MICEX-RTS: LSNG/LSNGP Credit rating:
Moody’s Ba2 (outlook stable)
Confirmed in February 2014 Press Release
09.04.2014 Lenenergo releases FY2013 financial statements in accordance with IFRS. Revenue was up 12.6%, EBITDA increased by 52.7%, net profit totaled RUB 3,281 mln In the opinion of the Company’s auditor, Ernst & Young, the consolidated financial statements present fairly, in all materials respects, the financial position of the Group as at 31 December 2013, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards. | | | | RUB mln | Indicator | 31.12.2011 | 31.12.2012 | 31.12.2013 | 2013/12, % | Assets | 96,951 | 99,393 | 120,845 | 21.6% | Total equity | 42,503 | 43,487 | 49,465 | 13.7% | Liabilities, including: | 54,448 | 55,905 | 71,380 | 27.7% | - non-current liabilities | 29,413 | 25,338 | 34,700 | 37.0% | - current liabilities | 25,035 | 30,567 | 36,679 | 20.0% | Revenue, including: | 32,257 | 33,135 | 37,323 | 12.6% | - from transmission of electricity | 22,895 | 23,521 | 27,480 | 16.8% | - from technological connection | 8,629 | 7,580 | 6,807 | -10.2% | - other | 732 | 2,034 | 3,036 | 49.2% | Operating expenses | 31,503 | 30,653 | 31,008 | 1.2% | Operating profit | 754 | 2,482 | 6,316 | 154.5% | EBITDA* | 5,681 | 6,785 | 10,358 | 52.7% | Adjusted EBITDA (after revaluation) | 9,937 | 10,386 | 10,358 | -0.3% | EBITDA margin, % | 17.61% | 20.48% | 27.75% | 7.27 p.p. | Net profit / loss * | -943 | 238 | 3,281 | 1279.0% | Net profit / loss (after revaluation) | 2,461 | 3,119 | 3,281 | 5.2% | Net profit margin, % | -2.92% | 0.72% | 8.79% | 8.07 p.p. | Net debt | 20,469 | 24,277 | 29,664 | 22.2% | Net debt/EBITDA | 3.60 | 3.58 | 2.86 | - | ROE, % | -2.0% | 1.1% | 13.3% | 12.2 p.p. | Quick liquidity | 0.32 | 0.18 | 0.22 | - | Current liquidity | 0.48 | 0.37 | 0.47 | - |
EBITDA is calculated as profit before tax plus depreciation of fixed assets and intangible assets plus financial expenses minus financial income Net debt is calculated as long-term and short-term credits and loans minus cash and cash equivalents * In 2011 and 2012, loss from depreciation of fixed assets in the sum of RUB 4,256 mln and RUB 3,601 mln, respectively, was recognized under operating expenses. In 2013 by results of the impairment test depreciation of fixed assets is absent. In this regard, in the analysis of performance results for FY2013 it is necessary to consider adjusted indicators of EBITDA and net profit for 2012 and 2011. Revenue In 2013 electricity transmission revenue net of normal (expected) technological losses of RUB 5,577 mln (2012: RUB 5,031 mln) was RUB 27,480 mln, 17% higher than in 2012. The main revenue was received from customers, OJSC PSK and LLC Energia-Holding, amounting to RUB 20,673 mln (2012: RUB 18,997 mln) and RUB 4,494 mln (2012: RUB 3,456 mln), respectively, comprising 77% (2012: 79%) of the total revenue from transmission of electricity before technological losses at the normal (expected) level. In 2013 electricity transmission revenue from LLC RKS-Energo amounted to RUB 3,512 mln or 11% (2012: RUB 2,564 mln or 9%) of the total revenue from transmission of electricity before technological losses at the normal (expected) level. Technological connection revenue in 2013 was down 10.29% compared with 2012 and totaled RUB 6,807 mln driven by prevalence in the structure of revenues in 2012 of a share of large contracts and property contracts. Other revenue totaled RUB 3,036 mln in 2013, 49% higher than the indicator of the last year resulting from implementation of the program for identifying non-contractual electricity consumption and growth of income received from subsidiaries. Prime cost The Group’s operating expenses in the reporting period were RUB 31,088 mln, 1% higher than in the same period last year. RUB mln | | 2013 | 2012 | 2011 | 2013/12, % | Transmission fee | 13,657 | 13,381 | 13,403 | 2% | Payroll and payroll taxes | 4,774 | 4,154 | 4,112 | 15% | Depreciation of property, plant and equipment | 3,920 | 4,216 | 4,813 | -7% | Provision for litigations and claims | 2,206 | 116 | - | 1,802% | Repairs and maintenance | 1,616 | 1,309 | 1,041 | 23% | Taxes other than income tax | 687 | 212 | 179 | 223% | Rent | 550 | 467 | 472 | 18% | Agency services | 465 | 449 | 7 | 4% | Telecommunication and information services | 379 | 348 | 348 | 9% | Raw materials and supplies | 332 | 307 | 261 | 8% | Provision for impairment and write-off of receivables | 257 | 214 | 505 | 20% | Social expenses | 226 | 196 | 201 | 15% | Consulting, legal and audit services | 190 | 193 | 142 | -1% | Utilities | 119 | 106 | 119 | 12% | Internal security | 144 | 129 | 120 | 12% | Amortisation of intangible assets | 123 | 87 | 115 | 41% | Loss on impairment/(reversal of impairment) of intangible asset | 32 | -129 | 148 | -124% | Revaluation of property, plant and equipment | - | 3,601 | 4,256 | -100% | Other operating expenses | 1,334 | 1,298 | 1,261 | 3% | Total operating expenses | 31,008 | 30,653 | 31,503 | 1% |
