JSC RusHydro (ticker symbol: LSE, RTS, MICEX: HYDR; OTCQX: RSHYY) announces its unaudited unconsolidated Q1 2011 financial results under Russian accounting standards (RAS). Key financial highlights for Q1 2011 (RUR million): Q1 2011 | Q1 2010 | change, % | | Revenues | 22,509 | 20,217 | 11.3 | Expenses | (8,426) | (9,312) | -9.5 | Operating profit | 14,083 | 10,905 | 29.1 | Other income | 2,404 | 32,636 | -92.6 | Other expenses | (5,360) | (29,506) | -81.8 | EBITDA[1] | 16,268 | 12,905 | 26.1 | Net profit | 8,106 | 11,084 | -26.9 |
The Company's revenues for Q1 2011 increased 11.3 % and reached RUR 22,509 million, compared with RUR 20,217 million for the same period in 2010. Principal growth drivers include: ╖ Increased power generation; ╖ Increase of electricity sales on the day-ahead market at non-regulated prices, according to the liberalization schedule for the wholesale power and capacity market. The greatest portion of revenues comes from power and capacity sales (RUR million): Q1 2011 | Q1 2010 | change, % | | Electricity sales | 11,281 | 7,454 | 51.3 | Capacity sales | 11,137 | 12,655 | -12.0 | Heat sales | 51 | 53 | -3.8 | Other income | 40 | 55 | -27.3 | Total revenues | 22,509 | 20,217 | 11.3 |
The cost of goods sold, production, work and services in Q1 2011 reached RUR 8,426 million (a 9.5% decrease compared to Q1 2010). A 68.4% decrease in costs to purchase power and capacity - from RUR 2,340 million in Q1 2010 to RUR 740 million in the reporting period - was the main factor behind the cost reduction. This can be explained by a reduction in power volumes purchased on the day-ahead market at non-regulated prices, including those to fulfill regulated contracts. The Company's Q1 2011 operating profit increased 29.1 % compared with Q1 2010 and reached RUR 14,083 million. Other income in Q1 2011 reached RUR 1,618 million. Income from the realization and repayment of promissory notes (RUR 1,268 million) constituted the overwhelming portion of other income during the reporting period. During the reporting period, other expenses reached RUR 5,340 million. The largest portion of other expenses was losses from the mark-to-market revaluation of financial investments (RUR 3,186 million), followed by expenses related to the sale of promissory notes (RUR 1,268 million). EBITDA increased 26.1 % compared with Q1 2010 and reached RUR 16,268 million. The Company's net profit in Q1 2011 decreased 26.9% to RUR 8,106 million. The net profit decline was principally the result of mark-to-market revaluation of financial investments with a market value of RUR 3,186 million. Highlights of financial position as at March 31st, 2011 The Company's total assets as of March 31st, 2011 increased by RUR 9,458 million (+1.7%) in comparison with the assets as of January 01st, 2011 and reached RUR 560,781 million. The asset increase can principally be attributed to a growth in short-term accounts receivable of RUR 9,187 million, due to the fact that payments for obligations under contracts for selling power and capacity for January, February, March 2011 will be carried out on April 21st, 2011 (the control date), according to temporary regulations for ensuring power and capacity trade on the wholesale market for January-March, 2011. As of March 31st, 2011, the total obligations was RUR 47,703 million (+2.9% compared with the beginning of the reporting period). The increase was due to the Company receiving funds from shareholders for the additional issue of ordinary shares (RUR 1,088 million). In Q1 2011, the Company's equity increased 1.6% to RUR 513,078 million compared with RUR 504,972 million as of the beginning of the year. This can be explained by an increase in undistributed profit of RUR 8,118 million.
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