PJSC RusHydro (HYDR)
RusHydro announces 9M 2019 IFRS results
12-Dec-2019 / 11:13 CET/CEST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
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announcement.
RusHydro announces 9M 2019 IFRS results
December 12, 2019. 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 2019.
Key highlights for the 3Q and 9M of 2019:
- Total revenue in 9M'19 was flat to 9M'18 and came in at RUB 287,620 mn
(-0.4%), in 3Q'19 - RUB 87,486 (+0.1%);
- EBITDA in 9M'19 - RUB 70,429 mn (-13.1% y-o-y); in 3Q'19 - RUB 19,659 mn
(-6.7% y-o-y);
- Operating expenses increased in 9M and 3Q by 5.2% y-o-y and 1.9% y-o-y,
respectively, mostly as a result of fuel cost increase and growth of
purchased electricity and capacity costs;
- Adjusted net profit in 9M'19 - RUB 39,842 mn (-22.1% y-o-y); net profit
in 9M'19 - RUB 35,157 mn (-23.5 % y-o-y).
- Financial results reflected decrease of electricity production in 9M'19
on the back of reduced water inflows to the majority of reservoirs of the
HPPs in the first half of the year. In 3Q 2019 production increased on the
back of rainfall flooding and increased water inflow to the following
reservoirs.
3Q and 9M 2019/2018 highlights (in RUB mn)
3Q/19 3Q/18* chg. 9M'19 9M'18* chg.
Revenue 87,486 87,385 0.1% 287,620 288,670 -0.4%
Operating expenses 74,218 72,807 1.9% 236,621 225,005 5.2%
Other operating 144 444 -67.6% 614 5,340 -88.5%
profit
Operating profit** 13,412 15,022 -10.7% 51,613 69,005 -25.2%
EBITDA*** 19,659 21,067 -6.7% 70,429 81,016 -13.1%
Net profit 5,772 7,405 -22.1% 35,157 45,985 -23.5%
Net profit 8,733 10,937 -20.2% 39,842 51,151 -22.1%
(adj.)****
Operating results
Total electricity generation by RusHydro Group's power plants amounted to
33,295 GWh in 3Q'19, an increase of 3.3% as compared to the corresponding
period last year, in 9M'19 - 91,888 (-7.7%). In 3Q'19 total electricity
generation by RusHydro Group's hydropower and pumped storage plants
increased by 4.6% to 27,168 GWh, electricity generation by the Group's
thermal power plants decreased by 2.6% to 6,036 GWh, and electricity
generation by renewables increased by 4.5% to 91 GWh as compared to the
corresponding period of 2018. Consequently, in 9M'19 of the year total
electricity generation by RusHydro Group's hydropower and pumped storage
plants decreased by 10.1% to 68,824 GWh, by renewables - by 2.0% to 308 GWh,
while electricity generation by the Group's thermal power plants increased
by 0.1% to 22,755 GWh as compared to the same period of 2018. Total
electricity generation by Boguchanskaya hydropower plant***** in 3Q'19
amounted to 4,426 GWh, an increase of 7.4% as compared to 3Q 2018, in 9M -
11,785 (+14.6%).
Heat output by RusHydro Group's thermal plants in the Far Eastern Federal
Districtin 3Q'19 increased by 13.2% to 2,168 GCal as compared to the
corresponding period last year. In 9M'19, heat output decreased by 3.1%
against 9M'18 to 18,967 GCal.
Total electricity output by RusHydro's retail companies, operating in
Chuvashia, Ryazan and Krasnoyarsk regions in the 3Q'19 decreased by 1.6% to
4,127 GWh as compared to 3Q'18. In 9M'19, total output decreased by 4.5% as
compared to the corresponding period last year and amounted to 14,051 GWh.
