LOMO PLC summed up the results of the first quarter of 2004.

  In accordance with the results of the quarter revenues (net) from the sale of goods, products, works, services (less value-added tax, excises and similar mandatory payments) amounted to 249,4 million roubles in comparison with 99,2 million roubles in analogous period of previous year.

  Cost of sales of goods, products, works and services amounted to 217,8 million rubles (in the first quarter of 2003 it was 96,2 million roubles), loss from sales – 62,4 million roubles (in 2003 it was 230,2 million roubles for analogous period), net loss – 150,2 million roubles (in analogous period of previous year it was 139,1 million roubles).

  Accounts payable of the enterprise in the beginning of reporting period was 452,9 million roubles, in the end – 530 million roubles. Debtors of LOMO – 637,4 million roubles (in the beginning of the quarter) and 623, 2 million roubles (in the end of the quarter).

  The first quarter for many industrial enterprises, including LOMO PLC, is traditionally characterized by low volume of sales. The point is that in the period by the end of March signing of big state contracts on supplying of defence and civic products takes place. Profit from them will appear later.

  Following thing - keeping of infrastructure of the enterprise, which totals the biggest part of the expense’s structure of LOMO - constantly affects on the results of activity of the firm.   Profitable products of the company with taking into account of these expenses become unprofitable in the beginning of the year. LOMO introduced the expenses discount system at the places of its rising to improve situation in 2003. It allowed defining expenditures of the enterprise for realizing different business-functions and taking decisions about reducing of ineffective expenses.  The firm succeeded to reduce unprofitability of devices in the first quarter – if for the first three months of 2003 negative figure of profitability amounted to 27 but for the analogous period of 2004 it was only 7

  Thanks to realized measures the first quarter of current year brought LOMO 15from the annual plan of profit, which amounts to 2 billion roubles. For the analogous period of last year the enterprise got only about 10of annual turnover, amounted to one billion and 760 million roubles.

  So if we consider balance sheet of LOMO on the whole, it’s possible to mark a typical for the first quarter low volume of sales. If we analyze financial indexes separately, it’s worth marking the growth of profitability of LOMO products and raising of effectiveness of work of the company. High-profitable related directions of business continued to bring their contribution into increasing of LOMO gross profit in the first quarter of 2004. We could see the growth of volumes and profitability of leasing.

  Besides constant tendencies, several addition circumstances affected the accounts of the first quarter. In 2003 LOMO improved situation in the sphere of loans, made them more long-term at the expense of placing of the second bonded loan  - 700 million roubles. However this process has the other side – coupon payments on bonds, amounted to 54 million roubles, were made in the first quarter and formally made worse indexes of activity of LOMO for this period.

  Analyzing the balance sheet of LOMO we see innovations, which the enterprise conducts in its structure policy.  New line has appeared in the line “profit” of the balance sheet. This is profit from realization of goods and this index is growing very rapidly.  It’s connected with following fact – the majority of subsidiary firms realize products with the trademark of “LOMO”. However, in the nearest future the enterprise is going to realize complicated structure innovations with redistribution of goods from LOMO to subsidiary companies. LOMO will pass to the consolidation accounts, which will show tendencies of economical and organizational development of the firm.