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PJSC RusHydro (HYDR)
PJSC RusHydro: RusHydro announces 9M 2018 IFRS results
11-Dec-2018 / 14:32 CET/CEST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer / publisher is solely responsible for the content of this
announcement.
RusHydro announces 9M 2018 IFRS results
December 11, 2018. Moscow, Russia. RusHydro Group (hereinafter referred to
as the "Group", ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces its
condensed consolidated interim unaudited financial information prepared in
accordance with International Financial Reporting Standards (IFRS) for the
3rd quarter and 9 months of 2018.
Key highlights for 3Q and 9M of 2018:
- Financial results for 3Q and 9M of 2018 reflected strong operational
results driven by increased water inflows to major reservoirs of the
Volga-Kama cascade and increase in power demand in the Far Eastern Federal
District;
- Total revenue in 3Q - RUB 87,210 mn (+7.5% y-o-y); in 9M 2018 - RUB
288,087 mn (+7.2% y-o-y);
- EBITDA increased by 5.0% in 3Q to RUB 21,067 mn; in 9M 2018 - RUB 81,016
mn (+13.1% y-o-y);
- Operating expenses increased in 3Q and 9M by 7.6% y-o-y and 5.3% y-o-y,
respectively, mainly as a result of fuel cost increase;
- Net profit - RUB 43,033 mn (+39.7% y-o-y); adjusted net profit - RUB
48,405 mn (+18.5% y-o-y).
3Q and 9M 2018/2017 highlights (in RUB mn)
3Q/18 3Q/17 chg. 9M'18 9M'17 chg.
Revenue 87,210 81,088 7.5% 288,08 268,742 7.2%
7
Operating expenses 73,702 68,482 7.6% 227,77 216,218 5.3%
7
Other operating 444 690 -35.7% 5,340 690 673.9%
profit
Operating profit[1] 13,952 13,296 4.9% 65,650 53,214 23.4%
EBITDA[2] 21,067 20,058 5.0% 81,016 71,605 13.1%
Net profit 6,345 8,501 -25.4% 43,033 30,804 39.7%
Net profit (adj.)[3] 9,973 8,557 16.5% 48,405 40,855 18.5%
Operating results
Total electricity generation by RusHydro Group's power plants reached 32,246
GWh (+3.9%) in the third quarter of 2018, in 9M - 99,618 (+5.3%) vs
electricity consumption increase of only 1.6% in Russia for the same period.
In 3Q of 2018 total electricity generation by RusHydro Group's hydropower
and pumped storage plants increased by 4.3% to 25,961 GWh, by the Group's
thermal power plants - by 2.4% to 6,197 GWh, while electricity generation by
renewables decreased by 8.4% to 87 GWh as compared to the same period of
2017. In nine months of 2018 total electricity generation by RusHydro
Group's hydropower and pumped storage plants increased by 5.1% to 76,582
GWh, by the Group's thermal power plants - by 6.2% to 22,722 GWh, while
electricity generation by renewables decreased by 3.5% to 314 GWh as
compared to the same period of 2017. Total electricity generation by
Boguchanskaya hydropower plant4 in 3Q 2018 amounted to 4,122 GWh (+10.9%),
in 9M - 10,286 (-1.7%).
The underlying factors of the production change in January-September 2018
were:
- total water inflow to reservoirs of the Volga-Kama cascade in the first
quarter of the year was 1.2-2.5x higher than normal, in the second quarter
of 2018 - lower than normal, in the 3rd quarter - at the normal level;
- total water inflow to hydropower plants of Siberia was at the normal
level, to HPPS in the South of Russia - slightly below the normal level;
- growth of electricity generation by thermal power plants in the Far East
by 7.3% (to 24,550 GWh) following increase in consumption in the region by
5.3% as well as increase in electricity sales to China and UES of Siberia by
4.0%.
During the nine months of 2018, heat output by thermal plants and boilers of
RusHydro Group in the Far East increased by 4.6% to 19,574 thousand GCal as
compared to the corresponding period of 2017. The increase came on the back
of lower temperatures in all the regions of the Far East in the first
quarter of the year with an exception of Chukotka Autonomous Okrug. Slight
decrease in heat output in the third quarter is a result of higher air
temperatures.
In the third quarter of 2018, total electricity output by energy retail
companies of ESC RusHydro subgroup - JSC ESC RusHydro, PJSC
Krasnoyarskenergosbyt, JSC Chuvashskaya Electricity Sales Company and PJSC
Ryazanenergosbyt, amounted to 4,191 GWh, a 4.4% decrease as compared to the
same period of 2017, for the nine months of 2018 - 14,706 GWh, a decrease of
1.5% as compared to the corresponding period last year.
