Poltavaoblenergo Announces 2005 Results

The net revenue of Poltavaoblenergo (POON: BUY) decreased by 6% yoy, to USD 147 mln. Net income was USD 0.53 mln (compared to USD 5 mln net losses in 2004). Concorde Capital: The company has kept its level of electricity losses below the permitted level since 2003, which allowed it to save about USD 3 mln in 2005 on the difference between real electricity losses and those compensated from the tariff. Thus, it looks like POON is still involved in tax optimization activities, creating value alpha, as it has been since 2003 (refer to our Dec. 15, 2005 report).