Key Results in the Reporting Period

RUB mln unless otherwise stated

Operating results

Notes: 

EBITDA is net of the reserve balance for impairment of debt financial investments.  EBITDA: Earnings before Interest, Tax, Depreciation and Amortization, less Reserve Balance for Impairment of debt financial investments.

“The financial standing of Rosseti Lenenergo, PJSC, remains stable in relation to 2019. Despite the challenging epidemiological situation associated with the spread of the COVID-19 coronavirus infection, the company provides funding for all necessary works to prepare the infrastructure for the autumn-winter period in order to ensure the reliability and quality of the electricity distribution and technological connection services provided to applicants”

- Aleksey Aleksandrovich Polinov, Deputy General Director

for Economics and Finance of Rosseti Lenenergo

Notes to the Operating Results 

The decrease in the net supply for 9M2020 by 3.8% compared to the actual indicator for 9M2019 was due to the lower electricity consumption resulting from the uncharacteristically high ambient temperature in the regions of presence of Rosseti Lenenergo, PJSC in the first quarter of 2020, anti-epidemic measures in the second and third quarters of 2020, and general adverse trends in the economy, which affected the reduction in consumption by large enterprises.

The losses decreased relative to the actual indicator of 9M2019 by 99 mln kWh or by 3.8%. The decrease in electricity losses (in real and percentage terms) was due to implementing activities under the Electricity Loss Reduction Program of Rosseti Lenenergo, PJSC, which includes measures to modernize the electricity metering system. In addition, the amount of losses in real terms was affected by a decrease in electricity consumption. 

Notes to the Financial Results

Revenue of Rosseti Lenenergo, PJSC for 9M2020 amounted to RUB 58,826 mln, including: 

Electricity distribution revenue for 9M2020 amounted to RUB 54,858 mln, which is RUB 131 mln or 0.2% higher than the same indicator for 9M2019 due to the tariff growth.

Grid connection revenue for 9M2020 amounted to RUB 3,701 mln, which is RUB 259 mln or 7.5% higher year on year. The increase in revenue is associated with the fulfillment of obligations for technological connection of a number of large applicants.

Other revenue for 9M2020 amounted to RUB 267 mln, which is 9.3% or RUB 27 mln lower than the same indicator in 2019 due to a decrease in revenue under electric grid property lease agreements.

Cost of services provided amounted to RUB 42,505 mln in the reporting period, which is RUB 917 mln or 2.2% higher year on year. Due to the challenging epidemiological situation and the introduction of a high-alert regime in the territories of the Company’s presence, a part of the planned expenses was postponed to the 4th quarter of the current year.

Net profit amounted to RUB 11,823 mln in the reporting period, which is RUB 1,861 mln or 18.7% higher year on year. The profit growth was largely influenced by changes in the reserves created by the Company and the deferred nature of the cost formation in the reporting period.

The EBITDA for the reporting period amounted to RUB 25,874 mln, which is RUB 2,648 mln or 11.4% higher year on year due to an increase in profit from sales net of depreciation and increase in balance of other income and expenses net of interest payable.

Principal Balance Sheet Items 

RUB mln unless otherwise stated

* in accordance with the accounting statements, taking into account the historical adjustments made to the accounting data of 2019 in connection with the amendments to PBU18/02 Accounting for Corporate Income Tax Calculations that have entered into force.

Notes: 

Net debt is calculated as long-term and short-term loans and borrowings with interest payable, less cash and cash equivalents and less short-term financial investments. ROE is calculated as (Net Profit [for 4 quarters] / Equity) * 100.

As of September 30, 2020, Rosseti Lenenergo, PJSC’s assets amounted to RUB 248,469 mln, which is 9.5% higher than at the end of 2019. The growth of assets was primarily due to the implementation of the investment program by the Company and the completed reorganization of Rosseti Lenenergo, PJSC of May 14, 2020 in the form of the merger of JSC SPb ES, JSC PES, JSC Kurortenergo and JSC TSEK. 

Net assets grew by RUB 22,920 mln, or 15.5%, for the 9M2020.

ROE amounted to 8.5%. The decrease vs. the 2019 indicator by 0.1 pp was due to the increase in the Company’s equity following the completed reorganization.

As at the end of the reporting period the non-current liabilities amounted to RUB 41,315 mln, which is higher than as at the year beginning by RUB 8,404 mln or 25.5% due to an increase in the share of long-term loan debt in the structure of the loans and borrowings portfolio (with a general decrease in the debt amount), an increase in deferred tax liabilities.

As of September 30, 2020, the short-term and long-term loans and borrowings amounted to RUB 25,572 mln. As at the end of the 3Q2020, the Company’s Net debt/EBITDA is less than 1.0.

Investments

RUB mln unless otherwise stated

Notes:  The actual figures for 9 months of 2020 are based on available information.

Capital investment totaled RUB 18,671 mln in the reporting period, or 31.6% higher than in the same period in 2019. The value of commissioned fixed assets reached RUB 14,479 mln in the reporting period, or 45.3% higher than in the same period in 2019.

The increase in the capital investments and commissioning of fixed assets for 9M2020 year on year is due to the increased scope of the investment program aimed at fulfilling obligations under the executed technological connection contracts.