OREANDA-NEWS . September 4, 2012. OGK-1 Group’s financial statements compiled under international standards and published today include financial indicators of OGK-1 OJSC, its four affiliated service companies and a stake in NVGRES Holding Ltd., which owns 100 % of Nizhnevartovskaya GRES CJSC. This consolidated report of OGK-1 Group (based on IFRS) was produced with due account of the results of the financial and economic performance of Nizhnevartovskaya GRES CJSC accounted based on the equity method. The Group’s share in the company via NVGRES Holding Ltd amounts to 75 % minus one share.

Ratio*

H1 2012

H1 2011

Fluctuation

Fluctuation, %

Revenue

24.8

28.3

- 3.5

- 12.4 %

Operating expenses

28.3

25.7

2.6

10.1 %

Operating profit

-3.5

2.7

- 6.2

Net profit

-1.7

2.9

- 4.6

EBITDA**

3.8

5.1

- 1,3

- 25.5 %

EBITDA margin, %***

15.3 %

18.0 %

-

-

Capital expenditures

4.0

2.4

1.6

66.7 %

Electricity generation (billion kWh)

26.0

27.6

- 1.6

- 5.8 %

June 30 2012

December 31 2011

Total assets

73.9

75.9

-2.0

-2.6 %

Total equity

65.5

67.2

-1.7

-2.5 %

Credits and loans

-

-

-

-

Liquid assets****

9.3

10.8

- 1.5

- 13.9 %

* - In billions RUBunless otherwise stated

** - EBITDA indicator is calculated as follows: Profit/(Loss) for the period before financial income and charges, profit tax, amortization of fixed and intangible assets, depreciation of fixed assets and investments, depreciation of goodwill, bad & doubtful debts and obsolete inventory, shares in profits/(losses) of associated companies and effects of acquisitions, such as how much the fair value of the acquired shares of identified assets and liabilities exceeds the cost of investments and other similar effects.

*** - The EBTIDA margin is calculated as EBITDA/ Revenue,

**** - Liquid assets are calculated as short-term investments + cash.

Consolidated interim statement on aggregate income

In H1 2012, the revenue of OGK-1 Group decreased by RUB 3.5 billion (12.4%) year-on-year and amounted to RUB 24.8 billion.

The reduction in the profit from energy sales was due to a 7.3% decline of the market price in the day-ahead market in the first price zone, and an 5.8% power generation fall, which may already be explained by a major overhaul of the first power unit of Permskaya TPP (800 MW) in 2012.

At the same time, the reported period witnessed a 0.3 billion ruble drop in its revenues from power sales due to the 5.0% price decrease under the competitive selection of capacity in 2012 vs 2011.

The Operating Expenses of the Group grew in 6M12 by 2.6 bln rubles (+10.1%) year-on-year to RUB 28.3 bln. Higher operating expenses were driven by the depreciation of the basic assets and some unfinished facilities, which amounted to RUB 4.9 bln in H1 2012 (17.3% of the aggregate operating expenses).

After the main assets and the new power generating units under construction were assessed for depreciation (as of June 30th, 2012), the recoverable value of the aforementioned facilities at the Kashirskaya GRES was slashed due to electric power price growth rates that had been below the forecasted amounts. This caused the impairment loss of RUB 4.9 bln with regards to the main assets, uncompleted facilities and prepayments that had been allocated to the capital construction of the Kashirskaya GRES branch.

The company’s H1 2012 operations generated RUB 1.4 bln in profits (excluding the losses incurred due to the depreciation of its basic assets and the facilities under construction), as compared to the operating profit of RUB 2.7 bln over the same period last year. Given reduction was caused, in the first place, by revenue decrease of the Group.

OGK-1 saw its 1H12 financial income sink RUB 0.1 billion (-28.6%) year-on-year totaling RUB 0.3 billion due to the fact that less available cash assets had been injected within financial investment programs, which can be explained by the company’s Urengoy GRES investment initiative (the construction of PGU-450 power unit). Considering there were no financial expenses in H1 2012 owing loan portfolio paybacks, the Group’s net financial income went up 13.3% compared to H1 2011.

Excluding the losses incurred due to the depreciation of its basic assets and the facilities under construction at the Kashirskaya GRES, in 1H12 net profit amounted to RUB 3.2 billion versus the RUB 2.9 billion over the same period last year (+10.3%).

Consolidated interim financial statements

The total assets of the Group decreased by RUB 2.0 billion (2.6%) in the first half of 2012 and reached RUB 73.9 billion on June 30, 2012, which was mainly due to the accrual of provisions for the impairment of fixed assets and construction in progress.

Notwithstanding the depreciation of fixed assets and construction in progress, non-current assets decreased slightly (by 2.1%). As of June 30, 2012 the value of non-current assets amounted to RUB 55.8 billion. The change in the value of non-current assets was affected by the growth of its net assets share in jointly-controlled NVGRES Holding Ltd (by 5.7%), which cost RUB 16.6 billion, at the end of the reporting period. At the same time, the value of the other non-current assets dropped, which was due to the partial repayment of long-term bank notes, which the Group receives from its contractors as payment under electricity and power supply agreements.

The dynamics of the current assets as of June 30, 2012 were affected by a decrease of financial investment in the form of deposits over a period of from 3 to 12 months by RUB 3.6 billion, with an increase in the depositing of temporarily free funds for up to 3 months and an increase in cash balances in settlement accounts by RUB 2.1 billion in order to finance its investment program. Current assets decreased slightly to RUB 18.1 billion.

Reserves grew by 18.5% as of June 30, 2012, and amounted to RUB 3.2 billion. This trend in the second quarter of 2012 is attributed to a change in the fuel balance of the Group in favor of the gas component.

Equity showed a slight decrease (by RUB 1.7 billion or 2.5%) to RUB 65.5 billion as of June 30, 2012, which was due to the decrease in retained earnings (by RUB 1.7 billion or 9.3%).

Total liabilities fell by RUB 0.3 billion (3.4%) to RUB 8.4 bln as of June 30. This resulted from the RUB 0.9 billion reduction in the company’s deferred tax liability. At the same time, accounts payable grew by RUB 0.5 billion to RUB 5.0 billion, which was primarily due to specific payment terms that were agreed upon with the general contractor in the power supply contract for the Urengoy GRES project.

OGK-1 has not taken out any loans or borrowed money during the reporting period.

The consolidated IFRS financial statement of JSC OGK-1 for H1 2012 is available on the company’s website.

JSC "First Generation Company of Wholesale Electricity Market" (OGK-1) is a major wholesale thermal power generation company. The installed capacity of power plants of OGK-1 is 9861 MW. OGK-1 generating assets consist of Permskaya TPP, Verkhnetagilskaya TPP, Kashirskaya TPP, Urengoyskaya TPP and Iriklinskaya TPP. Two existing power plants of Nizhnevartovskaya TPP contributed to the authorized capital of CJSC Nizhnevartovskaya GRES whose shares are owned NVGRES HOLDING LIMITED (NHL). 75% minus 1 share of the authorized capital of NHL belong to JSC OGK-1 and 25% plus one share to TNK-BP.

The authorized capital of JSC OGK-1 is 37,620,353,700.8361 rubles and is divided into 65,451,744,495 ordinary registered shares of a nominal value of 0.57478 rubles each. As of June 30, 2012 78.01% of the ordinary shares owned by the Group "INTER RAO UES" (As of 31 December 2011 - 75.02%).

Ordinary JSC OGK-1 shares are traded on the RTS Stock Exchange, and MICEX with the ticker OGKA (quotation list "A" level 1).