A
meeting of the Company’s Board of Directors was held on 20 December
2016, which approved the Company’s Business Plan, including the
Investment Program for 2017. The Business Plan for 2017 is formed
taking into account the forecast of socio-economic development of the
Russian Federation for 2017-2019 (hereinafter – the Forecast),
prepared by the Ministry of Economic Development of Russia. Scenario
conditions for the formation of the Business Plan for 2017 in most
branches provide for growth of an average joint operation tariff for
electricity transmission services within the Forecast parameters.
According to the Business Plan by the end of 2017 operating costs per
unit of electrical equipment operation and maintenance in line with
the Strategy of Development of electric grid facilities of the
Russian Federation should be reduced by at least 25%, adjusted for
inflation to the level of 2012.
Indicators of the Company’s Business Plan for 2017:
Data in bln RUB, unless specified otherwise
Indicators
|
Expected fact for 2016
|
Planned for 2017
|
Change, %
|
Revenue (total), including:
|
85,3
|
86,8
|
1,8%
|
Revenue from electric energy transmission
|
83,1
|
84,5
|
1,7%
|
Revenue from grid connection
|
1,3
|
1,3
|
0,0%
|
Other revenue
|
0,9
|
1,0
|
11,1%
|
Cost of sales
|
75,8
|
76,6
|
1,1%
|
Sales profit1
|
9,5
|
8,1
|
-14,7%
|
EBITDA2
|
16,5
|
17,4
|
5,5%
|
Net profit
|
1,1
|
1,4
|
27,3%
|
Amount of electric energy transmitted, billion kWh
|
55,2
|
50,6
|
-8,3%
|
Electric energy losses, %
|
9,49%
|
10,21%
|
0,72 p.p.
|
Electric energy losses (in comparable conditions of 2016), %
|
9,49%
|
9,30%
|
- 0,19 p.p.
|
Indicators
|
Expected fact at 31.12.2016
|
Planned for 31.12.2017
|
Change, %
|
Loans and credits
|
43,9
|
42,8
|
-2,5%
|
Net debt3
|
43,4
|
42,3
|
-2,5%
|
Net debt/EBITDA
|
2,6
|
2,4
|
-7,7%
|
[1] Revenue net of costs, selling and administrative
expenses
|
[2] EBITDA is calculated as follows: net profit +
profit tax and other similar mandatory payments + interest payable
+ depreciation charges
[3] Net debt is calculated as follows: long-term
debt + short-term debt – cash and cash equivalents –
short-term financial investments
|
Planned revenues for electric energy transmission services in the
framework of the Business Plan for 2017 is 1.8% above the expected
level by the end of 2016, due to increase of tariffs for electric
energy transmission services from 1 July 2017, with termination of
"last mile" contracts in the framework of the current
legislation as a negative factor for the company’s revenues.
Planned value of grid connection revenues allows for growth in 2017
in the volume of connected capacity by 14% of the expected fact in
2016. The connected capacity volume growth is expected due to planned
execution of large grid connection contracts in the Voronezh,
Smolensk and Belgorod regions.
The increase of cost of sales relative to the expected fact in
2016 has been recorded significantly below the forecast inflation
rate for 2017. This was achieved thanks to tight control over the
level of operating expenses. Pursuant to the Russian Federation
Government Directive of 29.03.2016 ¹ 2073p-P13, in 2017 decrease in
operating expenses (costs) will be provided by not less than 3%,
adjusted for inflation to the level of 2016.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) is projected at 5.5% higher than the expected outcome in
2016 and will amount to 17.4 billion RUB. Implementation of the risk
of increasing arrears for services rendered by the company can
provide negative impact on the financial result. A positive factor
for the company should be a reduction in the weighted average
borrowing rate. Net profit for 2017 is projected at 1.4 billion RUB.
The projected value of the volume of electric energy transmission
services according to the Business Plan for 2017 will decrease by
8.3% and will be 50.6 billion kWh. The main reason for a significant
change in the indicator is the termination of "last mile"
contracts in the Belgorod, Lipetsk and Kursk regions. The size of
planned relative value of losses, calculated in comparable conditions
of 2016, is lower than the expected fact in 2016 by 0.19 p.p. and is
9.30%.
The approved Business Plan for 2017 is fully consistent with the
company’s facing problems and challenges. Despite the presence of
risk factors beyond the management control, the company will continue
uninterrupted work aimed at improving the quality and reliability of
electricity supply, while maintaining financial stability, and making
every effort to maintain dividend payments to its shareholders.
Other IR news of the Company can be found at:
https://www.mrsk-1.ru/en/investors/presentations/ir_news/
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