OAO Pharmacy Chain 36.6 is announcing its financial results for nine months in 2005 in accordance with the International Financial Reporting Standards (IFRS).

Pharmacy Chain 36.6 continues its dynamic expansion in Russia’s regions and is maintaining growth rates of pharmacies' sales at 53 percent. In Q3 2005 Pharmacy Chain 36.6 increased the number of pharmacies by 53, including 32 new pharmacies that were opened organically and five pharmacies that were rebranded. Following the results for these nine months, the Company’s high growth rates have led to a predicted net loss of $5 million.

Sales

 - Consolidated sales for the nine months of 2005 amounted to $209 million. This amount exceeds the indices of the same period last year by 44.4 percent and is comparable to the consolidated sales amount for all of 2004.

 - Sales in the pharmacies segment reached $141.1 million, which increased by 53.2 percent in comparison to the same nine months in 2004 and exceeded by 5 percent the sales for the whole of 2004.

 - After the nine months in 2005 Veropharm's sales have increased by 31.4 percent in comparison to the same period in 2004 and are equal to $54.4 million. The significant growth is first of all the result of product line outreach and the large volume of new medicine distribution.

Profits

 - Gross margin in the retail segment has decreased to 32.9 percent in comparison to the same period in 2004 due to ever-increasing sales in the regions, where the share of medical sales is larger. Veropharm's gross margin increased to 59.2 percent. Consolidated gross profit increased by 45.2 percent to $80.6 million.

 - In terms of EBITDA, the margin in retail segment has decreased to 1.5 percent. The reasons are the establishment of a large number of new pharmacies in the regions and seasonality, which is usual in the third quarter.

 - Veropharm's EBITDA increased by 74.6 percent and reached 16.3 million. It is the first time Veropharm has managed to overcome the seasonality effect, which is traditionally negative for financial results in the third quarter.

 - Consolidated net loss amounted to $5.1 million.

Investments and other indicators

 - Pharmacy Chain 36.6’s investments over the nine months of 2005 totalled $11.6 million. The pharmacies segment continues developing not only through opening of new pharmacies but also through acquisitions in the regions. In the third quarter the Company acquired several pharmacy chains in St. Petersburg, Samara and Sarov (the Nizhniy Novgorod Region).

 - As of September 30, 2005, Pharmacy Chain 36.6’s total debt was $118.5 million.

Brand and Product Portfolio

 - In September 2005, Pharmacy Chain 36.6 launched a TV advertising campaign in order to raise the profile of the 36.6 brand. The advertising campaign is also to speed up sales growth in the chain’s new pharmacies in the regions. The campaign covers 12 cities and will continue to the end of the year.

 - In July Pharmacy Chain 36.6 started manufacturing and selling its private label products. The project is being implemented successfully. The chain’s pharmacies offer 22 products under the 36.6 brand and the Company plans to increase the number to 150 in 2006.

Comments:

Artyom Bektemirov, General Director:

«In the third quarter we managed to keep up the high growth rate and on average opened one new pharmacy every three days. Our key priority now is to finance further development and provide balanced growth of the Pharmacy Chain.»

Svein Aage Olsen, Financial Director:

«In September 2005, Pharmacy Chain 36.6 together with the Bank of Moscow took out a syndicated loan of 1 billion roubles for 2 years and another one of $50 million for 3 years, which are to be used to refinance the current short-term debt of the Company.»