SSA.L Regulatory News (SSA)

 SISTEMA ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER 2019

Moscow, Russia - 27 November 2019 - Sistema PJSFC ("Sistema" or the "Company", together with its subsidiaries, "the Group") (LSE: SSA, MOEX: AFKS), a publicly-traded diversified Russian holding company, today announces its unaudited consolidated financial results in accordance with International Financial Reporting Standards (IFRS) for the third quarter ended 30 September 2019.

SUCCESSFUL DELIVERY AGAINST STRATEGIC AND OPERATIONAL GOALS

3Q 2019 FINANCIAL RESULTS

Andrey Dubovskov, President and Chief Executive Officer of Sistema, said:

"Sistema's results for 3Q 2019 reflect the successful growth and operational efficiency of the Corporation's portfolio companies, as well our success in deleveraging and capitalising on new attractive investment opportunities at the Corporate Centre level. Dynamic growth at MTS, Detsky Mir, Medsi, Steppe and other key assets drove Sistema's revenue growth of 7% year-on-year in 3Q 2019.

"MTS posted high growth rates driven by revenue from mobile services as well as an increasing contribution from MTS Bank. Detsky Mir continued to strengthen its market leadership, and substantially grew like-for-like sales compared with 1Q and 2Q 2019. The company consistently demonstrates high levels of profitability while realising a significant increase in dividend payments.

"Steppe achieved double-digit growth rates and delivered record quarterly revenue of more than RUB 10 billion. Medsi also delivered double-digital revenue growth due to continued growth across all segments - Voluntary Health Insurance, Mandatory Health Insurance and individuals.

"Segezha Group's results were impacted by challenging global markets for pulp-and-paper products. The company is implementing measures to increase operational efficiency and optimise costs.

"Rapid growth of our assets and the successful monetisation of Leader Invest supported a notable reduction in the Corporation's leverage. In 3Q 2019, net financial liabilities at the Corporate Centre declined by 7% year-on-year as we continued to optimise the structure and repayment schedule of our debt portfolio.

"We are also continuing to invest in attractive projects on the Russian and global markets through our funds platform. Since the start of 3Q 2019 the Corporation's venture funds have participated in funding rounds for Geosplit, a developer of marker diagnostics for the oil and gas industry, as well as SenSat, a company using AI to create digital models of real-world locations.

"In line with our strategy, we are continuing to work on effective monetisations of the Corporation's investments. In November we successfully completed a public offering of shares in Detsky Mir, raising RUB 12.5 billion. We launched this offering with an aim to enhance liquidity of Detsky Mir shares by increasing free float. The offering attracted strong interest both in Russia and globally from investors drawn by Detsky Mir's outstanding financial and operational profile. As Sistema will remain a significant shareholder, we affirm our commitment to Detsky Mir's strategic development and leadership team. We intend to use the proceeds from the transaction for further deleveraging and for new investments."

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Conference call information

Sistema's management will host a conference call today at 9:00 am (New York time) / 2:00 pm (London time) / 3:00 pm (CET) / 5:00 pm (Moscow time) to present and discuss the 3Q 2019 results.

To participate in the conference call, please dial:

Russia

+7 495 646 9190

8 10 8002 8675011 (toll-free)

UK

+44 330 336 9411

0800 279 7204 (toll-free)

US

+1 929 477 0402

888 254 3590 (toll-free)

Conference ID: 2961229

Link to webcast: https://webcasts.eqs.com/sistema20191127

Or quote the conference call title: "Sistema Third Quarter 2019 Financial Results".

A replay of the conference call will be available on Sistema's website www.sistema.com for at least seven days after the event.

For further information, please visit www.sistema.com or contact:

FINANCIAL SUMMARY AND GROUP OPERATING REVIEW

Sistema's consolidated revenue grew by 6.6% year-on-year in 3Q 2019, driven by higher revenue at key assets: at MTS due to continued growth in mobile services revenue in Russia and Ukraine, as well as revenue growth at MTS Bank; at Detsky Mir primarily due to the increased pace of like-for-like sales growth in Russia and Kazakhstan, as well as the ramp-up to full capacity of stores opened in 2017 and 2018; at Steppe due to increased sales in the Field Crop and Orchards segments, increased production volumes and higher sales prices of milk in the Dairy segment, and also intensive growth of the Sugar and Grocery Products Trading segment; and at Medsi due to significant growth of revenue across all channels.

