13 November 2008

OAO “IDGC OF URALS”: 3Q 2008 RESULTS

ОАО «IDGC of Urals» (RTS and MICEX: MRKU), united operating company of the Urals region exercising control over distributive grid complexes in Sverdlovsk, Chelyabinsk and Perm regions, Russia reports on 9M 2008 financial results under Russian Accounting Standards (RAS).

Table 1. 9M 2008 Consolidated financial result of the merged company, USD thous.* ^[1]

* Here and henceforth currency conversions are based on average exchange rates: 9M 2008 - RUR 24.04.

^[1] Here and henceforth financial and economic indicators of the company is calculated under RAS financial statements since the merger (May 01, 2008)

^[2] EBITDA is calculated as follows: Operating profit + depreciation and amortization.

Table 2. 9M 2008 Operating results:

9M key events:

Full version of accounting statements can be found on our corporate web-site at "Financials" section (www.mrsk-ural.ru).

For additional information on the Company, please, use Company's corporate web-site (www.mrsk-ural.ru) as well as Complex Information Disclosure System (www.skrin.ru), Interfax (www.interfax.ru) and AKM (www.akm.ru).

FINANCIAL REVIEW

Revenue and Expenses review

On the whole, total Company revenues as of 3Q 2008 reached US$ 601.9 mln. Overall revenue structure of the Company as of 3Q 2008 is as follows:

Table 2. 9M 2008 Revenue structure, US$ thous.

Revenues from energy transmission make a large contribution to the revenues structure of the Company. As of 3Q 2008, the revenues totaled US$ 554.8 mln. (92.2% of the revenues).

Revenues from technological connection, as of 9M 2008, reached US$ 13.3 comprising 2.2% of the total revenues.

Other revenues from main activities reached US$ 18.9 mln. (3.1%), non-core revenues being US$ 152.7 thous.

Other revenues as of 9M 2008 totaled US$ 152.7 thous (2.5%).

Operating expenses of the Company, as of 3Q 2008, totaled US$ 538.9 mln. Overall structure of the merged Company is as follows:

Table 3. Company's expense structure as of 9M 2008, US$ thous.

Large items are as follows:

• Payments to other distributive companies which, as of 9M 2008, totaled US$ 130.6 mln. (24.2% of overall expenses);
• Payments to ОАО "FSK UES" which reached US$ 116.8 mln (21.7% of overall expenses);
• Purchased energy for loss compensation which totaled US$ 82.5 (15.3%);
• Wages and other social benefits which reached US$ 70.9 (13.2%).

Other expenses equaled US$ 89.1 mln. (16.5%) and comprise transport services, rental lease and maintenance services.

Debt review

Table 4. Credit Portfolio of the Company as of 3Q 2008,US$ thous.

Table 5. Company's debt as of 3Q 2008.

The Company's net debt, as of the reported period, increased by 16.5% and totaled US$ 127.7 mln., which characterizes traditional increase for utilities in 3Q investment financing.

On the whole, the Company has a moderate debt level: as of 3Q 2008 13.6% of assets were financed by loans and borrowings, all liabilities contributed 32% to total balance.

OPERATING REVIEW

Total length of aerial lines (in chains) which are in the balance of ОАО "IDGC of Urals", as of October 01, 2008 totaled US$ 120 129 km. Aerial line structure (on voltage class) by the Company's subsidiaries is as follows:

Table 5. Total length of the aerial lines (in chains), km. (as of 01.10.2008).

Overall length of the cable lines, as of 01.10.2008, totaled 4 892 km. Voltage class structure by our subsidiaries is as follows:

Table 6. Overall length of cable lines, km (as of 01.10.2008).

The quantity of transformer substation PS-35/110-220 kW, as of 01.10.2008, reached 986, installed capacity of the transformer equals 19 690.9 MVA. The quantity and installed capacity structure by our subsidiaries is as follows:

Table 7. The quantity and installed capacity of transformer substations PS-35/110-220 kW (as of 01.10.2008).

Overall quantity of transformer substations TP-6-20/0,4 kW, as of 01.10.2008, totaled 28 049, installed capacity equaled 7 164 MVA. The quantity and installed capacity structure by our subsidiaries is as follows:

Table 8. Quantity and installed capacity of the transformer substations TP-6-20/0.4 kW (as of 01.10.2008)

Total productive supply of the Company, as of 3Q 2008, reached 19 434.1 mln. kWh. Energy losses in 3Q 2008 totaled 1 082.1 mln. kWh which equals 5.3% of overall electric supply.

Table 9. Energy supply and losses as of 3Q 2008, thous. kWh.