On August 6, 2004, AO MOSENERGO held a corporate conference at which deputy chief engineer for electric equipment Vadim Zinakov delivered a report on the Company’s results in the first half of 2004.

From the beginning of 2004, AO MOSENERGO’s power stations generated 36,7 bn kWt-h of electricity. Local consumption grew mostly due to higher demand from the population and budgetary consumers. In the first half of 2004 AO MOSENERGO purchased 4 bn kWt-h of electricity in the wholesale market, in order to meet the growing demand in Moscow region.

In the first half of 2004, electric power stations of AO MOSENERGO produced 40,8 m Gcal of heat (6,8% less than last year due to higher average daily air temperature).

During this period AO MOSENERGO sold power worth 45.6 bn rubles (excluding VAT). Sales growth accounted for higher average tariffs and growing effective electricity sales. Effective sales grew year-on-year 9.4 bn rubles or almost 27%. Profit on sales exceeded 7,345 m rubles.

After paying taxes and other obligatory payments, AO MOSENERGO showed a loss at around 285 m rubles (against 1,307.6 m rubles profit for the same period of last year). The loss is partly due to the fact that the Russian government has not yet approved the list of assets eligible for tax relieves. As a result, AO MOSENERGO had to pay much higher property taxes.

From early 2004, AO MOSENERGO’s receivables (including FOREM wholesale buyers) increased 20% (to 7 bn rubles). The increase in receivables is mainly caused by higher debts of wholesale resellers, industrial plants and the Ministry of Defense. At the same time, the debt of heat consumers was reduced by 63,6%.