Zhytomyroblenergo discloses FY07 results

Electricity distribution company Zhytomyroblenergo (ZHEN: HOLD) yesterday published its FY07 financials: net revenue of USD 105.4 mln (+21% yoy, 2% below our forecast); EBITDA of USD 12.0 mln (down 4% yoy, 15% above our forecast) and net income of USD 0.04 mln (93 times drop yoy). Alexander Paraschiy: Private electricity distribution companies, like Zhytomyroblenergo, increased operating profit the least in the sector in 2007: these companies had a smaller increase in tariffs than state-controlled Oblenergos (refer to our October 2007 report). The drop in Zhytomyroblenergo’s net income is attributed to a revaluation of the company’s fixed assets in 2Q07, which led to to rise in D&A expenses by USD 6.0 mln. Without the revaluation, 2007 net income would have been close to USD 4.5 mln.