July 29, 2016. Moscow, Russia.
PJSC RusHydro (MOEX, LSE: HYDR; OTCQX: RSHYY) announces its
non-consolidated financial results under Russian accounting standards
(RAS) for the six months of 2016 [i].
Key highlights:
2Q 2016 revenue – RUB 30,118 mn (+9%), 1H
2016 revenue – RUB 57,211 mn (+12%);
1H 2016 operating expenses – RUB 26,010 mn
(-9%);
2Q 2016 EBITDA – RUB 20,468 mn (+27%), 1H
2016 EBITDA – RUB 38,711 mn (+31%);
EBITDA margin in 2Q 2016 – 68% (+9 p.p.),
in 1H 2016 – 68% (+10 p.p.);
Reported net profit for 1H 2015 – RUB
28,426 mn (+41%), adjusted net profit – RUB 26,444 mn (+36%).
Key financials for 1H 2015/2016 under RAS (in RUB
mn)
|
1H’16
|
1H’15
|
chg
|
2Q’16
|
2Q’15
|
chg
|
Revenue
|
57,211
|
51,212
|
12%
|
30,118
|
27,509
|
9%
|
Operating expenses
|
(26,010)
|
(28,727)
|
-9%
|
(13,401)
|
(14,882)
|
-10%
|
Operating profit
|
31,201
|
22,485
|
39%
|
16,717
|
12,627
|
32%
|
EBITDA[ii]
|
38,711
|
29,458
|
31%
|
20,468
|
16,144
|
27%
|
Net profit
|
28,426
|
20,176
|
41%
|
13,177
|
11,433
|
15%
|
Net profit (adj.)[iii]
|
26,444
|
19,426
|
36%
|
12,071
|
11,063
|
9%
|
Revenue
In the 1st half of 2016, revenue
increased by 12% to RUB 57,211 mn as compared to RUB 51,212 mn for
the same period of 2015. The underlying factors behind the change in
revenue were:
significant increase in production and
electricity output by hydropower plants of PJSC RusHydro as a result
of: a) higher than normal water inflow to reservoirs of the
Volga-Kama cascade in the 1st half of 2016; b) water
inflow to reservoirs of Siberia, HPPs of the South and the Far East
of Russia – close to long-run average;
indexation of electricity and capacity
tariffs;
increase in capacity sales following ongoing
liberalization of hydro capacity market in the second price zone
from May 1, 2014[iv].
Revenue breakdown (RUB mn)
|
1H’16
|
1H’15
|
chg
|
2Q’16
|
2Q’15
|
chg
|
Electricity sales
|
38,933
|
34,547
|
13%
|
21,679
|
19,699
|
10%
|
Capacity sales
|
17,783
|
16,031
|
11%
|
8,164
|
7,292
|
12%
|
Other sales
|
495
|
634
|
-22%
|
275
|
518
|
-47%
|
TOTAL
|
57,211
|
51,212
|
12%
|
30,118
|
27,509
|
9%
|
Operating expenses
Operating expenses in January-June 2016 decreased
by 9% to RUB 26,010 mn as compared to the same period of 2015.
Operating expenses breakdown (in RUB mn)
|
1H’16
|
1H’15
|
chg
|
2Q’16
|
2Q’15
|
chg
|
Depreciation
|
7,510
|
6,973
|
8%
|
3,751
|
3,517
|
7%
|
Labor expenses, taxes and contributions
|
3,558
|
3,510
|
1%
|
1,744
|
1,533
|
14%
|
Purchased electricity and capacity
|
3,429
|
6,415
|
-47%
|
1,446
|
3,297
|
-56%
|
Property tax
|
3,361
|
3,294
|
2%
|
1,683
|
1,654
|
2%
|
Services of System Operator, ATS, CFS
|
1,405
|
1,387
|
1%
|
707
|
698
|
1%
|
Repairs & maintenance
|
1,300
|
1,211
|
7%
|
822
|
722
|
14%
|
Other third-party services
|
1,291
|
1,245
|
4%
|
879
|
629
|
40%
|
Security expenses
|
879
|
866
|
2%
|
474
|
471
|
1%
|
Insurance expenses
|
743
|
587
|
27%
|
390
|
309
|
26%
|
Rent
|
714
|
587
|
22%
|
373
|
300
|
24%
|
Water tax
|
614
|
459
|
34%
|
340
|
270
|
26%
|
Leasing expenses
|
104
|
152
|
-32%
|
51
|
70
|
-27%
|
Other
|
1,102
|
2,041
|
-47%
|
741
|
1,413
|
-48%
|
TOTAL
|
26,010
|
28,727
|
-9%
|
13,401
|
14,883
|
-10%
|
Major factors of change in operating expenses were
(among the highest constituent expenses):
decrease in purchased electricity and
capacity as a result of: a) decrease in purchased electricity for
sale under free bilateral agreements due to lower sales under these
contracts[v];
b) decrease in price for purchased electricity;
increase in depreciation and property tax as
a result of commissioning of new fixed assets as well as
reconstruction and modernization of operating assets;
reduction of other expenses, including
corporate and traveling expenses, utilities and other costs, by 48%
as a result of implementation of measures aimed at restraining
non-operating costs.
