Russia’s RusHydro reports soaring profit

The net profit of Russian hydropower giant RusHydro rose to 6.5 billion rubles (US$276.5 million) in 2007 from 79 million rubles (US$3.3 million) the previous year.

RusHydro, which completed its name change from HydroOGK, said the results excluded a one-off accounting measure for depreciation of assets.

Revenues doubled to 47.8 billion rubles (US$2 billion) from 24.1 billion rubles (US$1 billion) year on year, the state owned company said.

On the occasion of announcing the hydropower utility’s consolidated financial results, Chief Financial Officer Sergei Yushin told reporters RusHydro expects its net profit to increase to 16.7 billion rubles (US$710 million) in 2008.

In May, RusHydro announced it would launch a closed issue of 4.3 billion shares to the state in the second half of 2008. (HNN 5/1/08) At a price of 2.02 rubles per share, the entire rights issue would cost 8.69 billion rubles (US$368.2 million).

The firm recently consolidated 21 companies and about 50 hydroelectric stations to become the world’s second largest producer of renewable energy behind Canada’s Hydro-Quebec. RusHydro produces 20 percent of Russia’s power and plans to nearly double its generating capacity by 2020, bringing on line 22,200 MW mainly in the Russian Far East, Siberia, and the Caucasus.

Russia’s Interfax news agency reported Energy Minister Sergei Shmatko said a new RusHydro chief executive officer is expected to be appointed within two weeks. Former CEO Vyacheslav Sinyugin recently resigned to take a post in the Ministry of Energy.

RusHydro’s former parent, monopoly utility Unified Energy Systems, ceased to exist July 1 after spinning off its holdings, including RusHydro, which remains in state hands. The reorganization of Russia’s electricity sector created other spin-offs including six wholesale generating companies, 14 territorial generating companies, Federal Grid Co., System Operator, IDC Holdings, RAO ES of the East, and Inter RAO UES.

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