OREANDA-NEWS. April 22, 2010. FGC held a meeting for analysts. Below are the key takeaways, reported the press-centre of OTKRITIE Financial Corporation.

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FGC’s RAS revenues were up 24% YoY reaching RUB85bn in 2009. EBITDA increased by 26% up to RUB40.4bn, demonstrating EBITDA Margin of 47.5%. Paper loss amounted to RUB60bn due to a one-time impairment loss, but we expect to see 3x growth in net income YoY up to RUB15bn in 2009 IFRS results.

FGC plans to have its GDRs listed in London or Frankfurt not later than 2011.
FGC’s 2010-2012 investment program amounts to RUB519bn, around 30% of it will be financed by debt issuance at a cost of around 7.5%. Currently, FGC is significantly underleveraged and its total debt-to-EBITDA ratio amounts to 0.3x. The company is also working on cashing out of the stakes in the generation companies it holds on its balance sheet in the near future.

The company is considering switching to a 5-year RAB-system during the current 3-year period which will end in 2012. This would allow the company to increase its transparency and its cash flow predictability. It would also make it possible for the company to borrow more and at a lower cost.

Valuation: FGC currently trades at an EV/RAB multiple of 0.63x, which is below the EM electricity transmission companies average of 1.2x.

Action: We do not cover FGC stock at this point, but overall find the meeting with the analysts positive and expect the stock to show some positive reaction.