Kharkiv CHPP #5 Announces 2005 Results

Net income of Kharkiv Combined Heat And Power Plant #5 amounted to USD 11.3 mln (46% growth yoy), net revenue USD 85.6 mln (1.5% growth yoy).

Khrakiv CHPP #5 Results

                                   2002      2003    2004     2005

Revenue, USD mln        47.4        56.4     80.9     85.6

Net Margin                  -1.0%       0.5%  9.2%  13.2%

Source: company data

The company is not public, as moratorium for privatization of combined energy producers holds in Ukraine.

Concorde Capital: Kharkiv CHPP #5participates in the capacity tender market since April 2003. At this market, all the participants sell electricity at one marginal price, the price of the most expensive producer. Also, they obtain premium to their tariffs for taking part in regulation of Ukrainian capacity balance. With growing tariffs at the market, margins of Kharkiv CHPP #5 improved significantly during 2004 and 2005. Note that CHPPs of Kievenergo (KIEN: BUY) entered capacity tender market two months ago, and this should yield similar results for the company’s profits.