NLMK.L Regulatory News (NLMK)

20 Jun 2007 07:02

OJSC Novolipetsk Steel20 June 2007 20.06.2007 NOVOLIPETSK STEEL Q1 2007 US GAAP RESULTS OJSC Novolipetsk Steel (NLMK), the LSE listed leading Russian steel producer,today announces its consolidated results for the 1st Quarter 2007. Highlights: Strong Q1 2007 financial results • Sales revenues amounted to USD 1,750.2 million (+61% YoY) • Cash flows from operating activities were USD 459.3 million • EBITDA* amounted to USD 748.1 million (+93% YoY); EBITDA margin 43% • Cash and cash equivalents USD 898.3 million as of 31 March, 2007 Recent Developments: M&A and investment activities. The company continued to implement a dynamic M&Astrategy and actively manage its asset portfolio in Q1 2007: • Disposal of stakes in energy assets for USD 78.7 million in February 2007. According to the decision of the Board of Directors, NLMK's stakes in energy assets were classified as non-core investments. Proceeds from the transaction will be directed to the modernization and development of in-house energy facilities. • In April 2007, the Prokopievskugol Group of Coal Companies was sold to a Municipal State Company representing the City Administration of Prokopievsk. The transaction price was USD 1. • NLMK-Duferco JV has reached an agreement to acquire substantially all the assets of Winner Steel INC. (Pennsylvania, USA) and certain of its liabilities. Winner Steel is one of the largest independent galvanized steel producers in the United States with combined annual capacity of around 1.2 million tonnes. The transaction was closed in June 2007. The total value of investments in fixed assets for Q1 2007 amounts to USD 173.2million. The following major projects were realized under the TechnicalUpgrading Programme: • Signing an equipment supply agreement with the Austrian company Andritz AG. Andritz AG will supply two rolling mills, each with 110,000 tpy capacity, for the production of grain and non-grain-oriented steel and new hot-dip galvanizing line with 300,000 tpy capacity. • Installation of a new coil slitting line with a capacity of 60 tpy. The new equipment will enable the company to introduce a new product - grain-oriented (GO) steel strip, with a width ranging from 80 to 400 mm, and a thickness of 0.23 to 0.30 mm. • Re-commissioning of a 460,000 tonnes per year coke battery #2 after major renovation at the production site in Lipetsk. Final dividend. The Annual General Meeting (AGM) held on 5 June, 2007 approvedthe final dividend for 2006 of RUR 3.0 per ordinary share. Including the interimdividend of RUR 1.5 per ordinary share already paid for the first six months of2006, the AGM approved the payment of an additional RUR 1.5 per ordinary share.Payment of the dividend on ordinary shares will be made before 3 September,2007. NLMK will transfer funds for dividend payments on Global Depositary Shares(GDSs) to the depositary bank on 25 July 2007. Key financials for Q1 2007 USD, million Q1 2007** Q4 2006** Change, % Q1 2007 ** Q1 2006** Change, % Revenue 1 750.2 1 687.1 4% 1 750.2 1 086.8 61%Gross profit 817.4 918.7 -11% 817.4 438.1 87%Operating income 640.1 565.1 13% 640.1 376.4 70%EBITDA* 748.1 801.8 -7% 748.1 387.8 93%EBITDA Margin(%) 43% 48% 43% 36%Net profit*** 456.6 381.2 20% 456.6 545.9 -16% * EBITDA = Net income (post share of minorities) + income tax +/- interestexpense/(income) + depreciation +/- losses/(gains ) on disposals of property,plant and equipment +/- losses/(gains) on financial investment +/- losses/(gains) from discontinued operations + accretion expense on asset retirementobligations - gains on loan restructuring; ** Q1 2007 and Q1 2006 are official reporting periods. Q4 2006 numbers arederived by computational method. *** Q1 2006 net profit includes gain from the disposal of interest in LebedinskyGOK. Q1 2006 excluding gain from the disposal of interest in Lebedinsky GOK isUSD 248.1 million. Commenting on NLMK's US GAAP Q1 2007 results, Galina Aglyamova, Vice PresidentFinance & CFO, said: "NLMK has demonstrated strong financial results in Q1 2007. The EBITDA marginstood at 43% while operating income surged 70% on a year-on-year basis. Thecompany's sound performance was driven by growing sales volumes particularlysales of high value-added products along with the favorable pricing environmentin our core markets. "At the beginning of the year, NLMK Group started to implement the next phase ofthe Technical Upgrading Program as part of our "Sustainable Growth Strategy 2007- 2011". The Company continued the process of enhancement and modernization ofexisting production