Europe

Russia’s HydroOGK boosts 2006 profit tenfold

Russian hydroelectric generator HydroOGK said August 16 it posted a tenfold increase in 2006 net profit after reclaiming funds from a financial reserve created to compensate for asset depreciation.

HydroOGK, which provides a fifth of all power produced in Russia, posted a 2006 net profit of 21.3 billion rubles (US$831 million), to international financial accounting standards. The company said in a statement 2006 revenues were 20.6 billion rubles (US$803.7 million), up 36 percent.

State-controlled HydroOGK was spun off from former power monopoly Unified Energy Systems (UES) under sector reforms aimed at introducing competition. (HNN 7/30/07) It will become the world’s second-largest hydroelectric power generating company, behind Canada’s Hydro-Quebec, after completing a restructuring, scheduled by the end of this year.

The company, which acts as the backbone of the power industry by stabilizing supplies and ensuring reliability of the system, is also expected to list shares in February 2008.

In July, the UES board endorsed share exchanges and initial public offerings to advance its power reform agenda, including the partial spin-off of HydroOGK. HydroOGK is listed with an installed capacity of 23,300 MW and generation of 75.2 billion kWh in 2006.