Adjusted OIBDA for 3Q 2019 increased by 4.4% year-on-year, driven by OIBDA growth at MTS due to strong results in all geographical segments; at Detsky Mir due to strong revenue growth and increased operational efficiency; and at Medsi following revenue growth, and also due to the effect of participation in a joint venture development project with Capital Group. Group OIBDA was also affected by a net loss at Ozon, accounted for using the equity method (investment in associates), of RUB 1.8 billion.

Group sales, general and administrative costs (SG&A) increased by 10.1% year-on-year in 3Q 2019 to RUB 38.2 billion, primarily as a result of growth of expenses at MTS, Detsky Mir and the Corporate Centre. The SG&A/revenue ratio increased from 17.3% to 17.9% year-on-year, impacted primarily by the increase in expenses at the Corporate Centre due to asset monetisations.

Group capex decreased by 9.7% year-on-year to RUB 29.2 billion.

OVERVIEW OF PORTFOLIO COMPANIES[3]

MTS

Leading telecommunications operator and digital services provider in Russia

MTS's revenue increased by 4.6% year-on-year in 3Q 2019, primarily due to continued growth of mobile service revenue in Russia and Ukraine, as well as higher revenue at MTS Bank and from systems integration services.

OIBDA increased by 8.8% year-on-year in 3Q 2019 due to strong MTS Group results across all geographies, with the largest contribution coming from businesses in Russia and Ukraine. The OIBDA margin improved by 1.8 p.p. year-on-year due to positive dynamics in mobile service revenue and reduction in the share of revenue from retail sales.

Adjusted net profit declined slightly in 3Q 2019 (-1.8%) primarily due to increased interest payments.

OUTLOOK FOR FY 2019

MTS forecasts revenue growth of 6-7% and OIBDA growth of 4-5%.

DIVIDENDS

Under its dividend policy for 2019-2021, MTS aims to pay no less than RUB 28.0 per ordinary share per calendar year. Payments will be made on a semi-annual basis. In November 2019, MTS completed payment of dividends for the first half of 2019 of RUB 8.68 per share (RUB 17.36 per ADR).

KEY EVENTS AFTER THE END OF THE REPORTING PERIOD

In October 2019 MTS's Board of Directors approved a new MTS Group strategy titled "CLV 2.0" for 2020-2022. The primary focus of the new strategy is the creation of an ecosystem of digital services around MTS clients, as well as maintaining a leading position in the Russian telecommunications market.

In November 2019 MTS, along with Sberbank, Gazprom Neft, Yandex, Mail.ru Group and the Russian Direct Investment Fund, entered into a partnership agreement with the aim of creating an alliance in the field of artificial intelligence.

In November 2019 MTS signed a binding agreement to sell its telecommunications operations in Ukraine. On 23 November 2019 the MTS Board of Directors recommended to the Extraordinary General Meeting of shareholders to be held on 30 December 2019 to approve a special dividend in the amount of RUB 13.25 per ordinary share (RUB 26.50 per ADR) for a total of RUB 26.5 billion based on the Company's performance in the first nine months of 2019 and taking into consideration the planned sale of the telecommunications operations in Ukraine.

Detsky Mir

Largest children's goods retailer in Russia

Detsky Mir's revenue grew by 19.3% year-on-year in 3Q 2019. This was mainly driven by stronger growth in like-for-like sales in Russia and Kazakhstan, as well as by the ramp-up of stores opened in 2017-2018 to full operating capacity. Revenue from online sales[4] rose by 64.5% year-on-year and accounted for 10.4% in total revenue in Russia for the period.

Adjusted OIBDA increased by 9.3% year-on-year in 3Q 2019 due to robust revenue performance and a focus on increasing operational efficiency. The adjusted OIBDA margin declined slightly to 18.7% in 3Q 2019. The company continued to focus on pricing with the goal of increasing customer traffic and accelerating market consolidation.

