Key Results in the Reporting Period

RUB million unless otherwise stated

Notes:

* According to accounting reports subject to retrospective adjustments made to 2019 accounting records due to the entry into legal force of amendments to Accounting Standards 18/02 Recognizing Payment of Corporate Tax. Under the accounting reports for 2019, the net profit was RUB 12,705 million. In line with the requirements of Accounting Rules 18/02 Recognizing Payment of Corporate Tax, net profit for 2019 as adjusted by RUB 863 million and totaled RUB 13,568 million. It was an accounting (technical) adjustment, which does not affect the assessment of the Company’s performance for 2019.
** EBITDA is net of provisions for impairment of financial investments.
EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization, less Net Provisions for Impairment of Financial Investments.
*** The connected capacity equals permanent grid connection (net of generation).

“The Company’s priority amid the COVID 19 pandemic and the decline in net supply was to maintain a stable financial position. To address this challenge, “Rosseti Lenenergo”, PJSC worked consistently throughout the year to optimize its credit portfolio and improve the structure of other income and expenses. These efforts have underpinned our strong financial performance and increased margins with a low leverage”.
- Aleksey Polinov
Deputy CEO for Economics and Finances, “Rosseti Lenenergo”, PJSC

Notes to the Operating Results

The decrease in net supply for 12M 2020 by 1,045 million kWh or 3.4% year-on-year was caused by a decline in electricity consumption due to unusually high outside temperatures across the operating regions of “Rosseti Lenenergo”, PJSC in Q1 2020 and response to the COVID-19 pandemic undertaken by the federal and regional authorities in Q2 and Q3 2020.

Losses for 12M 2020 decreased by 119.8 million kWh or 3.0% year-on-year. The decrease in electricity losses (in physical terms (kWh) and as percentage (%)) was driven by the implementation of measures under the Program for Reducing Electricity Losses in the Grids of “Rosseti Lenenergo”, PJSC, including measures aimed at improving the electricity metering system. The amount of losses (in physical terms in kWh) was also affected by a decrease in electricity consumption.

Notes to the Financial Results

In 2020, “Rosseti Lenenergo”, PJSC posted a revenue of RUB 82,646 million, including:

In 2020, electricity distribution revenue totaled RUB 75,897 million, up by RUB 201 million or 0.3%year-on-year due to higher tariffs.

In 2020, grid connection revenue totaled RUB 6,340 million, up by RUB 98 million or 1.6% year-on-year. The increase in revenue was caused by the discharge of grid connection obligations towards several major customers.

Other revenue for 2020 was RUB 408 million, down by 5.6% or RUB 24 million year-on-year, due to the termination of electric grid lease agreements on completion of the reorganization of “Rosseti Lenenergo”, PJSC, through the consolidation of SPb ES JSC, PES JSC, Kurortenergo JSC, and TsEK JSC.

In the reporting period, “Rosseti Lenenergo”, PJSC’s cost of sales totaled RUB 60,379 million, up by RUB 2,100 million or 3.6% year-on-year, largely as a result of higher payroll costs (an increase in the headcount) and depreciation of fixed assets (consolidation of the assets of subsidiaries and affiliates) caused by the reorganization of the Company.

In the reporting period, “Rosseti Lenenergo”, PJSC’s net profit totaled RUB 14,147 million, up by RUB 579 million or 4.3% year-on-year. The profit growth was primarily driven by the optimization of the loan portfolio, which allowed reducing the Company’s interest expenses, as well as strong claim management and measures taken against illegal consumption.

In the reporting period, “Rosseti Lenenergo”, PJSC’s EBITDA totaled RUB 32,800 million, up by RUB 2,254 million or 7.4% year-on-year.

Principal Balance Sheet Figures

RUB million unless otherwise stated

* According to accounting reports subject to retrospective adjustments made to 2019 accounting records due to the entry into legal force of amendments to Accounting Standards 18/02 Recognizing Payment of Corporate Tax
Notes:
Net debt is calculated as long-term and short-term loans and borrowings (including outstanding interest), less cash and cash equivalents and short-term financial investments.
ROE is calculated as (Net Profit [for 4 quarters] / Equity) * 100

As at December 31, 2020, “Rosseti Lenenergo”, PJSC’s assets totaled RUB 255,092 million, up 12.5% year-on-year. The increase in assets was mainly due to the implementation of the investment program by the Company and completion of the reorganization of “Rosseti Lenenergo”, PJSC through the consolidation of SPb ES JSC, PES JSC, Kurortenergo JSC, and TsEK JSC.

In 2020, the Company’s net assets grew by RUB 24.679 million or 16.6% year-on-year.

“Rosseti Lenenergo”, PJSC’s ROE totaled 8.2%. The 1 p.p. decrease year-on-year was due to the increase in the Company’s equity post reorganization.

As at the end of the reporting period, long-term liabilities of “Rosseti Lenenergo”, PJSC was RUB 43,250 million, up RUB 10,682 million or 32.8% year-on-year, due to an increase in the share of long-term borrowings in the loan portfolio (as a result of refinancing short-term loans) and an increase in deferred tax liabilities.

Short-term and long-term loans and borrowings of “Rosseti Lenenergo”, PJSC as at December 31, 2020 totaled RUB 29,047 million (up by RUB 833 million year-on-year). The increase in net debt is mainly due to an increase in the share of long-term targeted financial investments. At the end of 2020, the Company’s Net Debt/EBITDA was 0.83.

Investment

RUB million unless otherwise stated

During the reporting year, capital investment totaled RUB 31,566 million, up 21% year-on-year. During the reporting year, commissioned capacity totaled RUB 32,704 million, up 36% year-on-year.

Capital investment and commissioning of fixed assets in 2020 grew year-on-year as a result of an increase in commitments under grid connection agreements signed by “Rosseti Lenenergo”, PJSC.