Several Oblenergos Announce 1Q06 Results.

Several Oblenergos Announce 1Q06 Results.

Recently released revenues and profitability figures for several electricity distribution companies:

    Revenue USD mln              Growth yoy     Net margin  1Q05   1Q06

Cherkassyoblenergo   CHON: N/R        26.53         60%  10%     -6%

Kharkivoblenergo      HAON: BUY       60.13           5%     0%      1%

Lvivoblenergo           LVON: BUY        44.71          25%    -1%     1%

Prikarpatoblenergo   PREN: BUY        25.09          19%    2%       4%

Sevastopolenergo   SMEN: HOLD       11.60         26%    13%    15%

Zakarpatoblenergo ZOEN: SELL         17.89         16%     0%       4%

Source: Energobiznes, company data, Concorde Capital

Concorde Capital: We see profitability improvement for all the companies except for CHON.CHON’s high revenue growth is due to the return of Azot Cherkasy, the largest energy consumer in the region, which used to buy electricity directly from the wholesale market. SMEN’s relatively high margins are due to the preferential tariff policy applied to the companies privatized in 2001 (refer to our Oblenergo report of December 15, 2005).