Adjusted profit attributable to Sistema decreased by 9.5% year-on-year to RUB 1.2 billion.

22 new Detsky Mir stores were opened in 3Q 2019. As of 30 September 2019, the total number of stores[5] stood at 780. Detsky Mir plans to open no fewer than 100 stores in 2019, an increase over previously announced plans to open 90 new stores.

Net debt grew 25.1% year-on-year to RUB 20.2 billion due to capex related to the construction of the Bekasovo-2 warehouse and opening of the flagship store in Moscow.

KEY EVENTS AFTER THE REPORTING PERIOD

Detsky Mir has continued to develop its online sales. In October 2019, the company launched overnight delivery of online orders from its retail stores in Russia's 30 largest cities and towns for RUB 99. As part of its efforts to expand the offering of its online store from 50,000 SKUs to 250,000 SKUs in the medium term, Detsky Mir plans to launch a pilot version of its marketplace in the Clothes and Shoes category in 2020.

In November 2019, the Board of Directors recommended that an Extraordinary Annual General Meeting to be held on 6 December 2019 approve an interim dividend for 9M 2019 of RUB 3.7 billion, or RUB 5.06 per ordinary share.

In November 2019 Sistema, together with the Russia-China Investment Fund ("RCIF") completed public offering of 175 million Detsky Mir shares for RUB 15.9 billion (RUB 91 per share). As a result of the transaction Sistema and RCIF ownership stakes in Detsky Mir amount to 33.4% and 9.0% respectively.

Segezha Group

Leading Russian vertically integrated forestry holding

Segezha Group's revenue decreased by 17.5% year-on-year in 3Q 2019, due to a decline in prices and sales volumes amid negative market conditions. At the same time, despite a significant decline in plywood prices, revenue from plywood sales grew year-on-year due to an increase in production following the commissioning of new production capacity in the Kirov region in July 2018, as well as higher share of high-margin products in the sales mix.

Adjusted OIBDA decreased year-on-year in 3Q 2019 on the back of lower revenue and due to the rescheduling to 3Q 2019 of an equipment overhaul at Segezha Pulp & Paper Mill. The decline in OIBDA was partly offset by efforts to reduce costs and increase operational efficiency, including a reduction in costs of goods sold and optimisation of SG&A.

Adjusted net profit amounted to RUB 0.2 billion in 3Q 2019 vs. adjusted net profit of RUB 0.5 billion in 3Q 2018. This decrease was due to the decrease in operating profit.

Paper output totalled 88,300[6] tonnes in 3Q 2019, down 10.9% year-on-year. This decrease was due to the rescheduling of an annual maintenance shutdown to 3Q 2019, while in 2018 the repairs were carried out in 2Q. In 3Q 2019, Segezha's sack paper sales decreased by 14.4% year-on-year to 51,000 tonnes due to lower production volumes.

Paper sack sales totalled 342 million in 3Q 2019. Production volumes in the reporting quarter were in line with volumes in the same period a year earlier. In Russia and Europe, Segezha managed to increase average sales price for its products, which was partly offset by strengthening of ruble against the euro.

Birch plywood sales volumes increased by 59.9% year-on-year to 48,300 cu m in 3Q 2019. Output growth was driven by the launch of the new plywood production facility in the Kirov region in July 2018. Segezha expanded its footprint in high-margin markets of Europe and the Americas, as well as continued to increase the share of industrial end clients.

Sawn timber output amounted to 277,700 cu m in 3Q 2019, which was in line with 3Q 2018. A significant volume of unsold sawn timber will be sold in 4Q 2019.

Segezha Group plans to commission a new Windmoller & Hoelscher paper sack production line in Salsk, Rostov region, with capacity of 80 mln paper sacks per year in 4Q 2019. The company also plans to complete the assembly of the third press granulator at its pellet production in Lesosibirsk which should allow it to increase the pellet production volume from 70,000 to 100,000. By the end of 2019, Segezha Group plans to start on the construction of a new plywood plant in Galich, Kostroma region, with the first stage expected to be completed at the end of 2021. With the commissioning of the new plant, Segezha Group expects to increase production of birch plywood to 300,000-320,000 cu m per year. Investment in the project is estimated at RUB 10 billion.

