Financial Results of the Holding Company


			THE COMPANY'S FINANCE

	Financial Results of the Holding Company In 2002, the Holding Company’s net profit grew by 2.1 times compared to last year.
	Based on preliminary results for 2002, the financial and business operations of RAO "UES of Russia" Holding Company are characterized by the following dynamics of the main financial indicators defined in the Russian Accounting Standards (RAS):
	Key financial figures of the Holding Company, RUB million


Indicators	2002	2001	Growth rate, %



Net revenues from sales of goods, products, work and services	564,682.6	453,579.6	124.5

Cost of sold goods, etc. (including commercial and management expenses)	495,180.4	380,512.0	130.1

Costs per RUB 1 of sold products, kopecks	87.7	83.9	104.5

Profit (loss) from sales	69,502.2	73,067.6	95.1

Profitability of sales, %	12.3	16.1	76.3

Other operating income and expenses (net)	-18,828.7	-7,238.7	260.1

Profit (loss) from financial and business activities	50,673.5	65,828.9	77.0

Profitability of financial and business activities, %	9.0	14.5	62.1

Extraordinary items (income and expense, net)	4,042.3	-19,683.1

Profit before taxes	54,715.8	46,145.8	118.6

Profit tax and other mandatory payments	25,260.1	32,143.3	78.6

Net (undistributed) profit	29,455.7	14,002.5	210.4

Net profit margin, kopecks per RUB 1 of revenue	5.2	3.1	167.7

In the year under review, the revenue from sales of products (work, services) throughout RAO "UES of Russia" Holding Company reached RUB 564,682.6 million, an increase of RUB 111,103.0 million, or 24.5%, compared to 2001.

As a result of a decline in the cost efficiency of the Holding Company's primary products, work, and services, the sales profitability dropped from 16.1 kopecks per RUB 1 of sale revenues in 2001 to 12.3 kopecks per RUB 1 of revenues in the period under review.

The profitability of electricity sales in the domestic market fell from 16% to 11%, whereas the profitability of electricity exports dropped from 176% to 79%. The profitability of services related to administration of UES operations dropped from 460% in 2001 to 343% in the period under review. The profitability of heat sales dropped from 1% to -3%.

The sales revenue in the reporting year amounted to RUB 68,849.9 million, including RUB 32,371.1 in revenues generated by the Company and its branches.

The results of other operations and extraordinary items in the period under review compared to last year allow to conclude:

increase in revenues from short-term financial investments by 4.4 times (from RUB 159.4 million to RUB 696.1 million) and income from investments by 1.8 times (from RUB 1,228.6 million to RUB 2,163.0 million);
increase of interest on loans more than 4 times (from RUB 2,228.2 million to RUB 8,935.4 million);
twofold increase in losses from other operating activities;
received profit from extraordinary items of RUB 4,042.3 million;

The net profit margin of the Holding Company RAO "UES of Russia" in the period under review was 5.2 kopecks per RUB1 of sale revenues, which is 2.1 kopecks more than last year.

In 2002, the Holding Company of RAO "UES of Russia" received a net profit of RUB 29,455.7 million, a 2.1 times increase compared to 2001.

The principal result of the Holding Company's efforts to address the issue of payments owed to the budgets of all levels is full cash settlement of tax charges and payment by the Holding Company's enterprises of taxes and levies in arrears in accordance with the plans for debt restructuring, which is carried out under Resolutions of the Russian Government No. 1002 of 3 September 1999 and No. 699 of 1 October 2001.

In 2002, payments to the budgets of all levels increased by 19.2% to RUB 87,063.6 million compared to RUB 73,060.2 million in 2001, with RUB 48,494.4 million paid to the federal budget (or 105.7% of last year's amount of RUB 45,889.4 million), and payments to the consolidated budgets of the districts and regions of the Russian Federation reaching RUB 38,569.2 million, or 142.0% of last year's amount (RUB 27,170.8 in 2001).

In 2002, the enterprises of RAO "UES of Russia" Holding Company paid RUB 8,646.1 million in taxes, fines and penalties to the federal budgets, or 2.6 times more than the amount scheduled for payment under the debt restructuring arrangements.