FederalGrid Announces Q12012 RAS Financial Results

Federal Grid Company Announces Q1 2012 RAS Financial Results

 Moscow, 3 May 2012 - Federal Grid Company of Unified Energy System ("Federal Grid Company" or "the Company") (MICEX-RTS, LSE: FEES), announces its financial results for Q1 2012 in accordance with Russian Accounting Standards (RAS).

 These results exclude the accounts of Federal Grid Company's subsidiaries and affiliated companies, which operate as independent legal entities.

 Key Financials:

 *Excluding the creation and recovery of loan loss provisions

 The Company's revenue for Q1 2012 decreased by 7% year on year (y-o-y) to RUB 33,965 million. This was primarily due to a decrease in the tariff for electricity transmission services compared to Q1 2011 in connection with the smoothing of Federal Grid's tariff revenue introduced on 1 April 2011.

Operating costs including administrative expenses for Q1 2012 increased by 38% y-o-y to RUB 26,609 million. This was primarily due to the fact that depreciation charges increased by RUB 5,059 million (53% y-o-y) in connection with the commissioning of new facilities, as well as to an increase in serviced equipment.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased in Q1 2012 by 26% y-o-y to RUB 22,284 million. The decline in EBITDA was primarily due to a lower profit before tax for the period, which was the result of the decreased tariff for electricity transmission services.

Federal Grid Company's other income in Q1 2012 decreased by 5.1x compared to Q1 2011 and equalled RUB 21,362 million, primarily due to the effect from the exchange of shares in generating companies for shares in INTER RAO UES that was reflected in Q1 2011.

The Company's other costs in Q1 2012 decreased by 4.4x y-o-y to RUB 23,943 million, also due to the Q1 2011 accounting effect from the transaction with INTER RAO UES.

Federal Grid's net profit for Q1 2012 was RUB 2,910 million. The Company's corrected net profit (excluding the effect from creation and recovery of loan loss provisions) was RUB 5,206 million.

Balance Sheet as of 31 March 2012

Federal Grid Company's total assets increased by 1%, or RUB 10,991 million, during the reporting period and reached RUB 1,048,484 million at the end of Q1 2012. This includes non-current assets of RUB 935,536 million and current assets of RUB 112,948 million.

Non-current assets grew by RUB 16,035 million, or 2%, during Q1 2012. This was primarily due to an increase in construction in progress that is part of the Company's investment programme.

Current assets decreased by RUB 5,044 million, or 4%, in the first three months of 2012. This was due to a decrease in short-term financial investments resulting from the redemption of promissory notes for financing of the Company's investment programme.

Federal Grid Company's long-term debt (loans and borrowings) amounted to RUB 130,000 million as of 31 March 2012.

The Company's short-term obligations increased by RUB 6,294 million, or 14%. This was due mainly to an increase in accounts payable to suppliers and contractors, as well as greater advances received from counterparties.

Federal Grid Company's financial statements for Q1 2012 under RAS can be found on the Company's website: http://www.fsk-ees.ru/eng/investors/financial_disclosure/ras_financial_reports/ and at http://www.morningstar.co.uk/uk/NSM.

Enquiries:

About Federal Grid Company

Federal Grid Company is the operator and manager of Russia's unified electricity transmission grid system, including high voltage transmission lines, and holds the status of a natural monopoly.

The Company's assets include over 124,000 km of transmission lines and 854 substations with over 322 GVA of 35-750 volt transformer capacity. Based on the length of transmission lines and installed transformer capacity, Federal Grid is the largest publicly traded electricity transmission company in the world.

Federal Grid's business is to provide electricity transmission and technological connection services. It maintains and develops the grid system and supervises grid facilities and infrastructure in 73 regionsof Russia, covering a territory of 13.6 million square kilometres. Its customers are regional distribution companies, electricity suppliers and large industrial enterprises.

Since 1 January 2010, Federal Grid has operated under a 5-year regulatory asset base (RAB) model.

The Company was incorporated in June 2002 as part of reorganisation of Russia's electrical power industry. The largest shareholder, with a 79.55% stake, is the Russian Federation Government.

Federal Grid Company's ordinary shares are listed on the MICEX-RTS stock exchange under the ticker FEES and the Company's GDRs are traded on the London Stock Exchange under the same FEES symbol. The Company's shares are included in the MSCI Emerging Markets and MSCI Russia indices.

In 2011 the Company's IFRS revenue for 2011 was RUB 139,571 million (up 23% compared to 2010), adjusted EBITDA as RUB 83,760 million (a 24% increase from 2010), and adjusted net profit was RUB 38,241 million (up 37% on 2010).

Further information can be found at www.federal-grid.com