Key events in January - September 2019
? On January 2, 2019, the Cental and Western districts of Yakutia were
connected to the Unified Energy System of Russia. PJSC Yakutskenergo, a
subsidiary of PJSC RusHydro, transferred the supervision and control of
the territory to the System Operator;
? On February 8, 2019, PJSC RusHydro has divested its 40% share in LLC
VolgaHydro, a hydropower equipment manufacturing joint venture in the
Saratov region, to Voith Group for RUB 450 mn;
? On March 29, 2019, PJSC RusHydro and UC RUSAL commissioned the first
stage of Boguchany aluminium smelter (BoAZ), part of Boguchanskiy Energy
and Metals Complex (BEMO). Total funding of the smelter's first phase with
annual operational capacity is estimated at 298 thousand tons of aluminium
amounts to USD 1.69 bn. It is being financed by own funds of partners in
BEMO project along with project financing from VEB.RF (formerly -
Vnesheconombank);
? On April 19, 2019, The Board of Directors approved PJSC RusHydro's
dividend policy, which stipulates for a base scenario of dividend payout
ratio at 50% of the company's IFRS net profit. At the same time, a minimal
payout level is set at the average amount of dividends paid over the last
three years. Such measure guarantees shareholders a minimal dividend
amount and improves the company's investment attractiveness. The changes
to the dividend policy will be in effect for three years;
? On April 29, 2019, the first phase of placement of RusHydro's additional
share issue for the construction of Pevek-Bilibino 110 kV high-voltage
overhead lines in light of upcoming reconstruction of the Chaun-Bilibino
power system following decommissioning of the Bilibinskaya nuclear power
plant took place. PJSC RusHydro has placed 7,000,092,298 shares including
7,000,000,000 shares in favor of the Russian Federation represented by the
Federal Agency for State Property Management (Rosimushchestvo) at one
ruble per share;
? On June 28, 2019, AGM of PJSC RusHydro elected new Board of Directors
and approved 2018 dividends of RUB 0.0367388 per share in total amount of
RUB 15.9 bn (50% of the Group's net profit for 2018 under IFRS, and an
increase of 42% over the amount distributed in dividends for 2017);
? On July 17, 2019, the government of the Russian Federation approved all
projects submitted by RusHydro for construction and modernization of
thermal power plants in the Far East: construction of Artyomovskaya CHP-2,
Khabarovskaya CHP-4, second phase of Yakutskaya GRES-2 and modernization
of Vladivostokskaya CHP-2. Return on the projects will be guaranteed by
the mechanism stipulated in the government's program on thermal power
modernization;
? On September 7, 2019, RusHydro put into commission Nizhe-Bureyskaya HPP
in the Amur region. The facility's installed capacity and average annual
electricity output stands at 320 MW and 1.67 TWh, respectively. It will
supply power to customers in unified energy system of the East.
Revenue
Revenue breakdown in 3Q and 9M 2019/2018 (in RUB mn)
3Q'19 3Q'18 chg 9M'19 9M'18 chg
Electricity sales 60,260 62,526 -3.6% 194,309 198,869 -2.3%
Incl. grants as per 6,087 6,598 -7.7% 18,263 19,794 -7.7%
Resolution of the
Russian Gov't No. 895
(premium to the price
translated to the
budgets of the regions
of Russian Federation)
******
Capacity sales 11,556 10,670 8.3% 34,997 32,090 9.1%
Heat and hot water 3,082 2,905 6.1% 27,113 26,998 0.4%
sales
Other sales 8,583 8,291 3.5% 20,128 20,892 -3.7%
Other government 4,005 2,993 33.8% 11,073 9,821 12.7%
grants
Total revenue 87,486 87,385 0.1% 287,620 288,670 -0.4%
In 9M'19, total revenue of the Group amounted to RUB 287,620 mn as compared
to RUB 288,670 in the 9M'18. The change is associated with the following key
factors:
? decrease in revenue from electricity sales of PJSC RusHydro by RUB 7,652
mn due to decline in production of hydropower plants by 11%;
? increase in revenue from electricity of RAO ES East subgroup (incl.
government subsidies) by RUB 2,014 mn on the back of tariff and sales
volume growth;
? increase in revenue from electricity sales in ESC Rushydro subgroup by
RUB 969 mn following new supply agreements, increase of tariffs on
electricity sales as well as electricity sales volume growth on the
wholesale market;
? increase in capacity sales revenue by RUB 2,907 mn on the back of sales
volume growth of PJSC DEK;
? increase in heat and hot water sales revenue by RUB 115 mn following
tariff growth;
? decrease in other sales revenue by RUB 764 mn is mainly driven by
decrease in revenue from grid connections and electricity distribution
services in PJSC Yakutskenergo and PJSC Magadanenergo.
Operating expenses*******
Operating expenses in 3Q and 9M 2019/2018 (in RUB mn)
3Q'19 3Q'18* chg 9M'19 9M'18* chg
Employee benefit 18,308 18,025 1.6% 57,383 55,183 4.0%
expenses
Fuel expenses 11,871 10,642 11.5% 49,905 44,902 11.1%
Purchased 9,385 9,126 2.8% 33,957 29,136 16.5%
electricity and
capacity
Grid company 8,725 9,178 -4.9% 27,548 29,249 -5.8%
services on
electricity
distribution
Third parties 10,149 9,433 7.6% 25,043 25,155 -0.4%
services
Depreciation 6,434 5,824 10.5% 18,894 16,757 12.8%
Taxes other than on 2,942 3,054 -3.7% 8,687 9,131 -4.9%
income
Other materials 3,626 3,172 14.3% 7,788 7,180 8.5%
Water usage expenses 1,124 1,025 9.7% 3,165 3,021 4.8%
Other expenses 1,654 3,328 -50.3% 4,251 5,291 -19.7%
TOTAL 74,218 72,807 1.9% 236,621 225,005 5.2%
Total operating expenses in the 9M'19 amounted to RUB 236,621 mn as compared
225,005 mn in the 9M'18 due to the following factors:
? increase in purchased electricity and capacity by RUB 4,821 mn partially
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