JSC INTER RAO UES releases RAS financial statements for the first quarter of 2013

Revenue from electricity export was 7.2 billion RUB, down 1.7 billion RUB (19.1%) from the first quarter of 2012. The largest reduction of export revenues was from Finland (20.9% by revenue) and Lithuania (25.8% by revenue) due to lower sales profitability.

JSC INTER RAO UES is currently finalizing the transfer of its power generation affiliates to its fully owned subsidiary JSC INTER RAO — Electric Power Plants. Leases of power generation equipment of Kaliningradskaya TPP-2, Severo-Zapadnaya TPP and Sochinskaya TPP were terminated on March 1, 2012. Lease of power generation equipment of Ivanovskiye CPP is scheduled for termination in the fourth quarter of 2013. Therefore, the Profit and Loss Statement of JSC INTER RAO UES for the first quarter of 2012 includes all four subsidiaries (for two and three months of the quarter respectively), while the Profit and Loss Statement for the first quarter of 2013 includes only Ivanovskiye CPP.

At the same time, electricity import in the first quarter of 2013 increased by 0.5 bn KWh to approximately 1 bn KWh compared to similar period last year. These drivers partially offset each other and affected the 1.2 billion RUB (21.8%) reduction of revenues from the sales of electricity and capacity in the Wholesale Electricity Market, and the sales of heat in the first quarter of 2013. Revenue from these sales was 4.3 billion RUB in the first quarter of 2013.

Cost of goods sold was 9.6 billion RUB for the first quarter of 2013, down 2.2 billion RUB (18.6%) from the same period in 2012. Cost of goods sold changed due to the following drivers that partially offset one another: 0.3 billion RUB increase in the cost of imported electricity, and 2.5 billion RUB reduction of electricity, capacity and heat generation costs.

General and administrative expenses changed insignificantly.

Interest payable decreased by 0.1 billion RUB due to debt reduction.

Other income/expenses in the first quarter 2013 was –0.2 billion RUB, primarily driven by increased reserves for accounts receivable in the Wholesale Electricity Market. Income from currency hedge operations was 0.1 billion RUB in the first three months of 2013.

Total assets of JSC INTER RAO UES as of March 31, 2013, reduced by 5.5 billion RUB (1.2%) to 439.2 billion RUB. Primary drivers behind the reduction of total assets included the reduction of long-term accounts receivable, as well as increase in short-term financial investments and reduction of cash which partially offset one another.

Fixed assets reduced by 3.4 billion RUB (0.9%) in the first quarter of 2013 to 365.9 billion RUB at the end of reporting period. Long-term accounts receivable reduced by 3.3 billion RUB (12.3%) to 23.6 billion RUB due to early payments.

Current assets reduced by 2.1 billion RUB (2.8%) in the first quarter of 2013 to 73.2 billion RUB as of March 31, 2013. However, short-term financial investments increased by 1.1 billion RUB (117.3%) to 2.0 billion RUB. The primary driver of this change was the allocation of temporarily free cash to short-term financial investments in commercial banks. Cash and cash equivalents reduced by 3.7 billion RUB (26.5%) to 10.3 due to repayment of promissory notes. These notes were used to facilitate the acquisition of power generation assets from JSC Bashkirenergo. Debt burden reduced by 1.7 billion RUB (12.0%) to 12.5 billion RUB in the first quarter of 2013. The split between long-term debt and short-term debt changed from 77.2% and 22.8% in the beginning of the year to 56.3% and 43.7% at the end of the first quarter of 2013 due to scheduled and early repayment of high-cost debt, and partial conversion of long-term debt into short-term debt.

Total liabilities (excluding loans received) reduced by 3.8 billion RUB (8.2%) from the beginning of the year to 42.6 billion RUB in the end of reporting period. Other liabilities reduced primarily due to 3.5 billion RUB repayment of promissory notes.

Equity and reserves did not change significantly over the reporting period and remained at 384.0 billion RUB.