facilities, value-chain optimization and integration ofrecently acquired assets into the Group structure. The consistent implementationof our strategy is a key element of NLMK's successful development and long-termstability. "We maintain a positive outlook on steel demand both on the domestic and worldmarket in 2007. The price growth started at the end of Q1 2007 and continuedthrough Q2 2007, plateaued in June. While we may see possible price softeningtowards the end of the year we believe NLMK Group should again demonstraterecord financial results and strengthen its position among world's mostprofitable steelmaking companies in 2007." Management Comments In recent years, NLMK has maintained its position as one of the most efficientsteel producers in Russia and throughout the world. In 2007 the Company startedto implement its "Sustainable Growth Strategy 2007-2011" that comprises the 2ndphase of the Technical Upgrading Program which is focused on further enhancementand modernization of existing production facilities and acquisitions of highquality rolling assets on core markets. One of the factors contributing to the consolidated financial performance in Q12007 is an acquisition of Altai-koks and Prokopievskugol Group of Coal Companiesin April 2006 and VIZ-Stal in August 2006. Relatively favorable steel market conditions in Q1 2007 allowed the Group toincrease sales volumes and prices compared to Q1 2006 and resulted in growth ofsales revenue and financial results. Thus, sales revenue in Q1 2007 amounted toUSD 1,750.2 million (+61% compared to Q1 2006), operating profit amounted toUSD640.1 million (+70%) and EBITDA equaled USD748.1 million (+93%). Furthermore, NLMK has changed export delivery conditions. Starting from March2006, transportation costs to customers, border terminal or sea port areincluded in product price. Net profit in Q1 2007 amounted to USD 456.6 million, which is 16% less than inQ1 2006. The disposal of the Group's interest in Lebedinsky GOK in Q1 2006 isthe main reason for the decrease in Q1 2007. If we take net profit withoutproceeds from the disposal of the interest in Lebedinsky GOK, net profit in Q12007 grew by 84% compared to Q1 2006. Net profit in Q1 2007 compared to Q4 2006increased by 20%. Despite sales growth, average steel prices in Q1 2007 were lower than in Q42006. Thus, the growth of financial results was less significant compared to Q42006. Thus, the gross profit and EBITDA in Q1 2007 went down 11% and 7% comparedto Q4 2006. At the same time, sales revenue in Q1 2007 compared to Q4 2006 grewby 4%, operating profit by 13% and net profit by 20%. The countermovement offinancial indicators results from including impairment losses and accretionexpense on asset retirement obligation primarily attributable to ProkopievskugolGroup of Companies into Q4 2006 consolidated financial accounts. This factoraffects gross profit and EBITDA while it has no impact on operating and netprofit. Profit (equity in net earnings) of the JV with Duferco Group amounted to USD10.2 million in Q1 2007, which is shown in the consolidated income statement. The Group is generating stable operating cash flow. In Q1 2007, net cash flowreceived from operating activities amounted to USD 459.3 million (+190% comparedto Q1 2006). The significant volume of available cash allowed the Group to repay short-termcredits obtained in December 2006, which resulted in higher financialsustainability. Steel Segment The steel segment is the key segment of the Group. In Q1 2007 NLMK, Dansteel A/Sand VIZ-Stal sales to external customers were the main contributors to thefinancial results of the segment. The steel segment's share in consolidatedrevenue from external customers is over 90%. In Q1 2007 the steel segment produced 2.3 million tonnes of crude steel, 0.9million tonnes of saleable slabs and 1.3 million tonnes of rolled products. Revenue from external customers in Q1 2007 amounted to USD 1,598.7 million,which is 52% higher than in Q1 2006, operating profit USD 519.9 million (+55%compared to Q1 2006). The major reason for this improvement is the growth ofsales volumes and prices of main products. An additional factor is theconsolidation of VIZ-Stal in August 2006. Sales revenue from external customers changed slightly compared to Q4 2006.Price increases for energy and basic raw materials in Q1 2007 compared to Q42006 resulted in cost price growth of 13% and caused operating profit todecrease by 15%. It should be noted that NLMK has already settled supply pricesfor coking coal concentrate, iron ore raw materials and energy until the end ofthe year. Mining segment In 2006, NLMK's mining segment was comprised of OJSC Stoilensky GOK, OJSCDolomite and OJSC Stagdok, companies that supply raw materials to NLMK'sproduction facilities in Lipetsk and which also sell certain volumes outside theGroup. Iron ore producer Stoilensky GOK, the principal mining company within the Group,produced 2.9 million tonnes of iron-ore concentrate and 0.4 million tonnes ofsinter ore in Q1 2007. The output of Dolomite in the same period was 0.4 milliontonnes of flux dolomite. Stagdok, which supplies limestone, produced 0.8 milliontonnes of fluxing limestone in Q1 2007. In Q1 2007, the mining segment's revenue from external customers was USD 23.2million, which is 12% higher than the level of the previous quarter. Thisincrease was mainly due to increased prices for the segment's products. Revenuefrom external customers went up 41% on a year-on-year basis as a result ofgrowing iron ore concentrate and sinter ore production volumes and commissioningof new beneficiating facilities. The segment's revenue, including intersegmental sales, was USD 215.3 million inQ1 2007 (+2% and +97% compared to Q4 2006 and Q1 2006 respectively). Thisfavorable performance resulted from growing prices for the segment's productssince Q3 2006. As 89% of the mining segment's sales in value terms are internalsales within the Company, the segment's share in NLMK's consolidated externalrevenue in Q1 2007 was 1.3%. Operating profit for the mining segment increased in Q1 2007 compared to Q1 2006and Q4 2006 by 316% and 9% respectively due to sales revenue growth exceedingthe growth rate of costs. Coke-chemical segment The coke-chemical segment is comprised of OJSC Altai-koks and its subsidiaries,consolidated within the Group from Q2 2006. Altai-koks is one of the leadingproducers of coke in Russia. In Q1 2007, Altai-koks produced 879,000 tonnes ofcoke of 6% moisture. In Q1 2007, the coking segment's revenue from external customers was USD105.4million, a decrease of 14% compared with Q4 2006. Operating profit amounted toUSD3.2 million in Q1 2007, a decrease of 60% compared with Q4 2006. The decreased financial results in Q1 2007 are due to an unfavorable marketenvironment in the coke market, together with the growth of coal concentrateprices in Q1 2007. The coke-chemical segment's share of Q1 2007 consolidated revenue is 6%. After putting into operation new coke battery #5 at the end of 2006, totalproduction capacity of Alta-koks reached 5.0 million tonnes of coke per year. Other segments Revenue from other operating segments primarily includes revenue from threeoperational units, whose results do not exceed threshold values. These segmentsinclude sea port services, financial services, banking and insurance services,as well as coal mining and refinement by the Prokopievskugol Group of CoalCompanies. In Q1 2007, revenue from other segments from external customers was USD 22.9million (+5% compared with Q1 2006). The revenue increase is mainly attributableto the consolidation of the financial results of Prokopievskugol Group of CoalCompanies, which was selling a portion of its products to external customers,from Q2 2006. In 2006, gross profit from other segments amounted to USD 13.8 million, a USD1.8 million decrease compared with Q1 2006. The operating loss in Q1 2007 wasUSD 17.6 million (USD 27.5 million less compared with Q1 2006). This operating loss was mainly caused by Prokopievskugol operating losses in Q12007 due to high production costs. Income before minority interest rose in Q1 2007 amounting to USD 78.9 millionwhich is primarily attributable to the waiver of Prokopievskugol obligations forthe repayment of a loan. The additional driver was the profitable performance ofsubsidiaries of NLMK Group including insurance companies and banking unit. In April 2007, NLMK Group divested Prokopievskugol Group of Coal Companies to aMunicipal State company representing the City Administration of Prokopievsk. Consolidated financial results In Q1 2007, NLMK's sales revenue reached USD 1,750.2 million, an increase of 61%compared with the corresponding period of the previous year. The key factorscontributing to the level of revenue were: • growth of production volumes and sales • growth of average prices for the products sold by the Group in Q1 2007 compared with the corresponding period of the previous year • consolidation of Altai-koks and Prokopievskugol Group of Coal Companies starting April 2006 and VIZ-Stal starting August 2006 • since March 2006 conditions for the delivery of exported products have changed. The sales price for NLMK's products now also include transportation costs customers, border terminal or sea port. Gross profit in Q1 2007 amounted to USD817.4 million, an increase of 87%compared with Q1 2006. Operating profit was USD640.1 million, an increase of70%. The slowdown in the rate of operating profit growth compared with that ofgross profit is due to an increase of sales, general and administrative (SG&A)expenses of USD115.5 million, which was led by a consolidation of assets in 2006as well as by a change of export delivery conditions. Q1 2007 EBITDA amounted to USD 748.1 million, an increase of 93% compared withthe corresponding period of the previous year. EBITDA margin for the firstquarter 2007 was 43%, an increase of 7 percentage points compared with the firstquarter 2006. NLMK Group's net profit in Q1 2007 amounted to USD456.6 million, a decrease of16% compared with the corresponding period of last year due to a significantnon-recurring income from the sale of stake in Lebedinsky GOK in Q1 2006. If theeffect of the sale of interest in Lebedinsky GOK is eliminated, NLMK's netprofit in Q1 2007 would be84% higher than in Q1 2006. In Q1 2007 revenue grew by 4% or USD63.1 million compared with Q1 2006. Thegross profit decrease by 11% or USD101.4 million compared with Q4 2006 isattributed to an increase of cost of goods sold due to increased basic rawmaterials and energy costs. Compared with Q4 2006, operating and net profit for the first quarter of 2007grew by 13% and 20% respectively which is attributed to recognition ofimpairment losses and accretion expense on asset retirement obligations in Q42006 that totaled USD156.7 million, which is mainly related to the operations ofProkopievskugol Group of Coal Companies. Consolidated balance sheet data At the end of Q1 2007, NLMK's assets increased by 7% against 31 December 2006 toreach USD 9,304.5 million. The share of the Company's own capital in thestructure of the sources used to finance NLMK's operations is permanently highand at the end of Q1 2007 it was 80%. The Group's balance sheet structure reflects the financial stability of thecompany, which is confirmed by the obtaining highest credit ratings amongRussian steelmakers. Highly liquid assets of NLMK substantially exceed the amount of its debt. NLMK'scash and cash equivalents position as at 31 March, 2007 amounted to USD898.3million, a 35% increase (or USD 233.1 million) compared to 31 December, 2006. In the first quarter of 2007, annualized return on assets (ROA) was 20% andannualized return on equity (ROE) was 26%. These ratios are higher than in Q42006, but lower than in Q1 2006 due to additional non-recurring gain from thedivestment of its interest in Lebedinsky GOK. Cash Flow In Q1 2007 net cash received from operating activities equaled USD459.3 million(+190% compared to Q1 2006). Stable generation of operating cash flow allows NLMK to finance the organicgrowth from its own cash funds without attracting substantial debt. In Q1 2007net cash received from operating activities exceeded purchases and constructionof property, plant and equipment by 170%. Cash outflow for investment activities in Q1 2007 amounted to USD166.5 millionwhich is USD801.9 million less than in Q4 2006. Substantial cash outflow in Q42007 was associated with the financing of the creation of a joint venture withthe Duferco Group. The main cash outflow for investment activities in Q1 2007 was associated withUSD173.2 million investments in fixed assets. Net cash flows associated with financial activities in Q1 2007 amounted toUSD70.3 million. The main cash outflows associated with financial activities arethe repayment of short-term credits that amounted to USD170.3. The main cashflow from financing activities is associated with the proceeds from disposal ofstakes in energy assets that were classified by the Board of Directors of NLMKas non-core assets. The proceeds from the transaction are USD78.7 million. Cash and cash equivalents as of 31 March 2007 equaled USD898.3 million, which is35% or USD233.1 million higher than the balance at 31 December 2006. The Company's sustainable financial position allows a flexible businessdevelopment strategy. The creation of additional shareholder value remainsNLMK's priority, and NLMK will continue to pursue this policy based on stringentfinancial discipline and balanced investment projects. Outlook We believe that export prices for most of Group's steel products, which havegrown since the beginning of the year, reached maximum level in May. Accordingto our estimates, there is a possibility of minor export price softening duringthe summer