OREANDA-NEWS. May 30, 2012. OJSC "Bashkirenergo" (MICEX, RTS: BEGY, ISIN: RU0009044242) - publishes consolidated financial statements for Q1 2012 prepared in accordance with IFRS.

For the purpose to comply with the Russian legislation on March 26, 2012 the Company's Board of Directors had a meeting where the main terms and conditions of OJSC "Bashkirenergo" reorganization were accepted for further approval at the extraordinary General meeting of shareholders which will take place on June 20, 2012.

Shareholders are proposed to make a decision on reorganization of OJSC "Bashkirenergo" in the form of a spin-off resulting in the establishment of two companies: generating company called Open Joint-Stock Company "Bashenergoactiv" (JSC Bashenergoactiv) which will obtain the shares of LLC "Bashkir Generation Company", LLC "Bashkir Heat Distribution Grid", and LLC "CCGT CHPP-5", and power grid company called Joint Stock Company "Bashkirian Power Grid Company" (JSC "BPGC").

Simultaneously with the spin-off, JSC Bashenergoactiv is to be merged with Open Joint Stock Company "INTER RAO UES" (JSC "INTER RAO UES").

In connection with the above matter and in accordance with the rules of IFRS compilation, financial results of the generating sector for Q1 2012 were presented separately as results of the discontinuing operation.

KEY FINANCIAL RESULTS:

- The revenue from continuing operations declined by 8.5% to RUB 2,905 million compared to Q1 2011.

- Operating profit was RUB 631 million, up 38.7% YoY.

- OIBDA from continuing operations was RUB 973 million or 30% higher than similar of the previous year.

- Profit and comprehensive income for 3 months of 2012 decreased by 50% YoY and amounted to RUB 1,363 million mostly due to reduction of profit from the discontinuing operation.

- Profit from continuing operations, showing the result of power grids, grew 58% YoY and reached RUB 537 million in Q1 2012. Profit from discontinuing operation, representing the result of power generation, reduced by 65.5% YoY to 826 mln RUR.

- The Company's debt/OIBDA ratio was at the level of 0.9 as of April 31, 2011.


KEY OPERATING RESULTS:

- OJSC "Bashkirenergo" total power generation reduced by 1% YoY to 6,310.81 mln kWh.

- The capacity factor of OJSC "Bashkirenergo" power stations was at a level of  68.68% (decrease of 0.72 p.p. compared to Q1 2011).

- Heat output of the Company amounted to 9,694.8 thousand Gcal, insignificantly reduces by 0.6% YoY.

- In Q1 2012 the specific consumption of equivalent fuel decreased by 2.8 g/kWh for electricity generation to 306.8 g/kWh, and by 1.3 kg/Gcal for heat output to 140.4 kg/Gcal compared to the similar period of the previous year.

- The transmitted electricity losses in the transmission grids reduced to 1.43% versus 1.54% in Q1 2011, distribution grid losses reduced from 12.01% to 10.99% YoY.

Andrey Makarov, CEO of OJSC "Bashkirenergo" commented the Company's activity in Q1 2012: "The first quarter of 2012 was pretty tough for the power sector, as well as for OJSC "Bashkirenergo". Decrease of prices on the wholesale market for electricity and capacity which started at the beginning of 2012 on the back of measures taken by the government aimed at stabilization of electricity prices brought the Company's financial indicators under pressure. Present situation issues challenge for the Company on improvement of operating and financial efficiency, which the Company meets pretty successful. At the present time OJSC "Bashkirenergo" also keeps working on its reorganization and resolves related issues. The Company stayed vertically-integrated for a long time possessing generating assets, distribution and transmission grids.  Activities carried out on Company's reorganization are already reflected in IFRS report for the 1st quarter. Thus, financial results of the generating sector were represented separately as discontinuing operation. The final decision on the Company's spin-off resulting in the establishment of separate generating and grid businesses, as well on general parameters of the reorganization will be taken by the General Shareholders' Meeting on June 20".