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

2. 2 2 Income Statement Highlights $mln Six months 2003 Six months 2002 % Sales215.7202.9 106% Gross margin61.254.6 112% EBITDA24.535.4 69% EBIT10.424.8 42% EBT14.816.1 92% Net Income14.14.6 307%

3. 3 3 Analysis of changes in Income statement $mln Six months 2003 including Six months 2002 (excluding effect of provisions) Changes (organic component - Six months 2002) Organic component (excluding effect of provisions) Acquisition component Sales215.7182.133.6202.9(20.8) Gross margin 61.254.66.654.6 - EBITDA24.523.7(0.2)27.5(3.8) EBIT10.412.9(3.5)16.8(3.9)

4. 4 4 Analysis of changes in EBITDA $mln Six months 2003 including Six months 2002 Changes (organic component - Six months 2002) Organic component Acquisition component EBITDA 24.524.7(0.2)35.4(10.7) Gross margin 61.254.66.654.6 - G&A and S&D (51.2)(41.7)(9.5)(37.7)(4.0) Depreciation and amortization 14.010.83.210.60.2 Provisions 0.51(0.5)7.9(6.9)

5. 5 5 Segmentation – key results $mln OILEQ MINEQ STEEL NPPEQ SHIPMMS Other Intersegment sales Total Sales, six months 2003 37.823.950.237.044.762.123.9(63.9)215.7 Gross Margin, six months 2003 31%21%22%34%16%15%19%28% Sales, six months 2002 39.118.161.537.124.0105.626.0(108.5)202.9 Gross Margin, six months 2002 25%19%15%38%13%11%13%27%

6. 6 6 Change in sales by segment $mln Six months 2003 Six months 2002 Change Change, % Change structure O&G equipment 37.839.1(1.3)(3.3%)(10.2%) NPP equipment 37.037.1(0.1)0%(0.8%) %Shipbuilding44.724.020.786.3%161.7% Mining equipment 23.918.15.832.0%45.3% Special Steel50.261.5(11.3)(18.4%)(88.3%) Machinery manufacturing services 62.1105.6(43.5)(41.2%)(339.8%) Other23.926.0(2.1)(8.1%)(16.4%) Intersegment sales (63.9)(108.5)44.641.1%348.4% Total215.7202.912.86.3%100.0%

7. 7 7 Change in gross margin by segment $mln. Six months 2003 Six months 2002 Change Change, % Change structure O&G equipment 11.99.72.222.7%33.3% NPP equipment 12.714.1(1.4)(9.9%)(21.2%) Shipbuilding 7.23.04.2140.0%63.6% Mining equipment 4.93.41.544.1%22.7% Special Steel 10.99.01.921.1%28.8% Machinery manufacturing services 9.011.9(2.9)(24.4%)(43.9%) Other 4.63.51.1(31.4%)16.7% Total 61.254.66.612.1%100.0%

8. 8 8 Change in EBITDA by segment $mln. Six months 2003 Six months 2002 ChangeChange, % Change structure O&G equipment 3.27.1(3.9)(54.9%)35.8% NPP equipment 7.17.3(0.2)(2.7%)1.8% Shipbuilding4.01.22.8233.3%(25.7%) Mining equipment 0.70.50.240.0%(1.8%) Special Steel9.07.41.621.6%(14.7%) Machinery manufacturing services 5.114.1(9)(63.8%)82.6% Other(4.6)(2.2)(2.4)(109.1%)22.0% Total24.535.4(10.9)(30.8)%100.0%

9. 9 9 Profitability Six months 2003 Six months 2002 Sales, $ mln215.7202.9 Gross margin28.4%26.9% EBITDA11.4%17.4% EBIT4.8%12.2% Net Income6.5%2.3%

10. 10 Balance Sheet Highlights $mln Six months 2003 Six months 2002 Change% Current Assets477.3346.0131.338% Total Assets784.0592.5191.532% Current Liabilities 381.6283.797.935% Total Liabilities573.1394.0179.145% NWC95.762.333.454%

11. 11 Key Ratios Six months 2003 Six months 2002 Current ratio1.251.07 Quick ratio0.170.26 NWC to Total Assets12%4% Total Liabilities to Total Assets 73% Turnover (days) Assets582472 Inventories215200 Trade accounts receivable3740 NWC6715

