February 27, 2020. Moscow,
Russia. PJSC
RusHydro (MOEX, LSE: HYDR; OTCQX: RSHYY) announces non-consolidated
financial results under Russian accounting standards (RAS) for the
full year ended December 31, 2019.
Key
highlights:
EBITDA – RUB 78,237 mn (-5%);
Reported net profit – RUB 38,645 mn (+5%);
Since July 1st 2017, a surcharge to capacity
prices in 1 and 2 price zones in order to attain base level of
end-user tariffs in the Far East of Russia is reflected in PJSC
RusHydro’s revenue and operating expenses1
. In 2019, the surcharge totaled RUB 32,077 mn, in the 2018 –
RUB 35,032 mn; Adjusted for the surcharge revenue and expenses (here
and below in the text) were:
Revenue – RUB 123,103 mn;
Operating expenses – RUB 61,807 mn.
Key
financials for 4Q and 2019 under RAS (in RUB mn), excluding surcharge
|
2019
|
2018
|
chg
|
4Q'19
|
4Q'18
|
chg
|
Revenue (adj. for surcharge)
|
123,103
|
127,781
|
-4%
|
33,717
|
31,724
|
6%
|
Operating expenses (adj. for surcharge)
|
(61,807)
|
(61,815)
|
-0.01%
|
(18,596)
|
(18,457)
|
0.8%
|
Operating profit
|
61,296
|
65,966
|
-7%
|
15,121
|
13,267
|
14%
|
EBITDA2
|
78,237
|
82,498
|
-5%
|
19,437
|
17,395
|
12%
|
Net profit
|
38,645
|
36,726
|
5%
|
4,390
|
-788
|
657%
|
Net profit (adj.)3
|
44,194
|
43,072
|
3%
|
9,939
|
6,057
|
64%
|
Revenue
In 2019, revenue decreased by 4% or RUB 4,678 mn
to RUB 123,103 on the back of record HPP production in 2018
compounded by lower water inflows to the reservoirs of the Volga-Kama
cascade in the first half of 2019.
Revenue breakdown (RUB mn)
|
2019
|
2018
|
chg
|
4Q'19
|
4Q'18
|
chg
|
Electricity sales
|
78,596
|
85,059
|
-8%
|
21,266
|
20,067
|
6%
|
Capacity sales
|
44,039
|
42,327
|
4%
|
12,259
|
11,562
|
6%
|
Other sales
|
468
|
395
|
18%
|
192
|
95
|
102%
|
TOTAL
|
123,103
|
127,781
|
-4%
|
33,717
|
31,724
|
6%
|
Operating
expenses
Operating expenses in 2019 stayed flat to 2018 and
amounted to RUB 61,807 mn following execution of plan on optimization
of operational expenses based on independent external audit review.
The main changes were observed in the following
items:
Property tax (decrease of RUB 978 mn) due to
amendments to the Tax code of the Russian Federation affecting
property tax, cancelling tax for movable property effective of Jan
1, 2019;
Rent decreased by RUB 628 mn due to purchase
of Gotsatlinskaya HPP and Zaragizhskaya HPP from subsidiaries with
simultaneous increase in property tax and depreciation by RUB 183 mn
and RUB 345 mn, respectively.
Operating expenses breakdown (in RUB mn)
|
2019
|
2018
|
chg
|
4Q'19
|
4Q'18
|
chg
|
Depreciation
|
16,941
|
16,532
|
2%
|
4,316
|
4,128
|
5%
|
Purchased electricity and capacity
|
8,230
|
8,236
|
-0.1%
|
2,003
|
2,346
|
-15%
|
Labor expenses, taxes and contributions
|
7,656
|
7,448
|
3%
|
2,169
|
2,198
|
-1%
|
Property tax
|
6,162
|
7,140
|
-14%
|
1,611
|
1,621
|
-1%
|
Repairs and maintenance
|
4,259
|
3,861
|
10%
|
1,815
|
1,670
|
9%
|
Other third-party services
|
3,912
|
3,835
|
2%
|
1,370
|
1,268
|
8%
|
Power system services
|
3,127
|
3,018
|
4%
|
799
|
765
|
4%
|
Water tax
|
2,072
|
1,887
|
10%
|
562
|
417
|
35%
|
Security expenses
|
1,762
|
1,748
|
1%
|
441
|
439
|
0.5%
|
Insurance expenses
|
1,746
|
1,756
|
-1%
|
459
|
511
|
-10%
|
Rent
|
1,310
|
1,938
|
-32%
|
321
|
482
|
-33%
|
Other
|
4,630
|
4,416
|
5%
|
2,730
|
2,612
|
5%
|
TOTAL
|
61,807
|
61,815
|
-0.01%
|
18,596
|
18,457
|
1%
|
Other
income and expenses
Other income in 2019 increased by RUB 510 mn or 6%
and amounted to RUB 8,485 mn as compared to 2018.
Other expenses in 2019 decreased by RUB 4,321 mn
or 18% and amounted to RUB 19,400 mn as compared to 2018.
Profit
Operating profit in 2019 decreased by 7% or RUB
4,670 mn as compared to the same period last year and amounted to RUB
61,296 mn.
Reported net profit in 2019 increased by 5% to RUB
38,645 mn. Nonetheless, in the fourth quarter of 2019 net profit
amounted to RUB 4,390 mn as compared to net loss of RUB 788 mn in the
corresponding period of 2018.
Net profit adjusted for non-cash items increased
by 3% and reached RUB 44,194 mn. The difference between the reported
and adjusted net profit is attributed mainly to the following
non-cash effects:
loss (net) on provision for impairment of
financial investments in the amount of RUB 6,038 mn;
gain on reversal of other reserves in the
amount of RUB 487 mn.
RusHydro's
financial position as of December 31, 2019
The Company's total assets increased by RUB 27,388
mn as of December 31, 2019, or 3% against the similar figure as of
December 31, 2018, reaching RUB 1,064,194 mn.
As of December 31, 2019, total liabilities
increased by 2% or RUB 4,617 mn as compared to the similar figure as
of December 31, 2018 and amounted to RUB 190,158 mn.
The Company's debt portfolio decreased by 2% as
compared to the beginning of the reporting year and reached RUB
144,579 mn. Long-term loans comprise 83% of the total portfolio.
The Company's equity in 2019 increased by 3% to
RUB 873,979 mn against RUB 851,206 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
RusHydro
Group will announce consolidated 4Q and FY2019 IFRS results on March
5, 2019.
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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