PAVA Increases Return on Equity by 69.7%

Upgrade of PAVA’s mills was another factor improving ROE. According to the modernization plan, most of which had been implemented in H1 2008, the company managed to achieve a considerable cost reduction per 1 tonne of processed grain. Investments were calculated so that the breakthrough period would not exceed 6 months.

05/02/09 According to Q3 2008 results, OJSC PAVA demonstrated 69.7% growth of return on equity compared to the same period last year. The growth was achieved not least due to the net earnings increase of 92.86% over the given period. This dynamics is accounted for by enlarged sales volume and favourable price situation. In early 2008 the price for high-grade flour was relatively low - RUR8,300 per tonne; in April it already reached RUR11,460 and remained firm during three months. The price began to decline slowly since July, however by the end of Q3 it never went lower than RUR9,680 per tonne.

First-grade flour market was characterized by similar tendencies. At the beginning of the year prices stood at RUR7,380 per tonne, while since mid-Q2 until Q3 it fluctuated in the range of RUR10,210- 11,210 per tonne.

Owing to increased presence abroad as well as on the domestic market, PAVA recorded a steady rise in sales during three quarters of 2008.

Upgrade of PAVA’s mills was another factor improving ROE. According to the modernization plan, most of which had been implemented in H1 2008, the company managed to achieve a considerable cost reduction per 1 tonne of processed grain. Investments were calculated so that the breakthrough period would not exceed 6 months.

There was also an upward trend in ROE dynamics against Q2 results with the growth by 18.2%.