Six months 2003 US GAAP interim financial results

Six months 2003 US GAAP interim financial results November, 2003 Moscow 1

Income Statement Highlights $mln Six months 2003 2002 % Sales 215. 7 202. 9 106% Gross margin 61. 2 54. 6 112% EBITDA 24. 5 35. 4 69% EBIT 10. 4 24. 8 42% EBT 14. 8 16. 1 92% Net Income 14. 1 4. 6 307% 2

Analysis of changes in Income statement including $mln Sales Six months 2003 Organic component Acquisition (excluding effect component of provisions) Six months 2002 (excluding effect of provisions) Changes (organic componen t. Six months 2002) 215. 7 182. 1 33. 6 202. 9 (20. 8) Gross margin 61. 2 54. 6 6. 6 54. 6 - EBITDA 24. 5 23. 7 (0. 2) 27. 5 (3. 8) EBIT 10. 4 12. 9 (3. 5) 16. 8 (3. 9) 3

Analysis of changes in EBITDA Changes (organic componen Six months t 2002 Acquisition Six component months 2002) including $mln Six months 2003 Organic component EBITDA 24. 5 24. 7 (0. 2) 35. 4 (10. 7) Gross margin 61. 2 54. 6 6. 6 54. 6 - G&A and S&D (51. 2) (41. 7) (9. 5) (37. 7) (4. 0) 14. 0 10. 8 3. 2 10. 6 0. 2 0. 5 1 (0. 5) 7. 9 (6. 9) Depreciation and amortization Provisions 4

Segmentation – key results $mln OILEQ MINEQ STEEL NPPEQ SHIP MMS Other Intersegment sales Total Sales, six months 2003 37. 8 23. 9 50. 2 37. 0 44. 7 62. 1 23. 9 (63. 9) 215. 7 Gross Margin, six months 2003 31% 22% 34% 16% 15% 19% 28% Sales, six months 2002 39. 1 18. 1 61. 5 37. 1 24. 0 105. 6 26. 0 (108. 5) 202. 9 Gross Margin, six months 2002 25% 19% 15% 38% 13% 27% 11% 5

Change in sales by segment $mln O&G equipment NPP equipment %Shipbuilding Mining equipment Special Steel Machinery manufacturing services Other Intersegment sales Total Six months 2003 Six months 2002 Change, % Change structure 37. 8 39. 1 (1. 3) (3. 3%) (10. 2%) 37. 0 37. 1 (0. 1) 0% (0. 8%) 44. 7 24. 0 20. 7 86. 3% 161. 7% 23. 9 18. 1 5. 8 32. 0% 45. 3% 50. 2 61. 5 (11. 3) (18. 4%) (88. 3%) 62. 1 105. 6 (43. 5) (41. 2%) (339. 8%) 23. 9 26. 0 (2. 1) (8. 1%) (16. 4%) (63. 9) (108. 5) 44. 6 41. 1% 348. 4% 215. 7 202. 9 12. 8 6. 3% 100. 0% 6

Change in gross margin by segment $mln. O&G equipment NPP equipment Shipbuilding Mining equipment Special Steel Machinery manufacturing services Other Total Six months 2003 Six months 2002 Change, % Change structure 11. 9 9. 7 2. 2 22. 7% 33. 3% 12. 7 14. 1 (1. 4) (9. 9%) (21. 2%) 7. 2 3. 0 4. 2 140. 0% 63. 6% 4. 9 3. 4 1. 5 44. 1% 22. 7% 10. 9 9. 0 1. 9 21. 1% 28. 8% 9. 0 11. 9 (2. 9) (24. 4%) (43. 9%) 4. 6 3. 5 1. 1 (31. 4%) 16. 7% 61. 2 54. 6 6. 6 12. 1% 100. 0% 7

Change in EBITDA by segment $mln. Six months 2003 Six months 2002 Change, % Change structure 3. 2 7. 1 (3. 9) (54. 9%) 35. 8% 7. 1 7. 3 (0. 2) (2. 7%) 1. 8% 4. 0 1. 2 2. 8 233. 3% (25. 7%) 0. 7 0. 5 0. 2 40. 0% (1. 8%) 9. 0 7. 4 1. 6 21. 6% (14. 7%) O&G equipment NPP equipment Shipbuilding Mining equipment Special Steel Machinery manufacturing services Other 5. 1 14. 1 (9) (63. 8%) 82. 6% (4. 6) (2. 2) (2. 4) (109. 1%) 22. 0% Total 24. 5 35. 4 (10. 9) (30. 8)% 100. 0% 8

Profitability Six months 2003 2002 Sales, $ mln 215. 7 202. 9 Gross margin 28. 4% 26. 9% EBITDA 11. 4% 17. 4% EBIT 4. 8% 12. 2% Net Income 6. 5% 2. 3% 9

Balance Sheet Highlights Six months 2003 Six months 2002 Change Current Assets 477. 3 346. 0 131. 3 38% Total Assets 784. 0 592. 5 191. 5 32% Current Liabilities 381. 6 283. 7 97. 9 35% Total Liabilities 573. 1 394. 0 179. 1 45% NWC 95. 7 62. 3 33. 4 54% $mln % 10

Key Ratios Six months 2003 2002 Current ratio Quick ratio NWC to Total Assets Total Liabilities to Total Assets Turnover (days) Assets Inventories Trade accounts receivable NWC 1. 25 0. 17 12% 1. 07 0. 26 4% 73% 582 215 37 67 472 200 40 15 11

Income statement net of non-cash effect Six months 2003 Six months 2002 Income after taxes and minority interest 14 148 4 590 Minority interest (2 518) 2 586 Deferred tax 1 599 5 379 Operating provisions (475) (6 442) Non-operating provisions (556) - Deferred payment* 3 066 3 206 Minority interest on deferred payment (752) (786) Total adjusted net income 14 472 8 533 Depreciation 13 001 11 305 Net income + Depreciation 27 473 19 838 $th * represented payment for NPPE that is due upon the commissioning of the respective power plants 12

SG&A $th 6 months 2003 2002 Change Selling 5 623 5 486 137 2. 5% G&A 45 625 32 233 13 392 41. 5% Total 51 248 37 719 13 529 36% 13

G&A expenses ($th) Total 6 months 2003 G&A expenses Organic component Acquisition component 45 625 37 537 8 088 Organic component items Payroll Unified Social Tax Road User’s Tax Rent of land (or land tax) Depreciation Property insurance Repairs & maintenance Utilities Other Total organic component Six months 2003 13 416 4 270 1 758 829 2 206 2 543 9 348 3 164 37 537 Six months 2002 9 762 3 222 2 096 1 269 577 1 839 2 159 8 350 2 958 32 233 Change 3 654 1 048 (2 096) 489 252 367 384 998 206 5 303 37% 33% (100%) 39% 44% 20% 18% 12% 7% 16% Change structure 69% 20% (40%) 9% 5% 7% 7% 19% 4% 100% 14

Selling expenses ($th) Total 6 months 2003 Selling expenses Organic component Acquisition component 5 623 4 243 1 380 Organic component items Transport / customs / packaging / commission Advertising Other Total organic component Six months 2003 Six months 2002 Change structure Change 3 135 4 123 (988) (24%) 79% 35 27 8 30% (1%) 1 073 1 336 (263) (27%) 21% 4 243 5 486 (1 243) (23%) 100% 15

Debt dynamics Six months 2003 Year-end 2002 Six months 2002 88. 4** 61. 1* 32. 2 Short-term debt 54. 1 53. 3 48. 4 Current portion of long-term debt 4. 1 3. 7 5. 2 146. 6 118. 1 85. 8 $mln Long-term debt (incl. non-convertible bonds) Total debt Interest expense 8. 5 6. 0 Capitalized interest 0. 9 0. 5 Interest coverage EBITDA / (Interest expense+Capitalized interest) 2. 6 5. 4 * Increase in long term debt due to CLN issuance ** Increase in long term debt due to issuance of non-convertible bonds 16

Effective interest rate $mln Six months 2003 Six months 2002 131. 1 74. 8 Interest expense 8. 5 6. 0 Capitalized interest 0. 9 0. 5 14% 17% Average debt Effective interest rate 17

Trade a/c receivable, payable & advances $mln Short-term trade a/c receivable Year 2002 ASE adj Year 2002 Adjusted Six months 2003 Change % 54. 6 (9. 4) 45. 2 34 (25%) 2. 9 9. 4 12. 3 19. 5 59% 13. 5 (13. 5) - 3. 9 100% 2. 4 13. 5 15. 9 15. 3 (4%) Short-term trade a/c payable 32. 3 (3. 2) 29. 1 33. 4 15% Advances received * 91. 1 (40. 6) 50. 5 105. 5 109% 5. 1 43. 8 48. 9 78. 5 61% Due from related parties Long-term trade a/c receivable Due from related parties, long-term Due to related parties** * Increase is due to advances for a diesel submarine for The Chinese Navy **Increase is due to advances received from Atomstroyexport 18

Inventory Six months 2003 Six months 2002 75. 2 61. 5 13. 7 22% 35% 99 83. 6 15. 4 18% 39% 50. 7 41. 2 9. 5 23% 24% Total inventories, at cost 224. 9 186. 3 38. 6 21% 97% Provision for obsolete inventories (23. 5) (24. 4) 0. 9 (4%) 2% Total inventories, net 201. 4 161. 7 39. 7 $mln Materials and spare parts Work-in-progress Finished goods Change, % Change structure 25% 100% 19

Other current assets ($mln) Six months 2003 Taxes receivable 54. 7 Other current assets 29. 3 Total 84. 0 20

Plant and equipment ($mln) PPE as of December 31, 2002 201. 4 Cumulative translation adjustment 9. 1 PP&E of new subs (excl. effect of allocation of negative goodwill) 1. 4 Additions 16. 8 Disposals (8. 3) Depreciation for the year (13. 0) Other PPE as of June 30, 2003 0. 5 207. 9 21

Subsequent events - acquisitions Company Volgograd Shipbuilding Plant OAO CKB Korall Acquisition date, 2003 July and October Consideration ($th) Ownership 4 842 Increased from 18. 96% to 69. 23% 2 501 Increased from 30. 40% to 92. 91% 22