OREANDA-NEWS. OMZ (Uralmash-Izhora Group) (RTS: OMZZ; LSE: OMZD; OTC: UHMVY) has announced its audited consolidated financial results for 2006 in accordance with Russian Accounting Standards (RAS). According to the company’s financial results OMZ profit more than doubled in comparison with 2005.

According to the press service of OMZ, in 2006 the company’s revenues rose 11% to US$667 million. Net profit reached US$28.6 million, up 250% from 2005.

The company’s business in the SpecStal segment (production of semi-finished metallurgical products for machine building and other sectors) has experienced stable and positive development. Revenues in this business sector rose 28%, reaching US$393.5 million. OMZ is actively developing and investing in its metallurgical business.

Revenues from the production and maintenance of mining equipment reached US$133.6 million. This is 3% more than in 2005.

Despite the positive dynamics overall and also despite expected orders under the Federal Program “Development of Russia’s Nuclear Energy Industrial Complex for 2007-2015”, the completion of existing contracts and lack of growth within the company’s nuclear business had a negative impact on the company’s business in 2006.

In line with its strategy of diversification, OMZ plans to develop production of equipment for the petrochemical industry. The company intends to take a leading position in the market. In 2006 OMZ organized a separate business in this sector at the Izhora production site. Recently the company concluded contracts with such companies as LUKOIL, Rosneft, Ufimsky Oil Processing Plant, LENNIIKHIMMASH and other companies. At the moment OMZ is taking part in tenders for the production of petrochemical equipment for other companies.

Expansion of the portfolio of orders for the production of petrochemical equipment will also generate an increased work load for Izhorskiye Zavody. This will significantly improve the financial and economic situation at Izhorskiye Zavody and will help to develop the OMZ business in general.

One of the key investment projects launched in 2006 was the construction of an advanced heavy-duty DSP-120 electric steel furnace with 120-ton capacity by OMZ SpecStal. Construction of the DSP-120 furnace will be undertaken in 2007.

OMZ’s positive trends and its companies’ financial performance were determined by the continued restructuring in the company and implementation of the program of business optimization aimed at increasing the company’s efficiency. The process of restructuring is being continued this year.

OMZ (Uralmash-Izhora Group) is one of the largest Russian heavy industry enterprises. It specializes in engineering, production, sales and maintenance of equipment and machines for the nuclear power industry, and also in the production of special steels.

OMZ divisions’ facilities are located in Russia (Uralmash and Izhorskiye Zavody) and the Czech Republic (Pilsen Steel and Skoda JS). Currently OMZ is focused on a program related to the optimization of its business processes. The program is aimed at raising the company’s efficiency and investment attractiveness.