Agroholding Steppe

Major agriculture holding and one of Russia's largest land owners[7]

In 2019, Agroholding Steppe significantly increased its gross crop yield and benefited from high quality grains, as well as record high gross apple yield.

Revenue at Agroholding Steppe rose 26.3% year-on-year to RUB 10.4 billion in 3Q 2019 due to sales growth in the Field Crop and Orchards segments, growth in milk sales volumes and prices in the Dairy segment, as well as rapid development of the Sugar and Grocery Product Trading segment. Year-on-year revenue dynamics was impacted by lower global grain prices with improvement in prices expected in 4Q 2019.

OIBDA decreased year-on-year due to impact of the lower global grain prices as well as the revaluation of biological assets, which was partly offset by improved performance of key business segments.

Steppe reported a minor net loss of RUB 42 million in 3Q 2019.

Capex grew by 22.9% year-on-year in 3Q 2019 and amounted to RUB 0.5 billion. Key areas of investment were the construction of new dairy farms, gradual buyout of land shares and increasing the proportion of owned land in Steppe's overall landbank, as well as upgrades to Steppe's fleet of farm machinery.

Net debt grew year-on-year in 3Q 2019 due to inventory build-up in the Agrotrading and Sugar and Grocery Product Trading segments, as well as due to capital expenditure in 2019.

Harvests of key crops grew by 11% year-on-year in 9M 2019. Despite challenging agroclimatic conditions, Steppe managed to achieve high quality of grains and to increase yields of high-margin crops.

Export volumes in the Agrotrading segment grew by 5.5% year-on-year in 9M 2019 to 717,000 tonnes, which enabled Steppe to become Russia's eighth largest grain exporter as of the beginning of 2019/2020 grain season in 3Q 2019.

The Dairy segment reported continued growth across operational metrics: gross milk yield in 3Q 2019 amounted to 14,000 tonnes, an increase of 17.7% year-on-year, while productivity per cow rose 5.3% year-on-year and the herd consisted of over 5,500 cows at the end of the reporting period.

The Orchards segment delivered a record yield - 22,000 tonnes up 60% year-on-year. Apple quality was also at high levels.

Sales volumes in the Sugar and Grocery Products Trading segment experienced significant growth of 79% year-on-year in 9M 2019 to 227,000 tonnes.

Medsi

Leading private healthcare operator in Russia

Medsi's revenue increased by 18.2% year-on-year in 3Q 2019 to RUB 5.4 billion due to a significant increase in revenue from all channels - a 26% year-on-year increase in revenue from the Voluntary Health Insurance segment (VHI) to RUB 2.1 billion, 20% year-on-year increase in revenue from individual patients to RUB 1.5 billion, and a 12% year-on-year increase in revenue from the Mandatory Health Insurance segment (MHI) to RUB 1.5 billion.

Adjusted OIBDA[8] increased by 81.1% year-on-year in 3Q 2019 to RUB 1.5 billion due to growth in revenue, as well as a result of participation in a joint venture with Capital Group, the Michurinsky Project LLC, which is constructing the Nebo business class residential project on Michurinsky Prospect, with a positive effect of RUB 0.5 billion in 3Q 2019 and RUB 1.0 billion in 9M 2019 year-on-year. The adjusted OIBDA margin grew by 9.8 p.p. year-on-year to 28.2% in 3Q 2019 thanks to growth in capacity utilisation, an increase in efficiency per sq m and growth of treatment volumes at previously opened clinics as well as the effect from participation in the Michurinsky Project joint venture.

Adjusted net profit grew by 275.5% year-on-year in 3Q 2019 to RUB 780 million mainly to the growth in OIBDA.

