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

2 2 Income Statement Highlights $mln Six months 2003 Six months 2002 % Sales % Gross margin % EBITDA % EBIT % EBT % Net Income %

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 Sales (20.8) Gross margin EBITDA (0.2)27.5(3.8) EBIT (3.5)16.8(3.9)

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 (0.2)35.4(10.7) Gross margin G&A and S&D (51.2)(41.7)(9.5)(37.7)(4.0) Depreciation and amortization Provisions 0.51(0.5)7.9(6.9)

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

6 6 Change in sales by segment $mln Six months 2003 Six months 2002 Change Change, % Change structure O&G equipment (1.3)(3.3%)(10.2%) NPP equipment (0.1)0%(0.8%) %Shipbuilding %161.7% Mining equipment %45.3% Special Steel (11.3)(18.4%)(88.3%) Machinery manufacturing services (43.5)(41.2%)(339.8%) Other (2.1)(8.1%)(16.4%) Intersegment sales (63.9)(108.5) %348.4% Total %100.0%

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

8 8 Change in EBITDA by segment $mln. Six months 2003 Six months 2002 ChangeChange, % Change structure O&G equipment (3.9)(54.9%)35.8% NPP equipment (0.2)(2.7%)1.8% Shipbuilding %(25.7%) Mining equipment %(1.8%) Special Steel %(14.7%) Machinery manufacturing services (9)(63.8%)82.6% Other(4.6)(2.2)(2.4)(109.1%)22.0% Total (10.9)(30.8)%100.0%

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

10 Balance Sheet Highlights $mln Six months 2003 Six months 2002 Change% Current Assets % Total Assets % Current Liabilities % Total Liabilities % NWC %

11 Key Ratios Six months 2003 Six months 2002 Current ratio Quick ratio NWC to Total Assets12%4% Total Liabilities to Total Assets 73% Turnover (days) Assets Inventories Trade accounts receivable3740 NWC6715

12 Income statement net of non-cash effect $th Six months 2003 Six months 2002 Income after taxes and minority interest Minority interest(2 518)2 586 Deferred tax Operating provisions(475)(6 442) Non-operating provisions(556)- Deferred payment* Minority interest on deferred payment(752)(786) Total adjusted net income Depreciation Net income + Depreciation * represented payment for NPPE that is due upon the commissioning of the respective power plants

13 SG&A $th 6 months months 2002 Change Selling % G&A % Total %

14 G&A expenses ($th) Total 6 months 2003 G&A expenses Organic component Acquisition component Organic component items Six months 2003 Six months 2002 Change Change structure Payroll %69% Unified Social Tax %20% Road User’s Tax-2 096(2 096)(100%)(40%) Rent of land (or land tax) %9% Depreciation %5% Property insurance %7% Repairs & maintenance %7% Utilities %19% Other %4% Total organic component %100%

15 Selling expenses ($th) Total 6 months 2003 Selling expenses Organic component Acquisition component Organic component items Six months 2003 Six months 2002 Change Change structure Transport / customs / packaging / commission (988)(24%)79% Advertising %(1%) Other (263)(27%)21% Total organic component (1 243)(23%)100%

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 debt Current portion of long-term debt Total debt Interest expense Capitalized interest Interest coverage EBITDA / (Interest expense+Capitalized interest) * Increase in long term debt due to CLN issuance ** Increase in long term debt due to issuance of non-convertible bonds

17 Effective interest rate $mlnSix months 2003Six months 2002 Average debt Interest expense Capitalized interest Effective interest rate14%17%

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 parties % Long-term trade a/c receivable 13.5(13.5) % Due from related parties, long-term (4%) Short-term trade a/c payable 32.3(3.2) % Advances received *91.1(40.6) % Due to related parties** %

19 Inventory $mln Six months 2003 Six months 2002 Change Change, % Change structure Materials and spare parts %35% Work-in-progress %39% Finished goods %24% Total inventories, at cost %97% Provision for obsolete inventories (23.5)(24.4)0.9(4%)2% Total inventories, net %100%

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

21 Plant and equipment ($mln) PPE as of December 31, 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,

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