JSC TGC-1 releases 2Q financial results according to Russian accounting standards.

The revenue in January-June increases 29% as compared to the same period of 2009 and totaled RUR 25,068 mn. The revenue from electricity and capacity sales was up 36% to RUR 13,678 mn, revenue from heat sales increased 25% to RUR 11,087 mn. The increase in electricity and capacity sales is explained by liberalization of the sector (e.g. unregulated sales grew 124% y-o-y), as well as by hike in electricity useful output by 3% on the back of colder winter. Lower temperatures also were the main driver of heat sales.

Costs also increased 29% to RUR 20,968 mn mainly on the back of fuel costs growth and higher purchases of power. Fuel expenses growth is associated with increase of electricity and heat output, as well as with one-off rather than quarterly (as was the case in 2009) gas prices hike. Increase of purchases of electricity goes along with widening of liberalization: the major part of purchases is made to fulfill unregulated electricity and capacity contracts and export.

As a result, operating profit totaled RUR 4,099 mn (+28%), while net profit for the period was up 39% to RUR 2,847 mn.

The table below summarizes the key RAS financials in Jan-Jun 2009-2010: