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. Last Updated: 07/27/2016

UES Announces Profit Jump, ADR Issue, Bond Issue Delay




Russia's national electricity company Unified Energy System posted a sharp jump in pretax profits for the first nine months of the year Monday.


UES said it had launched an American Depository Receipt program in November without telling shareholders, and said it was putting off a long-awaited convertible bond issue until market conditions improved.


"The company issued level-one ADRs in the middle of November," said Pavel Shabanov, head of investor relations. "We have postponed the convertible bond launch until there is an improvement in the situation on financial markets."


UES, Russia's biggest company by sales and work force, said pretax profits to Russian accruals-based accounting standards rose to 4.09 trillion rubles ($681 million) in the first nine months of the year from 516.21 billion rubles last year.


Sales in the same period rose to 7.55 trillion rubles from 6.26 trillion rubles for the first three quarters of 1996.


Shabanov said the rise in profits was linked to a change in accounting procedures under which investments were counted under profits rather than costs.


Dealers said UES shares, which rose to $0.2760 on Monday from Friday's $0.2590 close, were affected little by the profit statement or the ADR and convertible bond news, rising in line with other Russian shares.


"There was movement upwards but it rose with the rest of the market," United City Bank senior trader Samit Yakovlev said.


The bond issue, which was originally scheduled for November or December, is intended to raise funds to help modernize the company's operations.