March 30, 2017. Moscow, Russia.
PJSC RusHydro (MOEX, LSE: HYDR; OTCQX: RSHYY) announces its
non-consolidated financial results under Russian accounting standards
(RAS) for the full year ended December 31, 2016.
Key highlights:
4Q 2016 revenue – RUB 28,268 mn (-2.8%),
for 2016 – RUB 115,033 mn (+7.4%);
4Q operating expenses – RUB 16,788 mn
(-8.8%), for 2016 – RUB 56,356 mn (-11.9%);
4Q 2016 EBITDA – RUB 15,395 mn (+7.3%),
2016 EBITDA – RUB 73,890 mn (+28.8%);
EBITDA margin in 4Q 2016 – 54.5% (+5.1
p.p.), in 2016 – 64.2% (+10.6 p.p.);
Reported net profit for 2016 – RUB 41,877
mn (+39.5%), adjusted net profit – RUB 59,846 mn (+92.2%).
Key financials for 2016 under RAS (in RUB mn)
|
2016
|
2015
|
chg
|
4Q’16
|
4Q’15
|
chg
|
Revenue
|
115,033
|
107,099
|
7.4%
|
28,268
|
29,076
|
-2.8%
|
Operating expenses
|
(56,356)
|
(63,969)
|
-11.9%
|
(16,788)
|
(18,411)
|
-8.8%
|
Operating profit
|
58,677
|
43,130
|
36.0%
|
11,480
|
10,665
|
7.6%
|
EBITDA[1]
|
73,890
|
57,387
|
28.8%
|
15,395
|
14,343
|
7.3%
|
Net profit
|
41,877
|
30,022
|
39.5%
|
|
|
|
Net profit (adj.)[2]
|
59,846
|
31,142
|
92.2%
|
20,136
|
5,969
|
237.3%
|
Revenue
In 2016, revenue increased by 7.4% to RUB 115,033
mn as compared to RUB 107,099 mn for 2015. The underlying factors
behind the change in revenue were:
strong operational results due to rational
utilization of elevated inflows to a number of large reservoirs,
commissioning of new power plants and modernization of operating
plants;
increase in capacity prices of the
competitive capacity auctions (KOM) for the hydropower plants of the
second price zone following full liberalization of capacity market
for hydro in Siberia with increase of capacity sold at KOM price
from 80% to 100% since May 1, 2016[3];
increase in day-ahead market prices in the
first price zone;
indexation of regulated electricity and
capacity tariffs for RusHydro hydropower plants;
decrease in cost of purchased electricity and
capacity due to decrease in volumes of purchased electricity due to
absence of free bilateral agreements in the price zone of wholesale
market for electricity and capacity.
Revenue breakdown (RUB mn)
|
2016
|
2015
|
chg
|
4Q’16
|
4Q’15
|
chg
|
Electricity sales
|
77,338
|
73,262
|
-5.6%
|
17,687
|
19,569
|
9.6%
|
Capacity sales
|
36,833
|
32,583
|
13.0%
|
10,401
|
9,177
|
13.3%
|
Other sales
|
862
|
1,254
|
-31.3%
|
180
|
330
|
-45.5%
|
TOTAL
|
115,033
|
107,099
|
-7.4%
|
28,268
|
29,076
|
-2.8%
|
Operating expenses
Operating expenses in January-December 2016
decreased by 11.9% to RUB 56,356 mn as compared to RUB 63,969 mn for
the same period of 2015.
Operating expenses breakdown (in RUB mn)
|
2016
|
2015
|
chg
|
4Q’16
|
4Q’15
|
chg
|
Depreciation
|
15,213
|
14,257
|
6.7%
|
3,915
|
3,678
|
6.4%
|
Labor expenses
|
9,408
|
10,113
|
-7.0%
|
4,312
|
4,166
|
-3.5%
|
Purchased electricity and capacity
|
7,023
|
13,970
|
-49.7%
|
1,802
|
4,020
|
-55.2%
|
Property tax
|
6,771
|
6,640
|
2.0%
|
1,722
|
1,676
|
2.7%
|
Repairs & maintenance
|
3,724
|
4,109
|
-9.4%
|
1,449
|
1,865
|
-22.3%
|
Other third-party services
|
3,720
|
3,725
|
-0.1%
|
1,523
|
1,589
|
-4.2%
|
Services of SO, ATS, CFS
|
2,813
|
2,884
|
-2.5%
|
701
|
751
|
-6.7%
|
Security expenses
|
1,730
|
1,729
|
0.1%
|
423
|
447
|
-5.4%
|
Insurance expenses
|
1,710
|
1,482
|
15.4%
|
510
|
402
|
26.9%
|
Rent
|
1,579
|
1,230
|
28.4%
|
508
|
338
|
50.3%
|
Water tax
|
1,267
|
934
|
35.7%
|
293
|
247
|
18.6%
|
Leasing expenses
|
186
|
479
|
-61.2%
|
31
|
259
|
-88.0%
|
Other
|
1,212
|
2,417
|
-49.9%
|
-401
|
-1027
|
-61.0%
|
TOTAL
|
56,356
|
63,969
|
-11.9%
|
16,788
|
18,411
|
-8.8%
|
Highest constituents of operating expenses were
depreciation and labor expenses (27% and 17% of the overall operating
expenses respectively). Major factors of change in operating expenses
were:
increase in depreciation and appreciation
(+7) and property tax (+2%) linked to increase in value of plant,
property and equipment and non-tangible assets following
commissioning of new plant, property and equipment and beginning of
exploitation of SAP software in pilot regime;
decrease in employee benefit expenses by 7%
as a result of continuing headcount optimization and overhaul of
employee and management compensation plans;
decrease in expenses on purchased electricity
and capacity by RUB 6,947mn or 50% due to a) increased output and b)
decrease in volumes of purchased electricity due to decrease in
purchased electricity in absence of free bilateral agreements in the
price zone of wholesale market for electricity and capacity;
other expenses for 2016 decreased by 50% or
RUB 1,205 mn against 2015 and totaled RUB 1,212 mn due to cost
cutting measures, undertaken by the Company.
Profit
Operating profit for 2016 increased by 36.0% to
RUB 58,677 mn against RUB 43,130 mn for 2015.
EBITDA increased by 28.8% as compared to the same
period of 2015 and amounted to RUB 73,890 mn.
RusHydro's net profit for the reporting period
increased by RUB 11,855 mn or 39.5% and totaled RUB 41,877 mn. Net
profit adjusted for non-cash items increased by 92.2% and totaled RUB
59,846 mn. The difference between the reported and adjusted net
profit is attributed mainly to the following non-cash effects:
expenses (net) on provision for impairment of
financial investments in the amount of RUB 17,644 mn, including: a)
LLC ESC RusHydro in the amount of RUB 8,412 mn, b) JSC Hydroinvest
in the amount of RUB 4,128 mn and c) ZAO Verkhne-Narynskye GES in
the amount of RUB 2,265 mn;
gain from revaluation of financial investment
market-to-market in the amount of RUB 5,532 mn;
expenses (net) on provision for accounts
receivables in the amount of RUB 5,915 mn;
gain from other reserves in the amount of RUB
253 mn;
expenses on estimated liabilities in the
amount of RUB 194 mn.
RusHydro's financial position as of December 31,
2016
The Company's total assets increased by RUB 16,042
mn as of December 31, 2016, or 2% against the similar figure as of
December 31, 2015, reaching RUB 908,673 mn.
As of December 31, 2016, total liabilities
decreased by 7% or RUB 10,825 mn and amounted to RUB 139,274 mn.
The Company's debt portfolio decreased by 12% from
the beginning of the year from RUB 124,010 mn to RUB 108,873,010 mn;
long-term loans make up 87% of total debt portfolio.
The
Company's equity for 2016 increased by 4% to RUB 769,336 mn against
RUB 742,469 mn as of the beginning of the reporting year.
[1]
EBITDA calculated as gross profit before depreciation.
[2]
Net profit adjusted for the mark-to-market revaluation of listed
equity stakes, provisions for financial investments and other assets
impairment, provisions for potentially uncollectible accounts
receivable and other, estimated liabilities. This indicator is not
reported in the official financial statements under RAS and has been
calculated and put into the press release for reference.
[3]
According to the Decree of the government of the Russian Federation
No. 379 of April 30, 2016, all limitations on sale of all capacity of
hydropower plants located in the 2nd price zone at free
(unregulated) prices have been lifted, Thus the entire volume of
capacity of hydropower plants, located in the 2nd price
zone, less volume volumes, provided under regulated contracts, will
be sold at price determined by the competitive capacity auctions (KOM
). Early liberalization introduced under condition that the limit on
specific price of electricity and capacity for customers in Republic
of Buryatia from May to December 2016 will not trespass 7.5%. In case
such threshold will be trespassed, the 100% liberalization will be
cancelled and 80% level of liberalization will be reintroduced.
|