TGC-1 Reported Its Preliminary H1 2009 Results

TGC-1 has reported its production and financial results for the first half 2009 under the Russian Accounting Standards (RAS).

January-June 2009 electricity production, both from the CHPPs and HEPPs of TGC-1, totalled 14,165 million kWh, almost equalling the result achieved in the comparable period last year. Heat output stood at 14,293 thousand GCal, up 6.1% compared to the H1 2008.

Let us remind that the Company operates 55 power plants with a total electric capacity of 6,275.45MW and a total heat capacity of 13,437 GCal per hour. Hydroelectric power plants account for 50% of the aggregate capacity of the TGC-1’s plants.

Company’s H1 2009 revenue reached RUR19,406.7 million, a 3.9% increase compared to the business plan target and a 20.4% increase compared to the figure reported for the comparable period in 2008. This increase in total revenue was the result of a rise in receipts generated through electricity market deregulation and electricity sales at non-regulated prices.

Production costs attributable to net costs are estimated at RUR16,210.1 million, down 8% compared to the plan. This decrease, recorded in the reporting period, may be ascribed to the replacement of costly generation at CHPPs by more efficient generation at hydroelectric power plants, resulting in considerable fuel saving.

Moreover, the Company generated sufficient cash flow to fully finance its investment programme and meet repair and maintenance programme targets. In the H1 2009, a total of RUR870 million was allocated to repair (against RUR806 million from January to June 2008). Investment programme financing is estimated at RUR7,959 million.

As a result, the Company increased its operating profit by 3.9 times to RUR3,196.7 million. Profit before taxes was estimated at RUR2,735.9 million against RUR456.2 million in 2008. TGC-1 reported a net profit of RUR2,067.4 million for the reporting period, representing a 15 times increase compared with the last year figure.

“The H1 results allow us to be confident that we will meet the targets set in the business plan,” said Boris Vainzikher, General Director. “And the repair & maintenance and investment programmes will be implemented in accordance with the goals set with regard to the volume of work.”

The above figures do not include the results of Murmanskaya CHPP.