Moscow. 3 November 2003. RAO "UES of Russia" has released its interim financial statements prepared in accordance with the Russian Accounting Standards (RAS) for the first 9 months of 2003.

According to Q1-Q3 2003 balance sheet, the operating income of RAO "UES of Russia" increased to RUB40.0 billion from RUB36.6billion in the same period last year. At the same time, the cost of goods, works, and services sold grew to RUB15.1 billion from RUB12.4 billion. In the first 9 months of 2003, the Company's sales profit increased RUB0.6 billion to RUB22.6 [year on year].

As a result, the net profit of RAO "UES of Russia" in the first 9 months of 2003 was RUB19.6 billion compared to RUB40.0 billion during the same period of 2002. The decrease in the Company's net profit in 2003 in year-on-year terms was due to the fact that the Company's 2002 financials reflected the balance sheet profit received as a result of repayment of the Russian Federation's debt owed to the Czech Republic (the transaction was performed in accordance with the Resolution of the Russian Government on repayment of the national debt to the Czech Republic).

The accounts payable of RAO "UES of Russia" decreased more than 3.4 times over the reporting period to RUB15.4 billion as of 30 September 2003 from RUB52.3 billion as of 1 January 2003. The major factor that lead to the payables decrease was payment of the amounts owed as contributions to the capital of the newly established companies: OAO "UES FGC", OAO "UES SO-CDA", OAO "Kirishskaya TPP", and OAO "Kharanorskaya TPP".

As at 30 September 2003, the accounts receivable of RAO "UES of Russia" amounted to RUB40.4 billion, up from RUB35.1 billion as at the beginning of 2003. Such increase in the receivables was due to the fact that the Company's financials reflected its participation in other entities and that the Company paid excess taxes as a result of contributions made to the authorized capital of the companies established as a result of the Company's reorganization.