TGC-1 announces its 1H 2010 unaudited IFRS results

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.
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».