more details please contact:

Kliment Falaleev, Director of Investor Relations

Tel:   +7 812 571 7850

Mob: +7 921 953 1641

Fax:  +7 812 312 8565

Email: falaleev@lsrgroup.ru

Julia Sokolova, Director for Corporate Communications and PR

Tel: +7 812 314 1044

Email: press@lsrgroup.ru

www.lsrgroup.ru