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PJSC RusHydro (HYDR)
PJSC RusHydro: RusHydro announces full year 2018 IFRS results
14-March-2019 / 11:38 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 full year 2018 IFRS results
March 14, 2019. Moscow, Russia. RusHydro Group (hereinafter referred to as
the "Group", ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces its
audited consolidated financial statements for the year ended December 31,
2018, prepared in accordance with International Financial Reporting
Standards (IFRS).
Key highlights for FY2018:
- Financial results for 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 - RUB 400,418 mn (+5.1% y-o-y);
- EBITDA increased by 5.3% in FY2018 to RUB 109,673 mn;
- Operating expenses increased by 5.1%, mainly as a result of fuel cost
increase;
- Net profit - RUB 31,837 mn (+28.5% y-o-y); adjusted net profit - RUB
70,757 mn (+7.6% y-o-y);
- As of January 1, 2018 RusHydro Group has changed its accounting policy to
reflect the value of property, plant and equipment measured at historic cost
excluding depreciation and impairment losses. Financial results of 2017 has
been restated in accordance with the new accounting policy.
FY2018/2017 highlights (in RUB mn)
FY2018 FY2017 chg,%
(restated)
Revenue 400,418 380,864 5.1%
Operating expenses 314,850 299,662 5.1%
Other operating profit 5,452 690 -
Operating profit* 91,020 81,892 11.1%
EBITDA** 109,673 104,180 5.3%
Net profit 31,837 24,774 28.5%
Net profit (adj.)*** 70,757 65,738 7.6%
Operating results
Total electricity generation by RusHydro Group's power plants including
Boguchanskaya HPP reached 34,336 GWh (-2.5%) in the fourth quarter of 2018,
in 2018 - 144,225 (+2.8%) including Boguchanskaya HPP vs electricity
consumption increase of only 1.5% in Russia for the same period. In 4Q of
2018 total electricity generation by RusHydro Group's hydropower and pumped
storage plants decreased by 5.4% to 21,865 GWh, by the Group's thermal power
plants - by 1.3% to 9,030 GWh, while electricity generation by renewables
increased by 2.7% to 117 GWh as compared to the same period of 2017. In 2018
total electricity generation by RusHydro Group's hydropower and pumped
storage plants increased by 2.6% to 98,432 GWh, by the Group's thermal power
plants - by 3.9% to 31,752 GWh, while electricity generation by renewables
decreased by 1.9% to 431 GWh as compared to 2017. Total electricity
generation by Boguchanskaya hydropower plant**** in 4Q 2018 amounted to
3,324 GWh (+17.7%), in 2018 - 13,610 (+2.4%).
The underlying factors of the production change in 2018 were:
? total water inflow to the majority of reservoirs of the Volga-Kama cascade
was higher than normal;
? total water inflow to hydropower plants of Siberia was at the normal level
or slightly above it;
- total water inflow to the reservoirs of HPPs in the South of Russia - at
the normal level;
- growth of electricity generation by thermal power plants in the Far East
by 5.0% (to 34,464 GWh) following a decrease in production by HPPs operating
in United Power System of the East as compared to 2017 as well as increase
in consumption in the region by 3.7%.
In 2018, heat output by thermal plants of RAO ES of East decreased by 0.9%
to 29,650 thousand GCal as compared to 2017. The decrease came on the back
of higher temperatures in all the regions of the Far East with an exception
of Kamchatka. In the fourth quarter of 2018 heat output decreased by 10.2%
to 10,077 thousand GCal as a result of higher air temperatures air
temperatures in all the regions of the Far East with an exception of
Chukotka.
In the fourth 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 5,567 GWh, a 3.8% decrease as compared to the
same period of 2017. In 2018, output decreased by 2.2% as compared to the
last year and amounted to 20,273 GWh.
.
Key events 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 in the amount of RUB 20 bn. The LPNs will mature in 2021
and bear an interest rate of 7.4% per annum payable twice per year. 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, RusHydro Group 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-' 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 October 4, 2018, the Group has adopted the new edition of its
Environmental Policy approved by RusHydro's Board of Directors in August
2018. The policy provides for increase in low-carbon power generation
capacity, reduction of greenhouse gas (GHG) emissions both in absolute terms
and in terms of GHG intensity and protection of biodiversity;
- On October 26, 2018, Vostochnaya combined heat and power plant (CHP) was
inaugurated in Vladivostok, the first major facility in the power industry
of Primorskiy Krai's capital in 45 years The plant's installed electric
capacity is 139.5 MW, heat output capacity - 432 Gcal/h and has project
annual output of 791 GWh and 1,377 thousand Gcal, respectively;
- On November 11, 2018, the Group inaugurated a unique 900 KW wind power
plant in Tiksi village of the Sakha (Yakutia) Republic. Three unique wind
turbines are engineered to operate in extreme weather conditions of the
Polar region;
? On November 21, 2018, PJSC RusHydro made a debut placement of dim-sum loan
participation notes in the amount of CNH 1.5 bn. The LPNs will mature in
2021 and bear an interest of 6.125% p.a. payable twice per year. The
following ratings have been assigned to the issue: S&P: "BB+" / Moody's:
'Ba1' / Fitch: 'BB+' / ACRA 'AAA(RU);
? On November 27, 2018, PJSC RusHydro has placed loan participation notes in
the amount of RUB 15 bn. The LPNs will mature in 2022 and bear an interest
of 8.975% p.a. payable twice per year. The following ratings have been
assigned to the issue: S&P: "BB+" / Moody's: 'Ba1' / Fitch: 'BB+' / ACRA
'AAA(RU);
? On December 28, 2018, RusHydro Group commissioned third hydropower unit at
Ust-Srednekanskaya HPP in Magadan region. The facility's installed capacity
increased by 142.5 MW and reached 310.5 MW.
Revenue
2018/2017 (in RUB mn)
FY2018 FY2017 chg, %
Electricity sales 269,668 258,663 4.3%
Incl. grants as per Resolution of the 26,300 17,254 52.4%
Russian Gov't No. 895*****
Capacity sales 43,833 40,881 7.2%
Heat and hot water sales 40,150 38,907 3.2%
Other sales 31,419 26,922 16.7%
Other government grants 15,348 15,491 -0.9%
Total revenue 400,418 380,864 5.1%
In 2018, total revenue of the Group increased by 5.1% to RUB 400,418 mn as
compared to RUB 380,864 in 2017. The change is associated with the following
key factors:
- increase in revenue from electricity sales (including government
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