Russia generator OGK-1 2008 profit rises fourfold

MOSCOW, May 18 (Reuters) - Russian electricity producer OGK-1 (OGK1.MM) on Monday reported a near fourfold rise in 2008 net profit to 7.46 billion roubles ($233 million), boosted by the sale of a Siberian power plant stake.

Revenue rose 11 percent to 49.9 billion roubles.

The company sold a 25 percent-minus-one-share stake in Nizhnevartovsk power station to TNK-BP (TNBPI.RTS) for 230 million euros ($311.5 million).

Russia's power companies are grappling with falling demand as the country experiences its first recession in a decade and many industrial consumers idle factories or cut working hours.

At the same time, the global credit crunch has made it hard to secure funding for extensive capital expenditure programmes.

OGK-1 has been particularly strapped for cash, because it was the only one of Russia's twenty thermal power producers not to attract a strategic investor during the privatisation of the electricity sector between 2005 and 2008.

The company was forced to borrow heavily to finance capex. Total liabilities rose 58 percent to 17 billion roubles.

It plans to cut around 10 percent of staff, a source told Reuters last month.

Shares in OGK-1 were up 2.1 percent at 0.441 roubles by 1331 GMT, outperforming the broad MICEX index .

"The 2008 results are better than expected in general. We see the figures as slightly positive," Rye, Man & Gor Securities said in a research note. "Despite current difficulties we expect OGK-1 to improve results by 2010 as power demand will increase."

In 2007, OGK-1 reported a profit of 1.97 billion roubles, dented by a one-off reversal of prior losses [ID:nL05226534].

OGK-1 owns and operates six power stations scattered around the country with a total generating capacity of 9.5 gigawatts. (Reporting by Tatiana Yegorova; Writing by Toni Vorobyova; Editing by Erica Billingham)