TGC-1 releases 9M 2010 RAS results

JSC TGC-1 releases its 3^rd Quarter and 9 months 2010 financial results according to Russian accounting standards.

The revenue in January-September increased 36.5% compared to the same period of 2009 and totaled RUR 34,464 mn. The revenue from electricity and capacity sales was up 47.6% to RUR 21,634 mn, revenue from heat sales – 25.9% to RUR 12,406 mn. The increase in electricity and capacity sales in explained by liberalization of the sector, and hike in electricity useful output.

CoGS was up 37.9% to RUR 31,126 mn. The major factors contributing to the change in costs were:

• increase of fuel costs as a result of higher electricity and heat output, as well as one-off rather than quarterly (as was the case in 2009) gas prices hike;
• increase of purchases of electricity – majorly to fulfill unregulated electricity and capacity contracts and export sales;

As a result, operating profit in January-September 2010 totaled RUR 3,338 mn (+24.6%), net profit – RUR 2,023 mn (-14.6%). The decrease of the bottom-line is due to the following factors:

• higher CoGS growth vs. revenue in 3^rd quarter as a result of seasonal decrease of heat output and, as a result, decrease of electricity output in cogeneration mode;
• higher interest payments to service the outstanding debt;
• decrease of other income.

The table below summarizes the key RAS financials in Jan-Sep 2009-2010:

TGC-1 will disclose consolidated unaudited IFRS accounts for the 3^rd Quarter and 9 months 2010 in late November.

Full operational results can be found on corporate website in Reports section.