April 27, 2018. Moscow, Russia.
PJSC RusHydro (MOEX, LSE: HYDR; OTCQX: RSHYY) announces
non-consolidated financial results under Russian accounting standards
(RAS) for the first quarter ended March 31, 2018.
Key highlights:
Introduction of a surcharge (premium) to
capacity prices in I and II price zones to attain base level of
end-user tariffs in the Far East of Russia had a major effect on
PJSC RusHydro indicators[1];
Revenue – RUB 40,006 mn (+45%);
Operating expenses – RUB 23,454 mn (+77%);
EBITDA – RUB 20,701 mn (+11%);
Reported net profit – RUB 12,006 mn (-11%),
adjusted net profit – RUB 11,838 mn (+6%).
Key financials for 1Q 2018 under RAS (in RUB mn)
|
1Q’18
|
1Q’17
|
chg
|
Revenue
|
40,006
|
27,678
|
45%
|
Operating expenses
|
(23,454)
|
(13,212)
|
77%
|
Operating profit
|
16,552
|
14,466
|
14%
|
EBITDA[2]
|
20,701
|
18,609
|
11%
|
Net profit
|
12,006
|
13,529
|
-11%
|
Net profit (adj.)[3]
|
11,838
|
11,189
|
6%
|
Revenue
In the first quarter of 2018, revenue increased by
45% or RUB 12,238 mn to RUB 40,006 mn as compared to the
corresponding period last year. The underlying factors behind the
change in revenue were:
introduction of a surcharge (premium) to
capacity prices in I and II price zones to attain base level of
end-user tariffs in the Far East of Russia2 in the amount
of RUB 9,554 mn (revenue increase of 34.5%);
strong operational results as electricity
production by PJSC RusHydro’s HPPs increased by 7.4% following
increase of water inflow to the reservoirs of the Group’s
hydropower plants, primarily on the Volga-Kama cascade.
Revenue breakdown (RUB mn)
|
1Q’18
|
1Q’17
|
chg
|
Electricity sales
|
19,055
|
16,530
|
15%
|
Capacity sales
|
20,817
|
11,035
|
89%
|
Other sales
|
134
|
113
|
20%
|
TOTAL
|
40,006
|
27,678
|
45%
|
Operating expenses
Operating expenses in the first quarter of 2018
increased by 77% to RUB 23,454 mn as compared to the same period of
2017, including an increase of 72% as a result of special
contribution payment into the regional budgets under the Resolution
of the Russian Government No. 895. The special purpose contributions
in the reporting period amounted to RUB 9,554 mn.
Excluding special purpose contributions to the
budgets of Far Eastern regions operating expenses increased by 5% as
a result of the following factors:
decrease in tax allowance on movable assets;
water tax rate increase;
rent increase following an agreement with
Zaragizhskaya small HPP in the second quarter of 2017 and additional
rent increase of Gotsaltinskaya GES in second half of 2017.
Operating expenses breakdown (in RUB mn)
|
1Q’18
|
1Q’17
|
chg
|
Power system services, incl.:
|
10,289
|
732
|
-
|
Special purpose contributions to regional budgets
|
9,554
|
-
|
-
|
Depreciation
|
4,149
|
4,142
|
0%
|
Purchased electricity and capacity
|
2,042
|
1,927
|
6%
|
Property tax
|
1,842
|
1,719
|
7%
|
Labor expenses, taxes and contributions
|
1,671
|
1,619
|
3%
|
Other third-party services
|
814
|
719
|
13%
|
Rent
|
487
|
398
|
22%
|
Repairs & maintenance
|
458
|
373
|
23%
|
Security expenses
|
433
|
410
|
6%
|
Insurance expenses
|
403
|
342
|
18%
|
Water tax
|
399
|
309
|
29%
|
Leasing expenses
|
0
|
26
|
-
|
Other
|
467
|
496
|
-6%
|
TOTAL
|
23,454
|
13,212
|
77%
|
Profit
Operating profit for the first quarter of 2018
increased by 14% as compared to the same period last year and
amounted to RUB 16,552 mn.
EBITDA increased by 11% - from RUB 18,609 mn to
RUB 20,701 mn.
RusHydro's net profit for the reporting period
decreased by 11% to RUB 12,006 mn.
Net profit adjusted for non-cash items increased
by 6% and reached RUB 11,838 mn. The difference between the reported
and adjusted net profit is attributed mainly to the following
non-cash effects:
gain on mark-to-market revaluation of
financial investments in the amount of RUB 924 mn;
loss (net) on reversal of bad debt reserves
in the amount of RUB 784 mn;
gain from other reserves in the amount of RUB
28 mn.
RusHydro's financial position as of March 31, 2018
The Company's total assets increased by RUB 7,537
mn as of March 31, 2018, or 1% against the similar figure as of
December 31, 2017, reaching RUB 990,716 mn.
As of March 31, 2018, total liabilities decreased
by 3% or RUB 4,467 mn as compared to the similar figure as of
December 31, 2017 and amounted RUB 152,966 mn.
he Company's debt portfolio decreased by 8% as
compared to the beginning of the reporting year from RUB 121,956 mn
to RUB 112,425 mn. Long-term loans comprise 83% of the total
portfolio.
The Company's equity in the first quarter of 2018
increased by 1% to RUB 837,690 mn against RUB 825,684 mn as of the
beginning of the reporting year.
The full financial statements
are available on the Company’s website at:
https://www.eng.rushydro.ru/investors/reports
[1]
In July 2017, the Resolution of the Russian Government No. 895 “On
reaching basic rates (tariffs) for electric power (capacity) in the
territories of the Far East Federal region (the “Far East”)”
became effective, under which rates for consumers in the territories
of the Far East should be reduced starting from 1 January 2017 to
the basic level (RUB 4.00 / kWh). According to the Resolution of the
Russian Government No. 1614-r of 28 July 2017, PJSC RusHydro was
appointed as the recipient of a premium to the price for capacity
provided by the Company in the price zones of the wholesale market
under CCS agreements. The premium to the price for capacity is set
in order to achieve the basic level of rates (tariffs) for
electricity (capacity) planned for the next regulation period in the
Far East constituent regions. Within the amounts defined by
Resolution No. 1615-r of the Russian Government dated 28 July 2017,
the Company translates the collected amounts of margin in the form
of free-of-charge targeted contributions to the budgets of the
respective regions. The Group companies being guaranteeing suppliers
will receive compensation for the shortage of income related to the
reduction of rates, through subsidies from the Far East constituent
regions. In November 2017, according to the Resolution of the
Russian Government No. 2527-r of 15 November 2017 the rate for
consumers in the territories of the Far East basic was set at RUB
4.30 / kWh.
[2]
EBITDA calculated as gross profit before depreciation.
[3]
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.
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