Dniproenergo Announces Preliminary 2006 Results

Dniproenergo (DNEN) increased net revenues by 34% to USD 551 mln. The company’s net income tumbled to USD 2.5 mln. Alexander Paraschiy: DNEN’s sales results are 6% lower than we forecasted and its net income is even lower than our forecasts. The debt offsetting process temporarily raises the companies’ affective tax rate, and makes it difficult to predict net income for energy companies in 2006. DNEN’s 2006 “decrease” in net income is also explained by the fact that the company’s net income for 2005 was affected by a USD 16.4 mln additional payment from energy market – without additional payment the company’s 2005 net loss would have been 11.7 mln.