Profit
Operating profit for the period increased by 39%
or RUB 8,716 mn to RUB 31,201 mn.
EBITDA increased by 31% as compared to the same
period of 2015 and amounted to RUB 38,711 mn.
RusHydro's net profit for the reporting period
increased by 41% to RUB 28,426 mn. Net profit adjusted for non-cash
items increased by 36% to RUB 26,444 mn as compared to RUB 19,426 mn
in the same period of the previous year.
The difference between the reported and adjusted
net profit is attributed mainly to the following non-cash effects:
gain from mark-to-market revaluation of
listed equity stakes in the amount of RUB 2,883 mn;
regained reserves on accounts receivable in
the amount of RUB 711 mn;
expenses (net) on provision for accounts
receivable in the amount of RUB 1,697 mn;
gain from reserves for impairment of assets
in the amount of RUB 3 mn;
gain from other reserves in the amount of RUB
82 mn.
RusHydro's financial position as of June 30, 2016
The Company's total assets increased by RUB 28,781
mn as of June 30, 2016, or 3% against the similar figure as of
December 31, 2015, reaching RUB 921,412 mn.
As of June 30, 2016, total liabilities stood
almost flat as compared to the similar figure as of December 31,
2015, increasing slightly from RUB 150,095 mn to RUB 150,451 mn.
The Company's debt portfolio dropped by 1% or RUB
1,268 mn as compared to the beginning of the year from RUB 124,010 mn
to RUB 122,724 mn; long-term loans make up 96% of total debt
portfolio.
The Company's equity for the 1st half
of 2016 increased by 4% to RUB 770,895 mn against RUB 742,469 mn as
of the beginning of the reporting year.
The full financial statements are available on the
Company’s website at: https://www.rushydro.ru/investors/reports
The Company plans to publish its consolidated results for the
1st half of 2016 under International financial reporting
standards (IFRS) on August 29, 2016.
[i]
PJSC RusHydro, the parent company of RusHydro Group, includes 19
branches registered in the Russian Federation, including: branch
Bureyskaya GES, branch Volzhskaya GES, branch Votkinskaya GES,
Dagestan branch, branch Zhigulevskaya GES, branch Zagorskaya GAES,
branch Zeiskaya GES, Kabardino-Balkarsky branch, branch Kamskaya
GES, Karachaevo-Cherkessky branch, branch Cascade of
Verkhne-Volzhsky GES, branch Cascade of Kuban GES, branch Corporate
Energy University, branch Nizhegorodskaya GES, branch Novosibirskaya
GES, branch Saratovskaya GES, branch Sayano-Shushenskaya GES named
after P.S. Neporozhny, Severo-Osetinsky branch, branch
Cheboksarskaya GES.
[ii]
EBITDA calculated as gross profit before depreciation.
[iii]
Net profit adjusted for the mark-to-market revaluation of listed
equity stakes, reserves for financial investment impairment, assets
and potentially uncollectible accounts receivable, contingencies
This indicator is not reported in the official financial statements
under RAS and has been calculated and put into the press release for
reference.
[iv]
According to the decree of the government of the Russian Federation
No. 374 of April 28, 2014, “On amendments to the Regulations of
wholesale electricity and capacity market in terms of special
aspects of participation of gencos, owners of hydropower plants
located in the 2nd pricing zone, in the wholesale market” from May
1, 2014 till December 31, 2015, 35% of capacity of the hydropower
plants in the 2nd pricing zone is sold at the regulated tariffs
based on the results of the competitive capacity auctions (KOM).
According to the capacity sales liberalization schedule, from
January 1, 2016, the amount of capacity from hydropower plants in
Siberia sold at regulated tariffs, is decreased to 20% of total
sales under KOM, from May 1, 2016, - full liberalization of capacity
sales from hydropower plants in Siberia.
[v]
In accordance with capacity market regulations, in order to fulfill
obligations under bilateral agreement as well as payment liabilities
for load losses and security constraints according to the contract
volumes, a supplier under bilateral agreement is obliged to buy
electricity in the amount equal to registered amount to be supplied
under the agreement. The supplier should sign an agreement with
Trading System Administrator for electricity purchase, which is
called “electricity purchase agreement signed in order to fulfill
obligations under bilateral agreement”.
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