OREANDA-NEWS. On 18 June 2008 OAO Mosenergo issued its unaudited consolidated interim financial statements prepared in accordance with the International Financial Reporting Standards (IFRS) for the three months ended 31 March 2008.

Consolidated interim balance sheet as of 31 March 2008 (unaudited)

For the three months ended 31 March 2008 total assets of Mosenergo Group increased by RR 1,831 million, including increase of non-current assets by RR 5,844 million and decrease current assets by RR 4,013 million.

The increase in the non-current assets mostly resulted from inclusion of the deposit of RR 3,000 million at OAO Sberbank Rossii within other non-current assets. The increase in the non-current assets was also due to the increase of RR 2,934 million in the property, plant and equipment value which was mainly caused by the increase in construction in progress.

The current assets decreased by RR 4,013 million for the reporting period. This decrease resulted from the reduction of held-to-maturity investments due to early repayment of a portion of promissory notes for the amount of RR 7,607 million, and the decrease of RR 7,062 million in other current assets due to repayment of bank deposits for the amount of RR 7,000 million. The change in the value of current assets was also due to cash and cash equivalents being increased for the amount of RR 10,648 million and accounts receivable being increased for the amount of RR 1,569 million.

Equity of Mosenergo Group for the three months ended 31 March 2008 increased by RR 2,005 million as a result of net profit received in the reporting period. The Group’s long-term liabilities for the reporting period grew by RR 10,747 million while the short-term liabilities decreased by RR 10,921 million – primarily resulting from the recognition within long-term borrowings of OAO Mosenergo’s bonds for the amount of RR 10,000 million which were carried within short-term borrowings as of 31 December 2007, in connection with the expiration of the early redemption right. Bonds for the amount of RR 588 million were presented for redemption. The bonds were paid for but not redeemed due to ongoing redemption procedures. The early redemption right was provided to the holders of OAO Mosenergo’s bonds in accordance with the Russian legislation based on the resolution of the extraordinary meeting of shareholders dated 28 December 2007 on the merger of OAO Mosenergo Holding into OAO Mosenergo.

Consolidated interim statement of income for the three months ended 31 March 2008 (unaudited)

The table below presents the unaudited consolidated interim statement of income for the three months ended 31 March 2008. All amounts are presented in million Russian Roubles, unless otherwise stated.

Revenues of Mosenergo Group from operating activities for the first three months of 2008 increased by RR 5,869 million (23%) as compared to the similar period of 2007, including increase of electricity sales by RR 3,287 million (31%) and heating sales - by RR 2,197 million (15%). The revenue growth resulted primarily from the tariff increases as well as from the increase in volumes of electricity and heat sold.

Operating expenses of Mosenergo Group for the reporting period increased by RR 4,540 million (19%) as compared to the similar period of 2007, including increase of fuel expenses by RR 2,898 million (24%), heat transmission fees - by RR 1,026 million (19%), and depreciation of property, plant and equipment - by RR 71 million (4%).

As the growth of revenues from operating activities exceeded the growth of operating expenses, operating profit of Mosenergo Group for the reporting period increased by RR 1,433 million (82%) as compared to the same period of 2007 and amounted to RR 3,171 million.

Finance income of Mosenergo Group for 2007 grew by RR 452 million for the reporting period due to the increase of interest income from held-to-maturity investments.

Net profit of Mosenergo Group increased by RR 1,411 million as compared to the same period of 2007 and amounted to RR 2,005 million.

Consolidated interim statement of cash flows for the three months ended 31 March 2008 (unaudited)

Net positive cash flow generated from operating activities for the reporting period amounted to RR 10,119 million which is RR 8,141 million higher than in the same period of 2007.

Net positive cash flow generated from investing activities for the reporting period amounted to RR 1,570 million which is RR 8,305 million higher than in the same period of 2007. The increase mainly resulted from the cash inflow from redemption of held-to-maturity investments.

The result from financing activities in the reporting period is negative and equals RR (1,041) million. This result was mainly caused by the cash outflow to repurchase treasury ordinary shares in the amount of RR 969 million as well as to repay borrowings.

More detailed information on the IFRS consolidated interim financial statements of Mosenergo Group for the three months ended 31 March 2008 can be found http://www.mosenergo.ru/eng/index.php?id=210.