OREANDA-NEWS. May 4, 2012. Federal Grid Company of Unified Energy System (“Federal Grid Company” or "the Company”) (MICEX-RTS, LSE: FEES), announces its financial results for Q1 2012 in accordance with Russian Accounting Standards (RAS).

These results exclude the accounts of Federal Grid Company's subsidiaries and affiliated companies, which operate as independent legal entities.

Key Financials:

Revenue of RUB 33,965 million

EBITDA of RUB 22,284 million

Gross profit of RUB 9,168 million

Profit before tax of RUB 5,797 million

Net profit of RUB 2,910 million

Adjusted net profit* of RUB 5,206 million

*excluding losses from revaluation of assets and adjustments to doubtful debts provisions and securities impairments.

The Company's revenue for Q1 2012 decreased by 7% year on year (y-o-y) to RUB 33,965 million.

This was primarily due to a decrease in the tariff for electricity transmission services compared to Q1 2011 in connection with the smoothing of Federal Grid’s tariff revenue introduced on 1 April 2011.

Operating costs including administrative expenses for Q1 2012 increased by 38% y-o-y to RUB 26,609 million. This was primarily due to the fact that depreciation charges increased by RUB 5,059 million (53% y-o-y) in connection with the commissioning of new facilities, as well as to an increase in serviced equipment.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased in Q1 2012 by 26% y-o-y to RUB 22,284 million. The decline in EBITDA was primarily due to a lower profit before tax for the period, which was the result of the decreased tariff for electricity transmission services.

Federal Grid Company's other income in Q1 2012 decreased by 5.1x compared to Q1 2011 and equalled RUB 21,362 million, primarily due to the effect from the exchange of shares in generating companies for shares in INTER RAO UES that was reflected in Q1 2011.

The Company's other costs in Q1 2012 decreased by 4.4x y-o-y to RUB 23,943 million, also due to the Q1 2011 accounting effect from the transaction with INTER RAO UES.

Federal Grid’s net profit for Q1 2012 was RUB 2,910 million. The Company’s corrected net profit (excluding the effect from creation and recovery of loan loss provisions) was RUB 5,206 million.

Balance Sheet as of 31 March 2012

Federal Grid Company's total assets increased by 1%, or RUB 10,991 million, during the reporting period and reached RUB 1,048,484 million at the end of Q1 2012. This includes non-current assets of RUB 935,536 million and current assets of RUB 112,948 million.

Non-current assets grew by RUB 16,035 million, or 2%, during Q1 2012. This was primarily due to an increase in construction in progress that is part of the Company's investment programme.

Current assets decreased by RUB 5,044 million, or 4%, in the first three months of 2012. This was due to a decrease in short-term financial investments resulting from the redemption of promissory notes for financing of the Company’s investment programme.

Federal Grid Company's long-term debt (loans and borrowings) amounted to RUB 130,000 million as of 31 March 2012.

The Company's short-term obligations increased by RUB 6,294 million, or 14%. This was due mainly to an increase in accounts payable to suppliers and contractors, as well as greater advances received from counterparties.