Power Machines published consolidated financial statements for 2007 which was drawn up in accordance with Russian Standards of Business Accounting (RSBA).
Revenues of the company in 2007 amounted to 17,7 billion rubles that is 22% more than in 2006. Net loss in 2007 amounted to 3,1 billion Rubles. The company suffered losses due to execution of large export contracts for complete supplies concluded in 2003-2005.
To improve financial statements of the company in 2006-2007 complex measures were taken to increase efficiency of the contracts, and namely new contracts were concluded on terms of price escalation, administrative costs were cut, scopes of supplies were increased and production costs were reduced. Positive effect of the above measures is expected in 2008.
The company’s activities in 2007 predetermined further effective growth. Power Machines’ order portfolio in 2007 enjoyed 53% growth and by the end of the financial year it amounted 2,6 billion USD (as of December 31, 2006 – approximately 1,7 billion USD). Home market sector in the company’s order portfolio reached 60%. In years to come Power Machines will put priority to the Russian market. At the same time Power Machines will hold onto its positions in the traditional markets of the countries of South-East Asia, Latin America, the CIS and Europe.
As of today debt load of the company decreased essentially. In comparison with 2006 average credit profile decreased more than twice and amounted 120-150 million USD.
Scope of supplies of Power Machines in 2007 increased one-half in comparison with the previous year. And namely the company manufactured turbine equipment with a total capacity 4,5 GW and generator equipment with a capacity of 3,5 GW.
Growth of production became possible due to execution of large contracts for the Russian market that suffers great shortage of power engineering products. In 2007 the company manufactured equipment for some of its large contracts among which are Sipat TPP and Barh TPP (India), Buon Kuop HPP and A Vuong HPP (Vietnam). Exceptionally strict price and technical terms of the contracts let Power Machines not only enter new markets of India and Vietnam but enlarge its presence in this regions. The main advantage the contract for supplies of equipment for Sipat TPP became development and manufacture of a brand new product, especially for Russia and Power Machines, such as 660 MW steam turbine for supercritical steam parameters of home development.
Production program of 2008 stipulates further accumulation of production capacity of the company and production of turbine equipment with total capacity of 6,7 GW and generator equipment with total capacity of 5,8 GW.
Production of additional shares with a total price of 274,4 million USD (at the rate of Central Bank of the Russian Federation as of 07.08.07) became one of the key events of 2007. The shares were placed at the top of the price band.
Changes in the Board of Directors of Power Machines in the end of the financial year became the other significant event of 2007. Alexei Mordashev consolidated about 55% of the company’s shares that used to belong to Interros and RAO “UES of Russia” via Highstat Limited Co.
Throughout the previous year capitalization of Power Machines increased by 30% and amounted to 43,4 billion rubles as for December 31, 2007.