Highlights:

· Consolidated Group revenues increased 14.4 percent and totaled RUR 56,888 million;

· Operating profit soared  117.7 percent  to reach RUR  22,539  million;

· EBITDA* increased to RUR 28,111 million, an 85.6 percent period-on-period increase.

Combined and Consolidated Income Statement:

Group revenues during the reported period stood at RUR 56,888 million compared to RUR 49,709 million during the same period in 2008 – a 14.4 percent increase. This increase can primarily be attributed to:

· A greater share of sales at  non-regulated prices in full accordance with the timeline for electricity market liberalization in Russia;

· A larger Special Investment Component (SIC), which is included in the tariff, than in the previous year.

The Group’s segment “Generation” accounted for 69 percent of the Group’s total revenues, whereas the retail segment contributed almost 28 percent to Group revenues.

Operating expenses for H1 2009 totaled RUR 34,349 million versus RUR 39,339 million during the first six months of 2008 – a 12.7 percent drop.

This drop in operating expenses was caused by:

· Lower volumes of electricity purchases to provide contracted supply under regulated agreements.  This reduction is  connected with increased free market share;

· Reduced cost of electricity purchases on the day-ahead-market (which reflect decreased consumption).

As a result of higher revenues and the drop in expenses, Group’s net profit soared from RUR 7,631 million during the first six months of 2008 to RUR 17,859 million during the first half of 2009. This represents a 134 percent increase.

Combined and Consolidated Balance Sheet:

RusHydro Group’s total assets as of June 30^th, 2009 amounted to RUR 460,262 million, which is a 7.9 percent increase compared to the value of total assets as of December 31^st, 2008.

The value of the Group’s property, plant and equipment experienced a 1.6 percent change from December 31^st, 2008 to June 30^th, 2009 and stood at RUR 342,383 million as of the end of the reported period.

Total liabilities for the RusHydro Group as of June 30^th, 2009 increased insignificantly and totaled RUR 83,067 million, a 0.4 percent increase compared to  the level seen as of  December 31^st, 2008.

Total equity for the RusHydro Group as of June 30^th, 2009 equaled RUR 377,195 million against RUR 343,612 million as of December 31^st, 2008. The 9.8 percent increase in equity can primarily be explained by an increase in retained earnings and other reserves, as well as by a RUR 10 billion increase in the Company’s share capital. Respective amendments to RusHydro’s Articles of Association were made on April 8^th,2009.

Changes in the Group’s Structure:

In June 2009, OJSC Ust’-Srednekanskaya HPP completed an additional share issue; these additional shares were bought by the Group and the State. The share of voting rights in this subsidiary owned by the RusHydro Group (both directly and indirectly) has been reduced from 77.85 percent to 74.47 percent. The Group’s effective interest in the earnings of the subsidiary has also decreased from 51.86 percent to 49.69 percent.

Two new wholly-owned subsidiaries, OJSC Nizhne-Kureiskaya HPP and OJSC Dalnevostochnaya WPS, were established by the Group in May 2009 and June 2009, respectively.

Key events after the end of the reported period (post- June 30^th, 2009):

· July 6^th, 2009   – The Company’s Global Depositary Receipts (GDRs) were admitted for trading (under the ticker symbol: HYDR)  on the regulated sector of the International Order Book (IOB) of the London Stock Exchange;

· August 7^th, 2009  – The Company launched a new Level 1 American Depositary Receipt (ADR) program; ADRs were immediately admitted for trading on the regulated sector of the International Order Book (IOB) of the London Stock Exchange;

· August 17^th, 2009 – An accident occurred at the Company’s Sayano-Shushenskaya HPP site, resulting in significant damage to property, plant and equipment, as well as the loss of human life. RusHydro has launched extensive efforts to liquidate consequences of this accident. 

· September 24^th, 2009 – The Russian Federal Service for Financial Markets (FSFM) has registered the Report on the results of the additional share issue of JSC “RusHydro” (state registration number for  the issue is: 1-01-55038-037D). The total number of additional shares placed within the framework of the issue was 14,681,412,135.

· November 19^th, 2009 –   The FSFM has registered the Decision on an additional share issue and the Prospectus for  the Company’s planned securities issue (the overall volume to be placed is19 billion shares, the method of placement- open subscription).

The table below provides information on some of the Company’s key financial ratios for the reported period:

* - EBITDA equals  earnings before the deduction of interest expense and financing items, income taxes and non-cash items, such as: depreciation, disposal charges, impairment/reversal of impairment of plant, property and equipment or impairment of accounts receivable.