Prykarpatoblenergo Reports Preliminary 2007 Results

Electricity distribution company Prykarpatoblenergo (PREN: HOLD) reported USD 107.7 mln in net revenue for FY07 (+16% yoy). EBITDA grew proportionally to USD 9.1 mln (margin of 8.5%). Net income increased 48% yoy to USD 0.97 mln (margin of 0.9%). Alexander Paraschiy: The company’s top line is 4% below our forecast. EBITDA is 14% (USD 1.5 mln) below our forecast: the key reason is an unexpected sevenfold yoy increase in “other operating expenses” in the last quarter of 2007. We believe this spike is one-off, thus we do not change our forecast for 2008. We maintain our HOLD recommendation on the stock.