The revenue of Lenenergo for 2016 grew by 51% and totaled RUB 59,023 mln. EBITDA doubled to RUB 23,916 mln. Net profit for the reporting period was RUB 7,703 mln (2015: RUB 144 mln).

Note:
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.

Revenue and financial result

The Group’s indicators for 2016 were essentially influenced by the subsidiaries JSC SPb ES and JSC PES, which were included in the 2015 statements as from the date of their acquisition, that is 23.12.2015 (8 days).

Group’s revenue

Sales revenue for 2016 was RUB 59,023 mln, +51.2% against the indicator for 2015 (RUB 39,027 mln).

The growth of revenue from electricity transmission services for 2016 against the year 2015 is explained by bringing the tariff and balance decisions into compliance with the current laws and partial compensation for the short-received incomes in the previous years of the regulation period.

The growth of revenue from the technological connection services for 2016 against 2015 is explained by the performance of the obligations to the applicants, which have been accumulated before 01.01.2015.

The growth of revenue from other activity is caused by the growth of the revenue in respect of identified uncontracted electricity consumption by 52%, as well as by the growth of the revenue on compensation contracts by 89%.

Group’s operating expenses

Operating expenses of the Group for the reporting period were RUB 48,613 mln, +46.9% against the similar indicator for 2015. 

Comments concerning the dynamics of the most essential cost items:

Depreciation of property, plant and equipment

Growth of costs for the depreciation of property, plant and equipment by 102.0% was due to the increase in their book value as a result of the revaluation surplus at 31.12.2015.

Depreciation of intangible assets

Growth of costs for the depreciation of intangible assets by 943.8% was due to the depreciation of the intangible assets “Income-bearing contracts”, which were recognized in the consolidated statements regarding such companies as JSC SPb ES and JSC PES at the time of their acquisition. 

Impairment / (reversal of impairment) of intangible assets

Growth of the cost item is explained by the goodwill impairment in respect of the companies JSC SPb ES and JSC PES.

Group’s operating profit

Operating profit of the Group for 2016 was RUB 10,409 mln, +75.7% against 2015.

Group’s net profit

Following 2016, the Group received net profit equal to RUB 7,703 mln (2015: RUB 144 mln). The positive dynamics of the year 2016 financial result, besides the growth of revenue on regulated types of activities and reduction in expenses for electricity transportation by 7.5%, was mainly influenced by the increase in the balance of other incomes and expenses due to the reduction in interest rates on credits and the increase in interest receivable.

EBITDA

EBITDA for 2016 was RUB 23,916 mln, +100.3% against the similar indicator for 2015 (RUB 11,943 mln).

Calculation of EBITDA, RUB mln

EBITDA margin for 2016 grew by 9.92 percentage points to 40.52%. The material positive dynamics of the indicator is explained by higher rates of the Group’s income growth against expenses.

Credit portfolio and debt position

Credit portfolio (short-term and long-term credits and loans of the company as at the end of the reporting period) was RUB 34,528 mln, -15.7% against the similar indicator as at the end of 2015. The debt reduction was due to the repayment of debt on bonded loans for the amount of RUB 6,000 mln (including, series BO-01 (RUB 3,000 mln) was repaid within the timeframe, series 04 (RUB 3,000 mln) was repaid early, on the date of the 8^th coupon payment) using the funds received from the sale of the federal loan bonds out of the money paid to the charter capital of PJSC Lenenergo in order to pay the ordinary shares of the additional issue.

Net debt following 2016 was RUB 24,091 mln, +120.7% y-o-y (end of 2015). The main reason for the increase in the net debt is a material reduction in the item “cash and cash equivalents” as a result of the expenditure of the cash received from the sale of the federal loan bonds out of the money paid to the charter capital of PJSC Lenenergo in order to pay the ordinary shares of the additional issue.

Net debt/EBITDA as at the end of the reporting period grew as a result of a more considerable growth of the net debt against the growth of EBITDA and equaled 1.01 against 0.91 as at the end of 2015. 

Investments

Capex amount in 2016 was RUB 20,760 mln, +93.5% against the similar indicator of 2015 (RUB 10,727 mln). The expenditure growth is explained by the implementation in 2016 of the actions to perform the accumulated obligations of technological connection of consumers in Saint Petersburg and the Leningrad Region, financed through the funds received from the sale of the federal loan bonds.

Dynamics of key indicators of Lenenergo, RUB mln:

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 as at the end of the reporting period.

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

Dynamics of key indicators of the Consolidated Income Statement, RUB mln: