A meeting of the Company’s Board of Directors was held on 29 December 2020, which approved the Company’s Business Plan for 2021 and forecast indicators for 2022-2025. The scenario conditions for the formation of the Business Plan for 2021 provide for indexation of tariffs for electric energy transmission services not higher than the forecast inflation, increase in labour productivity, decrease in the level of specific operating expenses by at least 2%, as well as indicators of dividend policy in accordance with Order of the Government of the Russian Federation dated 29.05.2017 ¹ 1094-r.

Indicators of the Company’s Business Plan for 2021:

Data in mln RUB, unless specified otherwise

^[1] Revenue net of cost of sales, selling and administrative expenses

^[2] EBITDA is calculated as follows: net profit + profit tax and other similar mandatory payments + interest payable + depreciation charges

The volume of electricity transmission services, according to the Business Plan for 2021, will increase relative to the expected fact in 2020 by 0,4% and will amount to 45 421 million kWh. The size of the relative amount of electricity losses planned for 2021 is lower than the expected level of 2020 by 0,38 p.p. and is 9,43%. The reduction in the level of losses in 2021 in comparison with the expected result of 2020 is due to the planned implementation of measures to reduce losses, including the performance of work by energy service companies.

The growth in the revenue from services for the transmission of electric energy by 3,6% planned in the Business Plan for 2021 relative to the expected fact in 2020 is due to the expected increase in the volume of services by 0,4% and a change in the single “boiler” tariffs from 1 July 2021. Revenue from services for grid connection in 2021 is expected to be 1 389 million rubles, which is 6,4% higher than the expected amount of revenues at the end of 2020. The increase in the revenue is because of the conclusion of large grid connection agreements due in 2021. In 2021, the Company will continue to work to increase the volume of non-regulated services and predicts that it will receive revenue from other activities in the amount of at least 3 089,6 million rubles.

The growth in the cost of sales relative to the expected result of 2020 is mainly due to an increase in the price of purchased electricity to compensate for losses, an increase in the cost of services of territorial grid companies, for depreciation of newly commissioned facilities of the investment program, and is also due to an increase in the volume of non-regulated services.

Earnings before interest, taxes, depreciation and amortization (EBITDA) is projected above the expected fact in 2020 and will amount to 18 370 million rubles. The main risks of deviating the fact from the forecast in 2021 may be the slower pace of economic recovery in the regions of presence, as well as an increase in overdue debt for services rendered by the company. The positive factors may be the excess of the forecast for the volume of services for the transmission of electricity and the leading effects from the implementation of the Digital Transformation Program. Net profit for 2021 is projected in the amount of 2 505 million rubles.

Other IR-news of the Company can be found at: https://www.mrsk-1.ru/ru/investors/presentations/ir_news/.