Power Machines published financial statements for 2006 prepared in accordance with international accounting standards

PJSC “Power Machines” (hereinafter the “Company”) has published its consolidated audited financial statements for the year 2006 which were prepared in accordance with the International Accounting Standards (IAS). The audit of the financial statements was performed by ZAO “Deloitte and Touche CIS.”

The Company showed the following financial performance:

Thousand USD

2006 

2005




Revenue from sales 

579,072

667,173

Cost of sales

583,443

504,803

Gross profit

(4,371)

162,370

Operating profit

(158,706)

(6,563)

Profit before taxation

(164,431)

(46,818)

Net profit

(132,157)

(40,523)

EBITDA

(122,638)

25,021

Revenue from sales in 2006 reached 579,072 thousand US dollars, which is 13.2% less than in 2005 (667,173 thousand US dollars). The decrease in revenues in the reporting period is connected with the (particularities) of the accounting policies of the Company and changes in the contracts portfolio. In the conditions of the growing demand for the power engineering industry products in the power generating sector the Company production facilities focus on the quality performance of long-term contracts for supply of the main equipment for turbine rooms, which the Company gives the first priority. Due to the production facilities being currently heavily loaded the scope of the short-term contracts, in particular of those for supply of spare parts and provision of services, has decreased which has been reflected in the financial statements of the Company.

According to the Company financial statements in 2006 the Company incurred losses in the amount of 132,157 thousand US dollars. The loss was mainly incurred in connection with implementation by the Company of its key contracts for supply of the full-set equipment for Wong Be TPP and Sipat TPP and reconstruction of Balimela HPP, which were entered into in 2003 – 2004. The contracts provide for the strict pricing and technical terms. At the same time the contracts opened the Company an opportunity to enter the new thermal power equipment markets, such as Viet-Nam and India, and to significantly strengthen its positions in these geographical regions.