PJSC RusHydro (HYDR)
PJSC RusHydro: RusHydro announces 1Q 2020 IFRS results
04-Jun-2020 / 13:54 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 is solely responsible for the content of this announcement.
RusHydro announces 1Q 2020 IFRS results
June 4, 2020. 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
1st quarter of 2020.
Key highlights for the first quarter of 2020:
- Consolidated financial results reflected increase of electricity output
on the back of increased water inflows to the majority of reservoirs of
the HPPs;
- RUB 117,684 mn - total revenue (+7.5% y-o-y);
- RUB 36,613 mn - EBITDA (+23.8% y-o-y);
- 31.1% - EBITDA margin (+4.1 p.p. as compared to 1Q'19);
- 1.8% - increase of manageable cash costs;
- RUB 25,908 mn - net profit (+56.9%);
- RUB 23,431 mn - adjusted net profit (+22.4%);
- 1.2x - net debt/EBITDA (1.2x in 1Q'19, 1.5x - in 4Q'19).
1Q 2020/2019 highlights (in RUB mn)
1Q/20 1Q/19 chg.
Revenue 117,684 109,460 7.5%
Operating expenses 88,302 86,354 2.3%
Other operating profit 303 278 9.0%
Operating profit* 29,685 23,384 26.9%
EBITDA** 36,613 29,564 23.8%
Net profit 25,908 16,512 56.9%
Net profit (adj.)*** 23,431 19,146 22.4%
Nikolay Shulginov, Chairman of the Management Board - General Director of
RusHydro commented: "RusHydro Group demonstrated solid operational and
financial results in the first quarter of 2020 as a result of systematic
efforts aimed at improvement of operational and financial performance,
optimization of manageable operational expenses and growth of the company's
core value."
Operating results
In the first quarter of 2020, electricity generation by RusHydro Group
amounted to 34,371 GWh, an increase of 18.6% as compared to the first
quarter of 2019. The Group's total power production including Boguchanskaya
hydropower plant**** was 39,008 GWh (+19.2%). Total electricity generation
by hydropower and pumped storage plants of RusHydro Group in 1Q 2020
increased by 29.6% to 24,823 GWh, total output thermal power plants in the
Far East decreased by 3.0% to 9,431 GWh, while output of geothermal power
plants in 1Q 2020 increased by 9.4% to 117 GWh.
Main factors affecting operating results in in January-March 2020 were:
? water inflows to the reservoirs of the Volga-Kama cascade well above
(1.5-6.4x) the normal level;
? total water inflow to the reservoirs in Siberia and the Far East 30-85%
above the long-run average;
? water inflows to the reservoir of Chirkeyskaya HPP at the normal level;
? increase of electricity consumption in the Far Eastern Federal District
by 4.4% (excluding leap year and air temperature factors).
Heat output by RusHydro's Group's thermal plants in the Far Eastern Federal
District in the first quarter of 2020 increased by 0.6% to 12,246 GCal as
compared to the corresponding period of 2019 due to lower air temperatures
in the regions of presence of JSC DGK, PJSC Yakutskenergo and JSC
Chukotenergo.
In the first quarter of 2020, total electricity output by RusHydro's retail
companies, JSC ESC RusHydro, PJSC Krasnoyarskenergosbyt, JSC Chuvash retail
company and PJSC Ryazan retail company decreased by 4% as compared to the
same period in 2019 and amounted to 5,371 GWh.
Key events of for the period January-March 2020
? In the first quarter of 2020, electricity production and capacity supply
began at Zaramagskaya HPP-1 in North Ossetia. The facility is built under
capacity supply agreement (DPM);
? On March 11, 2020, RusHydro Group has finalized divestment of its assets
in Armenia to PJSC Hrazdan Power Company (HrazTES, Tashir Group). The
company's financial debt decreased by RUB 4 bn following completion of the
transaction.
Revenue
Revenue breakdown in 1Q 2020/2019 (in RUB mn)
1Q/20 1Q/19 chg.
Electricity sales 76,008 70,780 7.4%
Incl. grants as per Resolution of the 7,555 6,071 24.4%
Russian Gov't No. 895 *****
Heat and hot water sales 17,010 16,687 1.9%
Capacity sales 14,081 12,063 16.7%
Other sales 6,670 5,778 15.4%
Other government grants 3,915 4,152 -5.7%
Total revenue 117,684 109,460 7.5%
In the first quarter of 2020, total revenue of the Group increased by 7.5%
to RUB 117,684 mn as compared to RUB 109,460 in the first quarter of 2019.
The change is associated with the following key factors:
? increase of revenue from electricity sales of PJSC RusHydro by RUB 3,689
mn following increase of electricity output by 30.9% on the back of
earlier spring flooding on the Volga-Kama cascade;
? increase in capacity sales revenue by RUB 2,018 mn on the back of sales
volume growth under capacity supply agreement (DPM) following
commissioning of Zaramagskaya HPP-1 and sales volume growth of 3.1% at
PJSC DEK;
? increase in revenue from electricity sales (including government
grants*****) of RAO ES East subgroup by RUB 1,701 mn on the back of tariff
and sales volume growth;
? increase in heat and hot water sales revenue by RUB 323 mn following
tariff and production volume growth;
? increase in other sales revenue by RUB 892 mn is mainly driven by
increase of revenue from electricity distribution services at PJSC
Yakutskenergo and PJSC Magadanenergo and increase of revenue from grid
connections at PJSC Yakutskenergo and JSC DRSK.