12. 12 Income statement net of non-cash effect $th Six months 2003 Six months 2002 Income after taxes and minority interest14 1484 590 Minority interest(2 518)2 586 Deferred tax1 5995 379 Operating provisions(475)(6 442) Non-operating provisions(556)- Deferred payment*3 0663 206 Minority interest on deferred payment(752)(786) Total adjusted net income14 4728 533 Depreciation13 00111 305 Net income + Depreciation27 47319 838 * represented payment for NPPE that is due upon the commissioning of the respective power plants

13. 13 SG&A $th 6 months 2003 6 months 2002 Change Selling5 6235 4861372.5% G&A45 62532 23313 39241.5% Total51 24837 71913 52936%

14. 14 G&A expenses ($th) Total 6 months 2003 G&A expenses Organic component Acquisition component 45 62537 5378 088 Organic component items Six months 2003 Six months 2002 Change Change structure Payroll13 4169 7623 65437%69% Unified Social Tax4 2703 2221 04833%20% Road User’s Tax-2 096(2 096)(100%)(40%) Rent of land (or land tax)1 7581 26948939%9% Depreciation82957725244%5% Property insurance2 2061 83936720%7% Repairs & maintenance2 5432 15938418%7% Utilities9 3488 35099812%19% Other3 1642 9582067%4% Total organic component37 53732 2335 30316%100%

15. 15 Selling expenses ($th) Total 6 months 2003 Selling expenses Organic component Acquisition component 5 6234 2431 380 Organic component items Six months 2003 Six months 2002 Change Change structure Transport / customs / packaging / commission 3 1354 123(988)(24%)79% Advertising3527830%(1%) Other1 0731 336(263)(27%)21% Total organic component 4 2435 486(1 243)(23%)100%

16. 16 Debt dynamics $mln Six months 2003 Year-end 2002 Six months 2002 Long-term debt (incl. non-convertible bonds) 88.4**61.1*32.2 Short-term debt54.153.348.4 Current portion of long-term debt4.13.75.2 Total debt146.6118.185.8 Interest expense8.56.0 Capitalized interest0.90.5 Interest coverage EBITDA / (Interest expense+Capitalized interest) 2.65.4 * Increase in long term debt due to CLN issuance ** Increase in long term debt due to issuance of non-convertible bonds

17. 17 Effective interest rate $mlnSix months 2003Six months 2002 Average debt131.174.8 Interest expense8.56.0 Capitalized interest0.90.5 Effective interest rate14%17%

18. 18 Trade a/c receivable, payable & advances * Increase is due to advances for a diesel submarine for The Chinese Navy **Increase is due to advances received from Atomstroyexport * Increase is due to advances for a diesel submarine for The Chinese Navy **Increase is due to advances received from Atomstroyexport $mln Year 2002 ASE adj Year 2002 Adjusted Six months 2003 Change % Short-term trade a/c receivable 54.6(9.4)45.234(25%) Due from related parties2.99.412.319.559% Long-term trade a/c receivable 13.5(13.5)-3.9100% Due from related parties, long-term 2.413.515.915.3(4%) Short-term trade a/c payable 32.3(3.2)29.133.415% Advances received *91.1(40.6)50.5105.5109% Due to related parties**5.143.848.978.561%

19. 19 Inventory $mln Six months 2003 Six months 2002 Change Change, % Change structure Materials and spare parts 75.261.513.722%35% Work-in-progress9983.615.418%39% Finished goods50.741.29.523%24% Total inventories, at cost 224.9186.338.621%97% Provision for obsolete inventories (23.5)(24.4)0.9(4%)2% Total inventories, net201.4161.739.725%100%

20. 20 Other current assets ($mln) Six months 2003 Taxes receivable54.7 Other current assets29.3 Total84.0

21. 21 Plant and equipment ($mln) PPE as of December 31, 2002201.4 Cumulative translation adjustment9.1 PP&E of new subs (excl. effect of allocation of negative goodwill) 1.4 Additions16.8 Disposals(8.3) Depreciation for the year(13.0) Other0.5 PPE as of June 30, 2003207.9

22. 22 Subsequent events - acquisitions Company Acquisition date, 2003 Consideration ($th) Ownership Volgograd Shipbuilding Plant July and October 4 842 Increased from 18.96% to 69.23% OAO CKB Korall October2 501 Increased from 30.40% to 92.91%