TGC-1 publishes its interim abbreviated unaudited consolidated Financial Statements

28.08.2012

JSC TGC-1 releases its interim abbreviated unaudited consolidated Financial Statements for the 6 months period, ended June 30, 2012 prepared in accordance with International Financial Reporting Standards (IFRS).

Consolidated Statement of Comprehensive Income Figures (mn RUR)

6M 2011

6M 2012

Revenue

34,327

32,038

Operating expenses

(27,356)

(27,086)

Operating profit

6,971

4,951

EBITDA*

9,133

7,622

Profit

5,827

3,179

 * For business planning purposes EBITDA is calculated as Operating profit + Depreciation of PP&E and intangible assets.

In the 6M 2012 the consolidated revenue of OJSC TGC-1 amounted to RUR 32,038 mn (-7% year-on-year). Reduction in the revenue for the 1st half of 2012 was caused by the following:

·  continuing downside trend in electricity prices dynamics on the day-ahead market;

·   withdrawal of the status of “forced generation” from eight power plans of the Company in 2012, which resulted in a decline of power and electricity sales prices for the plants;

·  low water content;

·  reduction in the volume of exported electricity due to unfavorable economic environment at the foreign market.

In the 6M 2012 operating expenses amounted to RUR 27,086 mn and decreased by 1%year-on-year.

The main causes of the operating expenses change are the following:

• increase in the CHPs output, which has resulted in additional fuel expences;

• increase of depreciation of property, plant and equipment due to new equipment commissioning;

• increased costs of repairs and maintenance caused by the increase of repairs at JSC Heating network of St. Petersburg and expensive maintenance and service of the new CCGT units;

• Lower spending on electricity and heat purchases, on the account of lower prices at the day-ahead market and balancing market, as well as substantial reduction of purchases volume for the electricity export support.

 Operating profit for the 6M 2012 decreased by 29% year-on-year, to RUR 4,951mn, EBITDA – by 17%, to RUR 7,622mn.

The increase of the finance costs in the 1H 2012 in financial statements resulted from the different allocation of interest expenses, as in 2011 considerable part of the accrued interest was capitalized to the investment projects (construction in progress).

According to the financial statements under IFRS for the 6 months, ended June 30, 2012, profit decreased by 45% and amounted to RUR 3,179mn.

Full JSC “TGC-1” 6M 2012 results under IFRS can be found on the corporate website in the “Reports” section.