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. Last Updated: 07/27/2016

OGK-5 Sees Net Profits Up 11%

Power producer OGK-5, controlled by Italy's Enel, reported an 11 percent rise in 2008 net profits on Wednesday and warned that electricity prices must rise if it is to maintain investment.

The results under International Financial Reporting Standards showed that net profits rose to 1.63 billion rubles ($48.34 million) in 2008 from 1.47 billion rubles in the previous year. Revenues grew 28 percent to 42.8 billion rubles from 33.5 billion rubles in 2007.

The company said the growing demand for power in 2008 and progress in the liberalization of state-set power prices was behind the high revenue growth.

It added, however, that regulated electricity tariffs must be allowed to rise further to let OGK-5 renew ageing technology.

"Tariffs may not consistently allow for an adequate return on investment and currently do not provide sufficient funds for the full replacement of property, plant and equipment," it said.

Russia plans to gradually allow the price of power to reach market levels by 2011 under a sweeping reform of the sector. But some government officials have signaled that the plan may need to be revised as Russia seeks to control costs for companies and families hit by the financial crisis.

OGK-5 also said it secured a one-year loan facility for 2.5 billion rubles ($74.14 million) from Sberbank.