season. We expect prices to stabilize in September-October 2007.However, there is a possibility of further price softening towards the end of2007. The pricing environment on the domestic market will be stable during thenext several months. We expect domestic prices to soften only towards the end ofQ3 2007 due to seasonal factors. In 2007 as a whole, we expect growth of sales revenue and operating profit. Wealso forecast 2007 EBITDA growth compared with 2006 numbers. Since the beginning of 2007, the Group has been implementing its SustainableGrowth Strategy that includes Phase 2 of the Technical Upgrading Programme. Theimplementation of this strategy will help the Company to maintain its leadershippositions in terms of cost effectiviness and strengthen its key competitiveadvantages in the long-term perspective. Disclaimer: This announcement may contain a number of forward-looking statements relatingto, among others, the financial condition and results of operations of theCompany. Such forward-looking statements involve a number of risks anduncertainties that could cause actual results to differ materially from thosesuggested by them and are based on assumptions regarding the Company's presentand future business strategies and the environment in which the Company and itssubsidiaries operate both now and in the future. Forward-looking statementsspeak only as at the date of this announcement and save as required byapplicable legal and/or regulatory requirements the Company expressly disclaimsany obligation to release publicly any updates or revisions to anyforward-looking statements. Q1 2007 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)PREPARED IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THEUNITED STATES OF AMERICA Interim condensed consolidated balance sheets as at March 31, 2007 and December31, 2006 (unaudited) (All amounts in thousands of US dollars, except for share data) As at March 31, As at December 2007 31, 2006ASSETS Current assetsCash and cash equivalents 898,309 665,213Short-term investments 36,672 37,261Accounts receivable, net 1,251,869 1,150,492Inventories, net 873,728 856,940Other current assets, net 369,780 331,322Restricted cash 9,249 8,372Current assets, held for sale 44,364 - 3,483,971 3,049,600 Non-current assetsLong-term investments, net 855,667 810,350Property, plant and equipment, net 3,984,585 3,988,128Intangible assets, net 195,467 199,030Goodwill 566,584 559,703Other non-current assets 103,872 110,179Non-current assets, held for sale 114,401 - 5,820,576 5,667,390 Total assets 9,304,547 8,716,990 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilitiesAccounts payable and other liabilities 718,289 664,319Short-term borrowings 99,333 248,782Current income tax liability 84,382 80,350Current liabilities, held for sale 41,012 - 943,016 993,451Non-current liabilitiesDeferred income tax liability 552,396 537,647Long-term borrowings 50,523 48,153Other long-term liabilities 40,609 194,872Non-current liabilities, held for sale 175,395 - 818,923 780,672 Total liabilities 1,761,939 1,774,123 Commitments and contingencies - - Minority interest 136,264 133,425 Stockholders' equityCommon stock, 1 Russian ruble par value - 5,993,227,240 221,173 221,173shares issued and outstanding at March 31, 2007 andDecember 31, 2006Statutory reserve 10,267 10,267Additional paid-in capital 52,395 1,812Accumulated other comprehensive income 679,688 589,986Retained earnings 6,442,821 5,986,204 7,406,344 6,809,442 Total liabilities and stockholders' equity 9,304,547 8,716,990 Interim condensed consolidated statements of income for the three months endedMarch 31, 2007 and 2006 (unaudited) (All amounts in thousands of US dollars, except for earnings per share amounts) For the three For the three months ended months ended March 31, 2007 March 31, 2006 Sales revenue 1,750,166 1,086,809 Cost of salesProduction cost (830,451) (574,969)Depreciation and amortization (102,342) (73,701) (932,793) (648,670) Gross profit 817,373 438,139 General and administrative expenses (63,191) (35,177)Selling expenses (93,699) (16,155)Taxes other than income tax (14,318) (10,398)Accretion expense on asset retirement obligations (6,019) - Operating income 640,146 376,409 Loss on disposals of property, plant and equipment (12,609) (1,492)(Losses) / gains on investments, net (1,492) 383,759Interest income 25,029 29,300Interest expense (8,404) (4,541)Foreign currency exchange, net 11,832 (56,605)Other income / (expenses), net 13,261 (2,466) Income from continuing operations 667,763 724,364before income tax and minority interest Income tax (216,892) (176,424) Income from continuing operations before minority interest 450,871 547,940 Minority interest (5,660) (3,692) Equity in net earnings of associate 10,180 483 Income from continuing operations 455,391 544,731 Discontinued operations Gain from operations of discontinued subsidiary 1,226 1,172 Income from discontinued operations 1,226 1,172 Net income 456,617 545,903 Income from continuing operations per share (US dollars)basic and diluted 0.0760 0.0909 Income from discontinued operations per share (US dollars)basic and diluted 0.0002 0.0002 Net income per share (US dollars)basic and diluted 0.0762 0.0911 Interim condensed consolidated statements of cash flows for the three months ended March 31, 2007 and 2006 (unaudited)(thousands of US dollars) For the three For the three months ended months ended March 31, 2007 March 31, 2006CASH FLOWS FROM OPERATING ACTIVITIESNet income 456,617 545,903Adjustments to reconcile net income to net cash providedby operating activities:Minority interest 6,838 4,819Depreciation and amortization 102,342 73,701Loss on disposals of property, plant and equipment 12,609 1,492Losses / (gains) on investments, net 1,492 (383,759)Equity in net earnings of associate (10,180) (483)Deferred income tax expense / (benefit) 40,613 (6,857)Gain on loan restructuring (30,028) -Accretion expense on asset retirement obligations 6,019 -Other movements (2,591) 14,867Changes in operating assets and liabilitiesIncrease in accounts receivable (135,520) (24,790)(Increase) / decrease in inventories (24,596) 22,158(Increase) / decrease in other current assets (28,776) 4,317Increase in loans provided by the subsidiary bank (1,277) (19,673)Increase / (decrease) in accounts payable and other 79,082 (59,742)liabilitiesDecrease in current income tax payable (13,334) (12,862) Net cash provided by operating activities 459,310 159,091 CASH FLOWSFROM INVESTING ACTIVITIESAcquisition of subsidiary, net of cash acquired of $1,264 - (59,365)Proceeds from adjustment of the original purchase price of 37,124 -subsidiariesProceeds from sale of property, plant and equipment 1,690 2,744Purchases and construction of property, plant and (173,196) (91,193)equipmentProceeds from sale of investments 3,719 402,728Purchases of investments (35,079) (27,948)Movement of restricted cash (766) 96 Net cash (used in) / received from investing activities (166,508) 227,062 CASH FLOWSFROM FINANCING ACTIVITIESProceeds from borrowings and notes payable 22,689 8,096Repayment of borrowings and notes payable (170,343) (14,870)Capital lease payments (739) -Proceeds from disposal of assets to the company under 78,469 -common controlPayments to controlling shareholders for common control - (104,000)transfer of interests in subsidiaryDividends to shareholders (346) (398) Net cash used in financing activities (70,270) (111,172) Cash included in assets, held for sale (136) - Net increase in cash and cash equivalents 222,396 274,981Effect of exchange rate changes on cash and cash 10,700 72,135equivalentsCash and cash equivalents at the beginning of the period 665,213 1,924,148 Cash and cash equivalents at the end of the period 898,309 2,271,264 Interim condensed consolidated statements of stockholders' equity andcomprehensive income for the three months ended March 31, 2007 and 2006(unaudited) (thousands of US dollars) Common Statutory Additional Accumulated Retained Total stock reserve paid-in other earnings stockholders' capital comprehensive equity incomeBalance at 221,173 10,267 1,812 72,129 4,809,094 5,114,475December 31, 2005 Comprehensive income: Net income - - - - 545,903 545,903 Other comprehensive income: Net unrealized gain on a - - - (1,201) - (1,201)change in valuation ofinvestments Cumulative translation - - - 194,346 - 194,346adjustment Comprehensive income 739,048 Payments to controlling - - - - (104,000) (104,000)shareholders for commoncontrol transfer of interestsin subsidiary Balance at 221,173 10,267 1,812 265,274 5,250,997 5,749,523March 31, 2006 Balance at 221,173 10,267 1,812 589,986 5,986,204 6,809,442December 31, 2006 Comprehensive income: Net income - - - - 456,617 456,617 Other comprehensive income: Cumulative translation - - - 89,702 - 89,702adjustment Comprehensive income 546,319 Earnings from disposal of - - 50,583 - - 50,583assets to the company undercommon control Balance at 221,173 10,267 52,395 679,688 6,442,821 7,406,344March 31, 2007 For further information: NLMKAnton Bazulev +7 495 915 1575 Financial DynamicsJon Simmons +44 207 831 3113 This information is provided by RNS The company news service from the London Stock Exchange