Comments on basic expenses items: · Decrease in expenses for depreciation of property, plant and equipment by 7% in 2013 is driven by depreciation of the cost of fixed assets due to revaluation as of 31.12.2012. · Essential increase in provision for litigations and claims is caused by possible risks of recognition for 2013 of expenses on large judicial proceedings due to disagreements regarding determination of volumes and cost of services in transmission of electricity of a number of third-party grid organizations. Lenenergo intends to defend legitimacy of its position in a judicial order and bring its contractual relations to the requirements of the legislation of the Russian Federation which has been amended in 2012. Thus disagreements are absent with other territorial grid companies (over 40 companies), and existing contracts were brought into accord to the requirements of the existing legislation of the Russian Federation. · In 2011 and 2012 the Group recognized depreciation of property, plant and equipment in the sum of RUB 4,256 mln and RUB 3,601 mln, respectively. It is connected with introduction in 2011 of restrictions on growth of tariffs for electric power transmission in the Russian legislation, and also that since July, 2012 tariff rates for electric power transmission in the RAB regulation system (in particular, profitability rate on invested capital decreased from 11% to 1%) were changed. In 2013 depreciation of property, plant and equipment was not revealed. Financial result By results of 2013 Lenenergo Group of Companies earned operating profit of RUB 6,316 mln (+155% to 2012). Net profit in the reporting period amounted to RUB 3,281 mln, 16 times higher than the similar indicator for 2012 (not adjusted for the sum of recognized depreciation in expenses of 2012). EBITDA in 2013 totaled RUB 10,358 mln, 53% higher than the similar indicator for 2012 (not adjusted for the sum of recognized depreciation in expenses of 2012). Debt position Credit portfolio (the Company’s short-term credits and loans for the end of the reporting period) was RUB 33,384 mln, 20% higher than in the same period last year. Net debt as of 31.12.2013 was RUB 29,664 mln. Net debt/EBITDA for the end of the reporting year did not exceed the recommended limits and totaled 2.86 times. For reference: The structure of the Group of companies Lenenergo 
Dynamics of Key IFRS Indicators of Lenenergo for the Five Recent Years: | 2009 | 2010 | 2011 | 2012 | 2013 | Revenue | 22,800 | 28,574 | 32,257 | 33,135 | 37,323 | From transmission of electricity | 15,416 | 17,692 | 22,895 | 23,521 | 27,480 | From grid connection | 6,638 | 10,300 | 8,629 | 7,580 | 6,807 | Other | 746 | 582 | 732 | 2,034 | 3,036 | Operating expenses | 18,489 | 21,441 | 31,503 | -30,653 | 31,008 | Net profit | 2,587 | 4,750 | -943 | 238 | 3,281 | Net profit margin | 11.35% | 16.63% | -2.92% | 0.72% | 8.79% | EBITDA | 8,185 | 11,611 | 5,681 | 6,785 | 10,358 | EBITDA margin | 35.9% | 40.6% | 17.6% | 20.5% | 31.3% | Net debt | 13,736 | 15,038 | 20,469 | 24,277 | 29,664 | Net debt/EBITDA | 1.68 | 1.30 | 3.60 | 3.58 | 2.86 |
Dynamics of Key Indicators of the Consolidated Statement of Financial Position for the Five Recent Years: | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | | | | | | | | Long-term assets | 73,023 | 78,962 | 87,010 | 84,958 | 88,157 | 102,100 | Short-term assets | 10,331 | 9,363 | 6,372 | 11,993 | 11,236 | 18,744 | Assets | 83,355 | 88,325 | 93,382 | 96,951 | 99,393 | 120,845 | Long-term borrowings | 12,946 | 10,074 | 14,125 | 21,028 | 20,637 | 29,402 | Non-current liabilities | 24,496 | 16,926 | 21,924 | 29,412 | 25,338 | 34,700 | Short-term borrowings | 436 | 6,611 | 1,566 | 6,549 | 7,153 | 3,982 | Current liabilities | 15,618 | 25,565 | 21,497 | 25,035 | 30,567 | 36,679 | Liabilities | 40,114 | 42,492 | 43,421 | 54,448 | 55,905 | 71,380 | Equity | 43,241 | 45,834 | 49,961 | 42,504 | 43,487 | 49,465 |
Dynamics of Key Indicators of the Consolidated Income Statement for the Five Recent Years: | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | Revenue | 17,914 | 22,800 | 28,574 | 32,257 | 33,135 | 37,323 | Operating expenses | -14,608 | -18,489 | -21,441 | -31,503 | -30,653 | -31,008 | Operating profit | 3,306 | 4,311 | 7,133 | 754 | 2,482 | 6,316 | Financial income | 2,292 | 78 | 774 | 61 | 302 | 667 | Financial expenses | -1,372 | -2,084 | -1,580 | -1,660 | -2,175 | -2,682 | Profit before tax | 3,048 | 2,132 | 6,257 | -845 | 609 | 4,301 | Income tax expenses | -1,210 | 455 | -1,507 | -99 | -371 | -1,020 | Net profit | 1,838 | 2,587 | 4,750 | -943 | 238 | 3,281 |
|
.jpg){kind=small}
