TGC-1 releases 9M 2010 RAS results

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