TGC-1 announces its 1H 2010 unaudited IFRS results

01.09.2010

TGC-1 releases its unaudited half yearly consolidated report under IFRS for the period ended June 30, 2010.

In 1H 2010, consolidated revenue increases by 28% to RUR 27,203 nm. The increase is associated with a number of factors:

  • increase of heat generation (+8.5%) and, consequently, revenue from heat sales (+24%) as a result of colder months than last year in the 1Q 2009;
  • expansion of the unregulated market as of January 1, 2010 (from 50% to 60% of sales) and higher spot prices;
  • effective operations on the market, namely, the conclusion of unregulated electricity+capacity contracts. For example, revenue from electricity+capacity contracts shot up more than two-fold to almost RUR 1.9 bn.

Operating expenses were up 29% - to RUR 23,250 mn, in particular, as a result of:

  • higher fuel expenses associated with the increase of electricity and heat generation and one-off (and not quarterly like in 2009) gas price hike, as well as due to more expensive fuel oil prices which is the main fuel of Murmanskaya CHPP;
  • increase of electricity and capacity purchases on the wholesale market in order to fulfill the obligations of mainly export sales and higher purchasing market prices;
  • seasonal increase in 2Q in maintenance expenses.

Operating profit was up 22% to RUR 3,952 mn. Profit for the period was RUR 2,823 mn, which is 13.6% more than last year.

The table below summarizes the key financials of TGC-1 for the 1H 2010:

mn RUR

1H 2010

1H 2009

Revenue

27,203.2

21,245.6

Electricity sales

10,058.0

6,878.6

Capacity sales

3,657.3

3,229.3

Heat sales

13,200.0

10,616.8

Other sales

287.9

521.0

Operating expenses, net

23,250.4

18,005.7

Operating profit

3,952.8

3,239.9

Profit before taxes

3,463.3

3,130.5

EBITDA

5,576.6

4,747.7

Profit for the period

2,823.3

2,485.3

EBITDA margin, %

20.5%

22.3%

Net margin, %

10.4%

11.7%

Chairman of the Management Board, General Director Boris Vainzikher: «I think the results of the Company for the six months of 2010 are positive. In this period, especially in 1Q, we managed to create a good “safety cushion” in terms of earnings for the whole year. Besides, good financials and improving terms of borrowing let us increase the investment plan for FY2010 by RUR 2 bn while complying to debt/EBITDA ratio set by the Board. So, in 2010 TGC-1 should invest as much as RUR 17.9 bn in its development. Foremost, it will let us expedite the priority CAPEX projects».

The full 1H 2010 IFRS report can be found here: http://tgc1.ru/en/ir/