Revenue in 3Q 2019 at the Clinical-Diagnostic Centre (CDC) on Belorusskaya was RUB 638 million, OIBDA totaled RUB 254 million and the OIBDA margin came in at 40%. Revenue at the CDC on Krasnaya Presnya was RUB 597 million, OIBDA totaled RUB 182 million and the OIBDA margin came in at 30%.

The significant growth in capacity utilisation of in-patient treatment facilities - up 10.0 p.p. year-on-year - is a result of increased treatment volumes across all channels, with MHI acting as the main driver.

The company is continuing construction of a new Multifunctional Centre on Michurinsky Prospect with more than 34,000 sq m of space, with a planned opening in 2020. The facility will house a CDC for children and adults, a daytime in-patient clinic and a 24-hour in-patient clinic with a centre for high-tech surgery. Additionally, Medsi is expanding its network of out-patient clinics in five districts outside central Moscow.

Business Nedvizhimost and its subsidiary Mosdachtrest

Rental assets with a unique pool of properties

In 3Q 2019 revenue from Sistema's rental assets rose by 78.3% to RUB 2.4 billion, driven by a year-on-year increase in commercial real estate sales and growth in the rental portfolio following Business Nedvizhimost's acquisition of 54 telephone exchanges from PJSC MGTS in February 2019. The Company sold 22.68 thousand sq m in 3Q 2019, up from 18.7 thousand sq m in 3Q 2018. Sale of land plots declined from 134 thousand sq m in 3Q 2018 to 106 thousand sq m in 3Q 2019. Revenue growth as a result of the expansion of the portfolio of rental assets amounted to RUB 339 million in 3Q 2019.

OIBDA and the OIBDA margin in 3Q 2019 grew by 280.1% and 38.4 p.p. year-on-year, respectively, as a result of higher revenue and a higher share of higher-margin commercial real estate sales.

Net profit in 3Q 2019 grew by 510.9% year-on-year to RUB 1.2 billion, primarily due to OIBDA growth.

Yuriy Yakovchik was appointed as the General Director of Business Nedivizhimost. Mr. Yakovichik has years of experience in management positions in real estate development and retail.

RTI

Leading developer of high-tech solutions[9]

In 3Q 2019 RTI's revenue grew by 9.1% year-on-year to RUB 5.4 billion due to higher work volumes carried out under long-term government contracts. Revenue flow was also impacted by the uneven distribution of revenue throughout the year, as the majority of volumes are concentrated in the last quarter of the year.

Adjusted OIBDA in 3Q 2019 rose by 148.5% year-on-year to RUB 1.3 billion primarily as a result of increased work volumes performed by RTI Group companies, which in turn supported a higher OIBDA margin of 24.3%.

Adjusted net profit in 3Q 2019 compared to adjusted net loss in the same period of the previous year was due to higher OIBDA margins and lower interest expense as a result of transferring part of RTI Group's debt together with microelectronics assets to Element LLC.

Net debt decreased in 3Q 2019 y-o-y in connection with a portion of RTI Group's debt being transferred together with microelectronics assets to Element LLC, but also due to RUB 1 billion in payments that were made on outstanding debt. At the same time, funds totalling RUB 6.9 billion earmarked for work under state contracts are held on RTI's accounts but not factored into net debt calculations.

Bashkirian Power Grid Company (BPGC)

One of Russia's biggest power grid companies

In 3Q 2019 revenue at BPGC rose by 10.7% year-on-year to RUB 5.0 billion as a result of higher electricity transmission tariffs and an increase in revenue for deployment of communications equipment on electricity pylons by third-parties as well as provision of engineering services.

The 46.6% year-on-year growth in OIBDA to RUB 1,7 billion in 3Q 2019 was due to revenue dynamics that were impacted by the net result of provision creation and write-back related to contractual disputes. The OIBDA margin increased by 35.0% 3Q 2019 as a result of growth of other operating income due to a positive change in provisions.

Net profit in 3Q 2019 increased by 119.2% to RUB 883 million due to OIBDA growth.

