Daily analyst comments

RysHydro reports 9M 2009 RAS financials


	RusHydro

Capitalization: 14 107 767 985,25 $

Common shares
Rating	Buy
Price	0,052 $
Target price	0,092 $

Price changing
week	month	year
0,7%	7,5%	50,1%

02.11.09 10:05

9M 2009 RAS financials from RysHydro are likely to trigger a moderately positive reaction on the market, due to strong growth in margins.

On October 30, RysHydro published financials audited to RAS for the first nine months of 2009.

RusHydro: main items of the income statement, mn RUB

Indicator	9M2008	9M2009	9M2009/9M2008
Revenue	45 499	58 698	29%
COGS	28 571	26 404	-8%
Operating income	16 928	32 294	91%
Operating margin	37%	55%	+18pp
Net income	12 317	25 843	110%
Net margin	27%	44%	+17pp

Source:RysHydro data, Finam estimates

Revenue growth was driven by a number of factors, notably, growth of tariffs for capacity and electricity, growth in electricity sales at free-market prices, due to electricity market deregulation, and an 8% decrease in COGS, attributable to cost-cutting measures adopted by management and a lack of the substantial fuel costs that are typical of thermal power generation.

An explanatory note to the financial report says that the nine-month results were impacted by the accident at the Sayano-Shushenskaya HPP, which has led to property writedowns of RUB 900 million, to be reflected in the full-year financial statement. Preliminary estimates put a loss from the partial writedown of the property damaged by the accident at RUB 3.5 billion.

We believe that the financial results from RysHydro will exert a moderately positive impact on its stock valuations, due to strong growth in margins. The accident at the Sayano-Shushenskaya HPP should have a limited impact on the company’s full-year financials. Our target price for RusHydro shares is USD 0.045 per share at the end of 2010, with a BUY rating.

Konstantin Reily

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