Kievenergo To Pay Dividends For 2005.

Kievenergo (KIEN: BUY) has announced its 2005 results: net revenue USD 376 mln (16.5% growth yoy), reported net income USD 1.87 mln (28% growth yoy). The company’s AGM voted to direct 40% of 2005’s net income and USD 0.2 mln of the company’s retained earnings from 2004 toward paying dividends (DPS of USD 0.0085, div. yield 0.6%). The Ex-dividend date is May 2, 2006. Dividends will be paid between May 1 and Dec. 1, 2005. Concorde Capital: The company’s net income is lower than we expected due to high effective tax rate, however it was still 66% higher than KIEN’s management forecasted. We expect the management’s net income forecast for 2006 (USD 1.2 mln) to be over-performed, as KIEN can benefit from changes in its business profile and from the increase in heating tariffs (refer to our Mar 7 report for more details). Note that the company uses a “stable” dividend policy: for the last four years KIEN’s dividends per share have grown exactly by 0.001 UAH (from 0.040 in 2002 to 0.043 in 2005).