Main results of the reporting period

mln rub, unless otherwise specified

Notes:

EBITDA rate is shown after deduction of the reserve balances for devaluation of debt financial investments.
EBITDA = Profit before tax + Depreciation + Interest payable - Reserve balances for devaluation of debt financial investments.
Connected capacity rate is stated on the basis of constant technological connection (without generation). Data for 6 months of 2019 are preliminary. 

"Profit of the Company by the results of the six months of 2019 amounted to 7.8 bn rub, which is 1.4 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 standing of the Company is consistently stable, level of profitability has increased, Net debt/EBITDA Ratio (for 4 quarters) has been decreased to 0.68õ".

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

Explanations for operating results

An increase in the useful net supply in the 1st half of 2019 by 0.6% compared to the 1st half of 2018 is due to an increase in electricity consumption in all consumer groups, including large industrial enterprises and the population in the Leningrad Region.

Loss reduction by 0.91 percentage points occurred due to the implementation of the program to reduce electricity losses, which includes measures to modernize the electricity accounting system, identify unaccounted and non-contractual electricity consumption.

Explanations for financial results

The revenue of "Lenenergo" PJSC for 6 months of 2019 amounted to 39,799 mln rubles, including:

Revenue for electricity transmission services for 6 months of 2019 amounted to 37,307 million rubles, which is 12.0% (3,993 mln rubles) higher than the rate value for 6 months of 2018 due to increased electricity consumption and return  of the accumulated lost income and tariff revenue transfer (smoothing) by regional regulators.

Revenue from technological connection services for the 6 months of 2019 amounted to 2,292 million rubles, which is 14.1% (284 million rubles) higher than the same indicator of the previous period. The excess is due to the implementation in the first half of 2019 of obligations under the agreement with "Gazprom" PJSC for the connection of the "Nord Stream 2" gas pipeline facilities in the Leningrad Region.

Revenue from other activities for 6 months of 2019 amounted to 201 million rubles, and 25.8% (70 million rubles) lower than the same period last year rate due to transfer of outdoor lighting objects "SPb power Network" JSC to SPb State Unitary Enterprise"Lensvet" for exchange agreement.

The price cost of services rendered by "Lenenergo" PJSC for the reporting period amounted to 28,098 million rubles and remained almost at the level of 6 months of 2018. The main reasons for the lack of growth in the total price cost value were the decrease in the cost of electricity transmission services of third-party territorial network organizations in the Leningrad Region and the transfer from the profit of most of the property tax to other expenses.

Net profit of "Lenenergo" PJSC for reporting period amounted to 7,796 mln rub, which is 36.1% higher than that of the previous year.

EBITDA rate of "Lenenergo" PJSC for the reporting period amounted to 16,762 mln rub, which is 23.5% higher than the same rate of the previous period, mainly by the growth of the revenue from electric power transmission services. 

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 – 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" PJSC amounted to 221,915 mln rub, which is 3.4% higher than the same rate at the end of 2018. The change in assets is associated with the implementation of the investment program by the Company and the receipt of a positive financial result for the reporting period. The growth in net assets for 6 months of 2019 amounted to 6,457 mln RUB. (4.6%).

Return on equity (ROE) of "Lenenergo" PJSC amounted to 8.5%, which is 1.1 percentage points. higher than in 2018. The improvement of the rate is associated with an increase in the Company's net profit (for 4 quarters).

The loan portfolio of "Lenenergo" PJSC  in the form of short-term and long-term credits and loans  of the company at the end of the reporting period amounted to 30 931 million rubles. Reduction of debt compared to the beginning of 2019 amounted to 3,607 million rubles, including in the amount of the main debt - 3,597 million rubles. - credits repaid due to positive net cash flow from operating activities.

As of June 30, 2019, Net Debt / EBITDA (for 4 quarters) rate of "Lenenergo" PJSC amounted to 0.68x versus 1.10x as of the end of 2018. The dynamics of the rate is due to a significant decrease in the Company's net debt for
6 months of 2019 with a simultaneous increase in EBITDA.

Investments

mln rub, unless otherwise specified

Notes:

Actual rates for the 9 months of 2019 were generated on the basis of operational data as of October 25, 2019 

Amount of capital investments for the reporting period amounted to 7,954 million rubles, which is 49.8% higher than the rate for the same period in 2018 (5,309 million rubles). 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.