Analysis of financial status and performance

History

The financial ratios of JSC “MOESK” for 2011 demonstrate the Company’s stable financial position.

Indicator Dec 31, 2009 Dec 31, 2010 Dec 31, 2011
Net asset value, mln rubles 120,152 140,452 155,178
Ratio of borrowed funds to capital and reserves, % 108.60 77.79 71.14
Debt servicing payment coverage, % 18.50 40.66 56.03
Receivables turnover, times 1.73 2.37 2.72
Level of overdue accounts payable, % 37.10 23.26 20.98
Return on assets, % 2.52 6.26 6.42
Return on equity, % 5.26 11.12 10.99
Current liquidity ratio 0.47 0.40 0.55
Quick ratio 0.41 0.34 0.47
Equity-assets ratio (standard no less than 0.5-0.6) 0.48 0.56 0.58
Debt-equity ratio 0.92 1.29 1.41

As of December 31, 2011, the value of the Company’s net assets was 155,178 million rubles. The increase in value of 14,726 million rubles from the previous year is a positive indication of the Company’s activities.

Liquidity assessment

The quick ratio represents the ratio of the most liquid part of the current assets versus short-term liabilities. The ratio stood at 0.47 as of December 31, 2011. The current liquidity ratio shows the adequacy of the Company’s funds that may be used to repay short-term liabilities. This ratio stood at 0.55 as of December 31, 2011.

The increase in these indicators compared to the previous year is attributable to a reduction in short-term liabilities combined with growth in the liquid part of the Company’s current assets. The decline in short-term liabilities resulted from the Company performing its obligations under grid connection agreements.

Financial stability assessment

The equity-assets ratio indicates the share of the Company’s equity capital in its overall assets. This ratio increased over the reporting period and stood at 0.58 as of December 31, 2011.

The ratio of borrowed funds to capital and reserves decreased compared with the previous year and totaled 71.14%.

The debt-equity ratio increased and stood at 1.41 on December 31, 2011.

The dynamics in these indicators are the result of an increase in the size of equity capital, which demonstrates the Company’s financial stability.

Operating profitability assessment

The return on equity indicator, which demonstrates the efficiency of the use of capital, totaled 10.99% in 2011. The change in this figure compared to 2010 resulted from an increase in equity capital.

The return on assets indicator, which describes the efficiency of the use of the Company’s assets for the purpose of generating profit, totaled 6.42% in 2011. The increase in this indicator compared to the previous year is attributable to growth in the Company’s assets, specifically growth in fixed assets, and demonstrates the increased efficiency of the Company’s activities.

The debt servicing payment coverage indicator increased and stood at 56.03% at the end of 2011. This figure indicates the Company’s ability to meet its liabilities from net profit as follows: for every 100 rubles of liabilities (including interest on liabilities) approximately 56 rubles are covered by net profit from the reporting period and depreciation accrued over the reporting period.

The level of overdue accounts payable decreased during the reporting period compared to 2010 (23.3%) and stood at 20.98% on December 31, 2011.

Receivables turnover increased compared to the previous year due to growth in revenue over the reporting period and was 2.72 times on the last day of 2011.