In the nine months of 2019 BPGC achieved significant progress in implementing its program on the Comprehensive Modernisation of the City of Ufa Distribution Grid: 33 distribution substations, seven transformer substations and five substations were reconstructed and 3.77 kilometres of cable lines were laid. As of the end of 2019 the programme is forecast to be 91% complete.

In 2019 BPGC is implementing the following additional large projects: Construction of the overhead transmission 110kW Uzyan-Baynazarovo in the Beloretsky region, construction of the Romanovka substation with a 2X40 MVA transformer in the city of Ufa, construction of a double-circuit branch line off of the 110 kW Ufa-Yuzhnaya-Naberezhnaya transmission line to the Kustarevskaya substation in the city of Ufa, reconstruction of the Akberdino substation and power transmission for shoreland stabilization engineering works on the banks of the Belaya river in the city of Ufa.

Cosmos Group

One of Russia's leading hotel management companies

The year-on-year decline in revenue and consequent decline in OIBDA and net profit in 3Q 2019 were the result of a high base effect on the back of the World Cup being held in Russia in 2018. The share of revenue accounted for by hotels outside Russia declined from 30.7% to 28.8%.

Average Daily Rate (ADR) across the hotel portfolio in 3Q 2019 declined to RUB 4,400 versus RUB 4,600 a year earlier.

Average occupancy in 3Q 2019 grew by 3.2 p.p. year-on-year to 75.4%. Cosmos was the fastest-growing property, with occupancy up 5.0 p.p. year-on-year to 84.0%.

KEY EVENTS AFTER THE END OF THE REPORTING PERIOD

In October 2019 the modernisation and design refurbishment of the Cosmos hotel complex commenced. Completion of this work is planned by 2023.

CORPORATE

The Corporate segment comprises Sistema and companies that control and manage Sistema's interests in its subsidiaries.

In 3Q 2019 SG&A at the Corporate Centre increased year-on-year from RUB 1.0 billion to RUB 3.5 billion, due primarily to growth in expenses related to asset monetisations. This factor also contributed to an increase in the SG&A/Consolidated Revenue ratio from 0.5% in 3Q 2018 to 1.7% in 3Q 2019.

The Corporate Centre's financial liabilities stood at RUB 203.8 billion as of 30 September 2019.

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For further information, please visit www.sistema.com or contact:

Sistema PJSFC is a publicly traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, high technology, financial services, retail, paper and packaging, agriculture, real estate, tourism and medical services. The company was founded in 1993. Revenue in 2018 was RUB 773.9 bn; total assets equalled RUB 1.5 trn as of 31 December 2018. Sistema's global depositary receipts are listed under the "SSA" ticker on the London Stock Exchange. Sistema's ordinary shares are listed under the "AFKS" ticker on the Moscow Exchange. Website: www.sistema.com.

The Company is not an investment company, and is not and will not be registered as such, under the U.S. Investment Company Act of 1940.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. In addition, there is no assurance that the new contracts entered into by our subsidiaries referenced above will be completed on the terms contained therein or at all. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.

SISTEMA PJSFC AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSSFOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

_______________________________

 Including RUB 21,753 mln of lease rights amortization for 9 months 2019 out of which RUB 21,078 mln relate to lease that would have been classified as operating under previous standards

2 Including RUB 14,171 mln of lease interest expense for 9 months 2019 out of which RUB 13,008 mln relate to lease that would have been classified as operating under previous standards

SISTEMA PJSFC AND SUBSIDIARIES

UNAUDITED CONSOLIDATED statement of financial position

as of sEPTEMBER 30, 2019 AND DECEMBER 31, 2018

 (Amounts in millions of Russian roubles)

SISTEMA PJSFC AND SUBSIDIARIES

UNAUDITED CONSOLIDATED statement of financial position

as of sEPTEMBER 30, 2019 AND DECEMBER 31, 2018 (CONTINUED)

(Amounts in millions of Russian roubles)

SISTEMA PJSFC AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 (Amounts in millions of Russian roubles)

3 Including RUB 14,245 mln of lease interest paid for 9 months 2019 out of which RUB 13,082 mln relate to lease that would have been classified as operating under previous standards

SISTEMA PJSFC AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 (CONTINUED)