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Russia’s Atomenergomash may lose 3% of revenues amid developments in Ukraine

June 09, 2014, 19:50 UTC+3 MOSCOW

When the company’s business plan was prepared for 2014, risks linked with the Ukrainian crisis were not envisaged

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© ITAR-TASS/Donat Sorokin

MOSCOW, June 09. /ITAR-TASS/. Atomenergomash, the engineering division of Russian state-owned Rosatom civil nuclear power corporation, estimates the risk of revenue loss over the Ukraine developments at 1.6 billion rubles ($46 million), Atomenergomash CEO Andrei Nekipelov said on Monday.

The company expects revenues of 53.5-54 billion rubles ($1.5-1.6 billion) this year and, consequently, losses over the Ukrainian events may amount to 3% of total earnings, he said.

Atomenergomash, which participates jointly with the Ukrainian energy equipment manufacturer Turboatom in the modernization of Ukraine’s thermal power sector, may lose about 600 million rubles ($17 million) under the deliveries of thermal power equipment, Nekipelov said.

Atomenergomash’s Ukrainian subsidiary, Energomashspetsstal, the largest producer of semi-finished metallurgical products for nuclear power machine-building, transport industry and other sectors in the CIS countries, may fall short of another 1 billion rubles ($29 million), the CEO said.

“From the standpoint of thermal power engineering, we are running the risk of losing about 600 million rubles. With regard to Energomashspetsstal, we have no doubts that the enterprise will fulfill all its obligations in the order book. But the point is that our orders constitute about 25-30% of the total capacity utilization at Energomashstpetsstal while a part of orders comes from Ukrainian companies,” Nekipelov said.

Atomenergomash’s Ukrainian division is currently operating and dispatching products on time, the CEO said. “Since the beginning of the year, we have not had a single product that we have failed to supply to our customers.”

When the company’s business plan was prepared for 2014, risks linked with the Ukrainian crisis were not envisaged, Nekipelov said.

“The current situation in Ukraine does not allow any energy company to plan even within the existing projects adopted as part of the corporate strategy and investment plan, to say nothing of long-term plans,” the Atomenergomash CEO said.

“We actually find ourselves in the situation when we have to suspend the contract on the Starobeshevo heat and power plant [in the east Ukrainian Donetsk Region] on the request of our customer,” he said.

Atomenergomash specializes in the designing, production, supply, assembly and maintenance of equipment for nuclear and thermal electric power plants, as well as for enterprises in the gas and petrochemical industry.

The group unites about 30 large Russian and foreign companies, including production facilities, engineering centers and R&D institutes.

Atomenergomash has not yet published its financial statements for 2013. According to Nekipelov, the group’s revenues totaled 46.5 billion rubles ($1.3 billion) last year. In 2012, the group reported earnings of 51.8 billion rubles ($1.5 billion), with about a half of these revenues coming from the delivery of nuclear power equipment.

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