Main results of the reporting period

mln rub, unless otherwise specified

Notes:

EBITDA is recognised net of reserve balances for impairment of debt financial investments. EBITDA = Profit before tax + Depreciation + Interest payable - Provision balances for impairment of debt financial investments.
Connected capacity is stated on the basis of constant technological connection (without generation). 

"Profit of the Company by the results of the six months of 2019 amounted to 8.4 bln rub, which is 1.5 times exceeding the financial result for the same period of the previous year. The main factor is the growth of the revenue from electric power transmission. Financial position of the Company is stable sound, level of profitability has increased, Net debt/EBITDA Ratio (for 4 quarters) has decreased to 0.71§ç".

- Polinov Aleksey Aleksandrovich,
Deputy General Director
of Economy and Finance of Lenenergo PJSC

Explanations for financial results

Revenue of Lenenergo Group PJSC amounted to 40,088 mln rub, among them:

Revenue from electric power transmission services amounted to 37,349 mln rub, which is 12.1% (4,035 mln rub) higher than that of the previous year, in particular by the growth of power consumption and return of accumulated shortfall in income by the regional regulator and tariff revenue reposting (smoothing).

Revenue from technological connection services amounted to 2,348 mln rub, which is 8.2% (209 mln rub) lower than that of the previous year due to the closure in the 1st quarter of 2018 of a major contract with Community and Business Complex Okhta §³JSC.

Operating expenses of Lenenergo Group PJSC for the reporting period amounted to 28,541 mln rub, which is 0.5% lower than that of the previous year, in particular by:

¡ö      Reduction of expenses on depreciation by 8.6% as a result of recognised cost reduction of fixed assets of the Group as at June 30, 2018 in the amount of 34,596 mln rub.

¡ö      Reduction of repair and maintenance costs by 14.7% due to a smaller scope of planned (executed) repair works as at the 1st half of 2019 compared to the 

1st half of 2018.

¡ö      Reduction of short-term lease expenses by 85.8% due to the introduction of the new IFRS 16 "Leases" since January 1, 2019 and reclassification of expenses under significant lease agreements to financial expenses.

Operating profit of Lenenergo Group PJSC for reporting period amounted to 11,397 mln rub, which is 43.1% higher than that of the previous year.

Net profit of Lenenergo Group PJSC for the reporting period amounted to 8,390 mln rub, which is 49.7% higher than that of the previous year, in particular by:

¡ö      increase in revenue from electric power transmission by 12.1%;

¡ö      reduction of operating expenses by 0.5%;

EBITDA of Lenenergo Group PJSC for the reporting period amounted to 17,374 mln rub, which is 19.8% higher than the same indicator of the previous period, in particular by the growth of the revenue from electric power transmission services.

EBITDA Margin of Lenenergo Group PJSC was 43.3%, which is 3.4 p.p. higher than the same indicator of the previous period. Increase in the indicator is connected with growth of the operating profit by 43.1%. 

Main balance sheet items

mln rub, unless otherwise specified

Notes:

Net debt was calculated by the formula: long-term and short-term credits and loans taking into account interest arrears - cash and cash equivalents ¨C short-term financial investments;

ROE was calculated by the formula: (Net profit (for 4 quarters)/Equity)*100 

As at June 30, 2019, the assets of Lenenergo Group PJSC amounted to 215,681 mln rub, which is 4.8% higher than the same indicator at the end of 2018. Change of the assets is mainly due to implementation of the investment program by the Group and achievement of the positive financial result for the reporting period.

Return on equity (ROE) of Lenenergo Group PJSC amounted to 9.8%, which is 1.6 p.p. higher than the same indicator of 2018. Increase in the indicator is connected with the growth of net profit.

Net debt of Lenenergo Group PJSC according to the results for the 6 month of 2019 amounted to 22,101 mln rub, which is 21.6% lower than the same indicator at the beginning of the year. Reduction of the net debt was due to the debt repayment and growth of the balances of cash and short-term financial investments.

As at June 30, 2019, Net debt/EBITDA

 of Lenenergo Group PJSC amounted to 0.71 against 1.0 as at the end of 2018. Dynamics of the indicator is due to a significant reduction of the net debt of the Group during simultanious growth of EBITDA. 

Investments

mln rub, unless otherwise specified

Notes:

Actual indicators for the 1st half of 2019 were generated on the basis of operational data as at August 23, 2019

Amount of capital investments for the reporting period was 7,954 mln rub, which is 49.8% higher than the indicator for the same period of 2018 (5,309 mln rub). Amount of the input for the reporting period was 4,631 mln rub, which is 8.1% higher than the indicator for the same period of 2018 (4,283 mln rub). 

Increase in indicators of utilization and input in fixed assets in the 1st half of 2019 in comparison with the indicators for the same period of 2018 is due to increase in the scope of liabilities under concluded contracts on technological connection.