OREANDA-NEWS. September 12, 2012. Bashkirenergo OJSC (MICEX, RTS: BEGY, ISIN: RU0009044242) publishes consolidated financial statements for 6M 2012 prepared in accordance with IFRS.

For the purpose of complying with Russian legislation, on June 27, 2012 the Extraordinary General Meeting of Shareholders of Bashkirenergo OJSC made a decision concerning the company's reorganization in the form of a spin-off, resulting in the establishment of two companies: a generating company called Bashenergoactiv Open Joint Stock Company (Bashenergoactiv JSC) - which will obtain the shares of Bashkir Generation Company LLC, Bashkir Heat Distribution Grid LLC, and CCGT CHPP-5 LLC - and a power grid company called Bashkirian Power Grid Company Joint Stock Company (BPGC JSC). As a result of this reorganization, all of the property, rights and duties of Bashkirenergo OJSC will be transferred to Bashenergoactiv JSC and BPGC JSC in accordance with the dividing balance sheet. All organizational arrangements and corporate actions related to the company's reorganization should be executed by the end of 2012.

In connection with this development and in accordance with the rules of IFRS compilation, the financial results of the generating sector for the first six months of 2012 were presented separately as a result of the discontinuing operation.

KEY FINANCIAL RESULTS FOR THE FIRST SIX MONTHS OF 2012:

- The revenue from continuing operations (without accounting for the results of the generating sector) for 6M 2012 declined by 4.88% compared to the similar period of the previous year, and amounted to RUB 5,672 million. The revenue for Q2 2012 amounted to RUB 2,767 million, down 0.65% QoQ.

- Operating profit (without accounting for the results of the generating sector) for 6M 2012 grew 31.76% as compared to 6M 2011, reaching RUB 1,539 million. Q2 2012 operating profit increased by 27.35% YoY to RUB 908 million.

- OIBDA from continuing operations (without accounting for the results of the generating sector) for 6M 2012 was RUB 2,218 million, or 26% higher than the similar figure of the previous year. The Q2 2012 OIBDA amounted to RUB 1,245 million, up 23% YoY.

- Profit from continuing operations (without accounting for the results of the generating sector) for 6M 2012 grew 30% versus 6M 2011, reaching RUB 1,216 million. At the same time, profit during Q2 2012 amounted to RUB.

- The OIBDA margin (without accounting for the results of the generating sector) for 6M 2012 grew from 30% to39%YoY.

- Profit and comprehensive income,representing the financial results of both the generating and grid segments for 6M 2012, decreased by 49% YoY, amounting to RUB 1,706 million.

- As of June 30, 2012, the financial debt of the generating business amounted to RUB 2,268 mln. The total of the company'sdebt/OIBDA ratio was 0.6.

KEY OPERATING RESULTS FOR THE FIRST SIX MONTHS OF 2012:

- The total power generation of Bashkirenergo OJSC for 6M 2012 fell by 4% compared with the similar figure of the previous year, to 11,012 mln kWh.

- The capacity factor of Bashkirenergo OJSC's power stations was 59.49% (a decrease of 2.52 p.p. compared to 6M 2011).

- The heat output of the company amounted to 13,217 thousand Gcal for 6M 2012, down by 5.3% YoY.

- The specific consumption of equivalent fuel for 6M 2012 decreased by 0.1 g/kWh for electricity generation to 316.6 g/kWh, and by 1 kg/Gcal for heat output to 141.8 kg/Gcal, compared to the similar period of the previous year.

- The transmitted electricity losses in the transmission grids fell to 1.46% versus 1.49% for 6M 2012, while distribution grid losses were reduced from 9.47% to 8.45% YoY.

Commenting on the company's results for the first six months and the second quarter of 2012, Andrey Makarov, the General Director of Bashkirenergo OJSC, noted:

The first half of 2012 was a pretty tough period for the power sector, which faced a number of unfavorable factors. A postponed tariff escalation from January to June, a decrease in prices on the wholesale market, a warmer winter and early termination of the heating season in some regions brought the indicators of the sector and Bashkirenergo OJSC in particular under pressure. Nevertheless, the company continues to work on improvements to its business efficiency. The company terminated servicing the rented heat network and other equipment located in Ufa, Sterlimak and Kumertau during the second quarter. The implementation of projects aimed at modernization and an improvement in the efficiency of the company's assets continued, as well as work on such common sector issues as the collection of debts for heat and hot water. At the same time, Bashkirenergo OJSC expended efforts to settle corporate issues related to the reorganization for the purpose of complying with legal requirements, as well as the preparation and holding of the general meetings of shareholders. The company has managed to carry out its assigned tasks. The Annual General Meeting of Shareholders took place on June 20, at which time the company's annual report was approved and new membership to the Board of Directors was elected. Also, on July 27 the Extraordinary General Meeting of Shareholders made a decision concerning the company's reorganization. Activities carried out in regards to the company's reorganization are already reflected in the IFRS report for the first six months of 2012. As a result, the financial results of the generating sector are represented separately as a discontinuing operation.