Increase in electricity output by PJSC Krasnoyarsenergosbyt and JSC
Chuvashskaya Electricity Sales Company for the nine months of the year is
driven by extension of heating season in the Krasnoyarskiy Krai until May
31, 2018 and climate conditions in Chuvashia. Decrease in output by PJSC
Ryazanenergosbyt came on the back of cancellation of service with glass
production factory in Ryazan. Negative performance of JSC ESC RusHydro was a
result of cancelation of service agreement with OJSC Kaustik (JSC Bashkir
Soda Company Group).
Key events of the first half of 2018
- On February 7, 2018, RusHydro Group's financial debt decreased by RUB 26
bn following exclusion of guarantee obligation between PJSC RusHydro and
State Corporation Vnesheconombank on PJSC Boguchanskaya HPP loan given out
by the bank in 2010. The lending bank supported the termination following
completion of construction and ramp-up of the hydropower plant, and taking
into consideration PJSC Boguchanskaya HPP's stable financial and operational
results and its ability to service the loan independently. As a result, the
Group's total debt load decreased significantly;
- On February 15, 2018, PJSC RusHydro has successfully placed loan
participation notes (LPNs) issued by RusHydro Capital Markets DAC. RusHydro
used the proceeds from the RUB 20 bn Eurobond issue to refinance its current
loan portfolio and for general corporate purposes. The LPNs will mature in
2021 and bear an interest rate of 7.4% per annum. The following ratings have
been assigned to the issue: S&P: "BB+" / Moody's: 'Ba1' / Fitch: 'BB+' /
ACRA 'AAA(RU)';
- On February 27, 2018, Standard & Poor's Global Ratings Services raised
long-term corporate credit ratings on PJSC RusHydro to 'BBB-' with 'Stable'
outlook. Short-term corporate credit was raised to '?-3' respectively;
- On June 27, 2018, AGM of PJSC RusHydro elected new Board of Directors and
approved 2017 dividends of RUB 0.0263335 per share in total amount of RUB
11.2 bn;
- On July 5, 2018, PJSC RusHydro has sold shares held in PJSC Inter RAO in
the total amount of 5,131,669,622.18 representing 4.915% of authorized share
capital of PJSC Inter RAO to JSC Inter RAO Capital;
- On August 1, 2018, Fitch Ratings Ltd. raised PJSC RusHydro's long-term
foreign currency issuer default rating to 'BBB-' from 'BB+' with 'Stable'
outlook. Fitch quoted the Company's solid financial and operational
performance, reduction of debt aided by high level of government support;
- On August 7, 2018, the Board of Directors re-elected Deputy Chairman of
the Government of the Russian Federation - Plenipotentiary Representative of
the President in the Far Eastern Federal District Yury Trutnev as its
Chairman and elected members to the Committees of the Board of Directors;
- On September 10, 2018, RusHydro inaugurated Vostochnaya combined heat and
power plant (CHP) in Vladivostok. The gas-fired power plant with electric
capacity of 139.5 MW and heat output capacity of 432 Gcal/h has annual
output of 791 GWh and 1.38 million Gcal, respectively.
Revenue
Revenue breakdown in 3Q and 9M 2018/2017 (in RUB mn)
3Q'18 3Q'17 chg 9M'18 9M'17 chg
Electricity sales 62,602 58,758 6.5% 199,196 185,466 7.4%
Incl. grants as per 6,598 10,648 -38.0% 19,794 10,648 85.9%
Resolution of the
Russian Gov't No. 895
5
Capacity sales 10,420 9,923 5.0% 31,181 29,763 4.8%
Heat and hot water 2,905 2,786 4.3% 26,998 25,453 6.1%
sales
Other sales 8,290 6,919 19.8% 20,981 18,570 12.5%
Other government 2,993 2,702 10.8% 9,821 9,490 3.5%
grants
Total revenue 87,210 81,088 7.5% 288,087 268,742 7.2%
For the nine months of 2018, total revenue of the Group increased by 7.2% to
RUB 288,087 mn as compared to RUB 268,742 in the corresponding period of
2017. The change is associated with the following key factors:
- increase in revenue from electricity sales (including government grants5)
of RAO ES East subgroup by RUB 11,084 mn on the back of tariff and sales
volume growth;
- increase in revenue from electricity sales of PJSC RusHydro by RUB 4,621
mn as a result of electricity production growth;
- increase in heat and hot water sales revenue by RUB 1,545 mn following
tariff and production volume growth;
- increase in capacity sales revenue by RUB 1,418 mn on the back of sales
volume growth of PJSC "DEK";
- increase in revenue of ESC RusHydro subgroup by RUB 1,411 mn as a result
of production growth and increase in tariffs;
- increase in other sales revenue of RUB 2,321 mn is mainly driven by
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