PSC VSMPO-AVISMA Corporation Published its Audited Financial Statements on a US GAAP Basis for 2006

Consolidated Sales, Gross Profit and EBITDA for 2006 are $1003.22 million; $478.13million; and $338.70 million respectively. Consolidated 2006 Sales increased $275.03 million or 38% over 2005. Consolidated Gross Profit and EBITDA increased $162.18 million (51%) and $177.56 million (110%) respectively over the prior year.

Commenting on the results for 2006, Alexander Sementsov, the Company Financial Director, said:

“Consolidated results of VSMPO-AVISMA Corporation include the operations of our production facilities in Russia and abroad, reported in accordance with US Generally Accepted Accounting Principles. In 2006, we earned the greatest profit in the history of our Company. The significant improvements in consolidated sales and earnings in 2006 were the result of favorable conditions in the world titanium markets for aerospace and industrial applications and increases in our production and shipments.

At the start of 2007, the Company began implementation of a large-scale investment program for production modernization and development of additional capacities. This program will continue through 2012. Financing of this program will be provided from a combination of borrowings and funds from internal cash flow. While demand for the Company´s products remains strong, we anticipate some decrease in our Gross Profit Percent in 2007 due to the impacts of inflation in Russia and the fall in the US dollar´s exchange rate. Our sales are primarily in US dollars while our costs are primarily in Russian Rubles.”

Vladislav Tetyukhin, the Director General of VSMPO-AVISMA, added:

”Our currently implemented plans for the modernization and expansion of our production facilities will enable VSMPO-AVISMA to meet the future requirements of our strategic partners for the titanium products we produce and deliver to the leading industries in Russia and the entire world. We will also increase our production of higher value-added titanium products. Implementation of these plans will both enhance our reputation in the market as an industry leader and will generate additional profit upon their successful completion.”