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WGC-2, WGC-4: Sound IAS 2007 reports - July 21, 2008

Filed Under Bullet-moments | 

While describing wholesale generating companies (WGCs) last time, WGC-2 and WGC-4 were the only companies, which did not establish their IAS 2007 reports. Now, after they issued their reports, we have made some corrections in our WGCs’ model.

According to the results of year 2007, WGC-2’s revenue increased by +41% and reached 1,322 mn USD, while company’s cost rose by +35% and totaled 1,300 mn USD. As a result, WGC-2’s EBITDA margin formed 4.7% in year 2007.

The 2007 results indicate that WGC-4’s revenue increased by +28%, to 1.230 mn USD, company’s costs expended by +25% and reached 1.175 mn USD. Excluding reversing of reserves under devaluation of basic assets, EBITDA margin of WGC-4 increased by +1.7 p.p. and formed 10%.

The main influence on companies’ operating results was exerted by several factors: growth of gas prices, regulated and free tariffs of electricity power, increased share of energy market liberalization and also buy/sell activities at the wholesale market in energy segment.

Taking into account new financial results, we have reviewed the target prices of WGC-2 and WGC-4 and increased them, because the IAS reports met the forecasts. As a result, estimated price of WGC-2’s share formed 0.2387 USD vs 0.2325 USD, prior year results. Price of WGC-4’s share formed 0.1977 USD against 0.1943 USD, the last year results. We confirm “BUY” recommendations on companies’ securities. It should be mentioned that in short-term prospect, the prices of companies’ shares could fall down due to sales values of other former subsidiaries of UES.

WGC-2, WGC-4: Sound IAS 2007 reports - July 21, 2008 (PDF)

Comments

One Response to “WGC-2, WGC-4: Sound IAS 2007 reports - July 21, 2008”

  1. sharetipsinfo on July 29th, 2008 7:18 am

    Hi,

    5 days of rally in Indian stock market recommendation and again a crash. One day gap up opening next day just mirror reflection of it (Gap down). All points gained by nifty whipping out. Investors was thinking that they should reenter in the market and can take long positions but just see what happened. These kind of movement are called traps. Still we are expecting more short covering to come in 2-3 days.

    But do remember overall market mood is bearish throughout the year. So invest money but for short term not for medium to long term. You will get much better opportunities to do so at more lower levels.

    Thanks

    Regards

    SHARETIPSINFO TEAM

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