RUB mln, unless otherwise stated

EBITDA is calculated as profit before tax + depreciation of property, plant and equipment and amortization of intangible assets + finance expenses - finance income

Net debt is calculated as long-term and short-term borrowings - cash and cash equivalents - short-term investments 

Assets

The change of the Group’s balance sheet indicators as compared to 6M2015 is related first and foremost to the enlargement of the Group membership by accounting in the consolidated statements of the assets of JSC St.P. Electric Grids and JSC POIKOVSK ELECTRIC GRIDS, as well as carrying out an additional issue of ordinary shares.

From 31.12.2015 to 30.06.2016 the Group’s assets dropped by 2.4% and amounted to RUB 234,102 mln. Equity increased by 3.8% to RUB 145,724 mln. Thereby the Group liabilities decreased by 11.1% to RUB 88,377 mln.

Revenue

Revenue from electricity transmission for 6M2016 net of normal technological losses in the amount of RUB 4,784 mln (for 6M2015 – RUB 3,909 mln) was RUB 22,001 mln, which is 50% higher than for 6M2015 due to the volume reduction of shortfall in income and a partial compensation of accumulated smoothing when approving the tariff for electricity transmission, as well as the Group’s enlargement due to JSC St.P. Electric Grids and JSC POIKOVSK ELECTRIC GRIDS.

Revenue from technological connection services for 6M2016 grew by RUB 786 mln (55%) as compared to the similar period of 2015, and amounted to RUB 2,208 mln, which is preconditioned by the liabilities fulfillment for the services rendering for the applicants' technological connection with due regard to the revenue of JSC St.P. Electric Grids and JSC POIKOVSK ELECTRIC GRIDS.

Other income for 6M 2016 amounted to RUB 1,571 mln as compared to RUB 1,228 mln for 6M2015.

Costs

Operating expenses of the Group in the reporting period were RUB 19,510 mln, up 3.6% from the previous year’s level.

The main changes as part of the operating expenses:

• Expenses for electricity transportation

Expenses for electricity transportation for 6M2016 grew by 8.5% as compared to 2015 and amounted to RUB 8,050 mln.

• Fixed assets wear

Costs growth for the fixed assets depreciation by 15.1% took place due their book value increase in the reporting period.

·         Reserve under court cases and pretensions

Reserves decrease as compared to 2015 occurred primarily due to the disputes settlement with the adjacent territorial grid organizations.

Financial result

Operating profit of the Group for 6M2016 amounted to RUB 6,270 mln, which is by RUB 7,788 mln higher than in the similar period of 2015.

Based on the results of 6M 2016, the Group received net profit of RUB 5,133 mln, meanwhile net loss of RUB 3,296 mln was received for 6M2015.

EBITDA for 6M2016 amounted to RUB 10,877 mln, which is 6.5 times higher than for 6M2015.

Debt position

Credit portfolio (short-term and long-term borrowings of the Company for the end of the reporting period) was RUB 31,802 mln, 22% lower than the same indicator for the end of 2015. Net debt for 6M2016was RUB 8,968 mln (minus 17.9% to the same indicator for the end 2015). Net debt/EBITDA as at the end of the reporting period amounted to 0.82 versus 0.91 for the end 2015. The main cause of the indicators reduction (Net debt and Net debt/EBITDA) is the total debt reduction of the Group due to the funds received from the additional issue of the ordinary shares of Lenenergo within the framework of the arrangements carrying out for the financial and economic position improvement of Lenenergo.

Bonds

In 2016, the Group fulfilled its liabilities to the full extent for the coupon yield payout on the 8^th coupon of the bonded loan of series 04 and on the 6^th coupon of the bonded loan of series BO-01 at the sum of RUB 123,420. In April 2016 the bonded loans of series BO-01 (was repaid according to a term) were repaid and of series 04 were repaid early.

Dynamics of key IFRS indicators of Lenenergo, RUB mln:

EBITDA is calculated as profit before tax + depreciation of property, plant and equipment and amortization of intangible assets + finance costs - finance income  

Net debt is calculated as the sum of long-term and short-term borrowings - cash and cash equivalents and short-term investments as at the end of the period.  

Dynamics of key indicators of the Consolidated Statement of Financial Position, RUB mln:

Dynamics of key indicators of the Consolidated Income Statement dynamics for 5 years, RUB mln:

Financial statements prepared in accordance with IFRS and other publications for investors are available on the website of Lenenergo in Investor Relations section (www.lenenergo.ru)