OREANDA-NEWS. March 09, 2010. Electricity output at OGK-6 dropped 25% y-o-y last year; however, despite the slump in energy produced, the genco’s revenue decreased by just 1% in comparison with 2008, thanks to an average 28% tariff growth rates and efficient work of the company’s power trading subdivision.

The genco’s manufacturing costs shrank by 9.6%, primarily due to a reduction in fuel costs, caused, in turn, by the lower energy output and a decreased load on less efficient capacities.

We are mixed about OGK-6’s FY 2009 financial results. It is clear that the company managed to improve some key financials, which was on one hand related to management’s efficient cost-cutting efforts, and on the other hand to reduce fuel expenses because of lower electricity output. In addition, we note the genco suffered a loss in 4Q2009, due to a rise in capacity load coupled with the use of expensive energy resources, which demonstrated the company’s fuel inefficiency. Given the controversial nature of the published financial report, we do not expect it to have any notable impact in OGK-6 stock valuations.