OREANDA-NEWS. Federal Grid Company of Unified Energy System ("Federal Grid Company" or "the Company") (Moscow Exchange, LSE: FEES), part of the Russian Grids Group of companies and the operator of Russia's Unified National Energy Grid (“UNEG”), today announces its financial results for H1 2014 under Russian Accounting Standards (RAS).

The Company's RAS accounts do not consolidate the results of Federal Grid Company subsidiaries or dependent companies that operate as independent legal entities.

Key financial indicators:

Revenue of RUB 83,724 million;

Cost of sales and SG&A of RUB 71,048 million;

Adjusted EBITDA* of RUB 53,679 million;

Sales profit of RUB 12,676 million;

Adjusted net profit* of RUB 7,402 million.

excluding the establishment and recovery of a provision for doubtful debt

Federal Grid Company's revenue for H1 2014 increased by 11.9% year-on year to RUB 83,724 million. This was mainly attributable to revenue growth from electricity transmission on the UNEG (in connection with the 9.4% indexation of tariffs from 1 July 2013) and from technical connection services (due to the completion of technical connection service contracts for large customers: OJSC Fortum, OJSC Kaspiiskiy TK-R, OJSC Pervouralskiy Novotrubniy Zavod, and OJSC INTER RAO-Electrogeneration).

The Company's total costs for the reporting period increased by 9.5% year-on-year due to higher non-controllable costs (depreciation and property tax), which was compensated for by a decline in controllable costs.

Administrative expenses for H1 2014 (excluding an increase in property tax due to the phased repeal of the property tax concession for electricity transmission lines that took effect from 1 January 2013, in accordance with Federal Law #202-FZ “On Changes to the Second Part of the Russian Federation Tax Code” dated 29 November 2012) declined by 13% year-on-year, primarily due to the Company's efforts to reduce administrative and management costs.

Operating costs, excluding administrative expenses, also declined by 3.3% year-on-year (excluding depreciation), despite an increase in the number of UNEG facilities being serviced in connection with implementation of the Company's investment program.

Adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) increased by RUB 7,018 million, or 15%, year-on-year and reached RUB 53,679 million for H1 2014, primarily as a result of higher operating profit and Federal Grid Company's successful cost optimization efforts.

Federal Grid Company's RAS net income for H1 2014 amounted to RUB 1,230 million. Adjusted net profit supported by cash flows (adjusted for the balance of charging/recovery of provision for doubtful debt) amounted to RUB 7,402 million for H1 2014.