Moscow utility Mosenergo posted a net loss of 3.393 billion rubles ($109 million) in the first three quarters of 2002 compared with a 1.686 billion ruble profit for the same period last year, the company said in a statement Thursday.

The accounts were calculated to Russian accounting standards.

Arkady Yevstafyev, Mosenergo general director, said two months ago that the company would achieve its forecasted net profit of 709 million rubles by the end of the year.

Despite the loss, Mosenergo's shares rose 2.2 percent to $0.0325.

The company had revenues of 33.796 billion rubles in the first three quarters, a 6 percent increase compared to the same period last year, when it was under different management.

Analysts said the poor results were expected.

Mosenergo is conducting an asset revaluation, which resulted in a corresponding increase in its depreciation charge, Renaissance Capital said in a report. The company also is carrying out repair and maintenance, and the $14 million initially planned for the program was incurred in September rather than in October.

Furthermore, the second and the third quarters are normally the weakest in the power sector, with demand rising significantly in the fourth quarter, Renaissance said.

"There is nothing surprising," said Alexander Korchagin, an analyst at Prospect, who added that low energy tariffs have also brought down profits.

"We have no doubts that by the end of the year the company will post a profit," he said. Renaissance also said Mosenergo would meet its profit target.

(The Moscow Times 01.xi.02)