Operating expenses******
Operating expenses in 1Q 2020/2019 (in RUB mn)
1Q/20 1Q/19 chg.
Fuel expenses 22,709 23,684 -4.1%
Employee benefit expenses 19,618 19,189 2.2%
Third parties expenses and other ******* 19,241 17,923 7.3%
Purchased electricity and capacity 13,407 13,860 -3.3%
Depreciation 7,027 6,384 10.1%
Taxes other than on income 3,280 2,765 18.6%
Other materials 1,779 1,557 14.3%
Water usage expenses 1.241 992 25.1%
TOTAL 88,302 86,354 2.3%
Total operating expenses in the first quarter of 2020 compared to the same
period last year increased by 2.3% to RUB 88,302 mn due to the following
factors:
? increase in depreciation expense by RUB 643 mn following commissioning
of Sakhalinskaya GRES-2, commissioning of Zaramagskaya HPP-1,
commissioning of Nizhne-Bureyskaya HPP and modernization at PJSC
RusHydro's facilities;
? increase in third parties services and other expenses by RUB 1,318 mn
mostly as a result of third parties services expense growth of RUB 522 mn
following technical support and implementation of new software as well as
increase of coal production for own need by third parties;
? increase in taxes other than on income by RUB 515 mn as a result of
property tax increase following commissioning of Sakhalinskaya GRES-2,
Nizhne-Bureyskaya HPP and Zaramagskaya HPP-1;
? increase of water usage expenses by RUB 249 mn following HPP production
growth;
? decrease in fuel expenses mainly in JSC DGK by 975 mn following decrease
of electricity output and decrease of reference fuel consumption and
price.
Profit
The Group's net profit increased by 56.9% to RUB 25,908 mn. Adjusted net
profit in the reporting period amounted to RUB 23,431 - an increase of 22.4%
as compared to the same period last year.
The difference between the reported and adjusted profit is attributed mainly
to the recognition of change in fair value of the derivative financial
instrument as a result of change in fair value of non-deliverable forward
contract following increase of market price of PJSC RusHydro's shares in the
reporting period as well as recognition of impairment of financial assets
resulting from measuring expected credit losses of accounts recievables
In the first quarter of 2020, EBITDA increased by 23.8% to RUB 36,613 mn
compared to the same period of 2019.
Key indicators of financial position
As of March 31, 2020, the Group's assets increased by RUB 27,036 mn or 2.9%
to RUB 952,155 mn against the comparable figure as at December 31, 2019
following increase in accounts receivable and increase in property, plant &
equipment (following execution of the Group's investment program).
As at the end of the reporting period, the Group's liabilities increased
insignificantly - by RUB 743 mn or 0.2% to RUB 355,987 mn as compared to
December 31, 2019.
Events after the reporting date
? On May 28, 2020, PJSC RusHydro announced open subscription of additional
share issue (state registration number 1-01-55038-E-043D dated August 27,
2018) for construction of two 110 kV Pevek-Bilibino high-voltage overhead
power lines.
The full financial statements are available on the Company's website at:
http://www.eng.rushydro.ru/investors/reports [1]
* Operating profit is calculated as the difference between revenue, other
operating profit and operating expenses.
** EBITDA is calculated as operating profit/loss excluding depreciation of
property, plant and equipment, amortization of intangible assets, impairment
of property, plant and equipment, impairment of financial assets, profit /
loss on disposal of property, plant and equipment and other non-cash items
of operating income and expenses.
*** Net profit is adjusted for the effects of recognition of financial
income/expense arising from the change in fair value of non-deliverable
forward contract, impairment of fixed assets, impairment of financial
assets, profit / loss on disposal of property, plant and equipment, as well
as other operating non-cash income.
****The Boguchanskaya hydropower plant is part of the Boguchanskiy Energy
and Metals Complex (BEMO), a joint venture (JV) between RusHydro and UC
RUSAL, and is not part of RusHydro Group. According to RusHydro's
shareholding in the JV (50%), the results of the plant are reported in the
official financial statements in "Share of results of associates and jointly
controlled entities". Operations of the HPP have been put into the
press-release for general reference.
*****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 of
RUB 4.00 / kWh, from 1 January 2018 to RUB 4.30 / kWh, from 1 January 2019
to RUB 4.69 / kWh, from 1 January 2020 to TUB 5 / 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.
******Here and hereinafter the operating expenses do not include impairment
loss.
*******includes grid company services
About RusHydro
RusHydro Group is the leading producer of renewable energy in Russia. It is
Russia's largest generating company and is the fourth in the world with over
400 generating facilities. The Group's total electricity generation capacity
including Boguchanskaya HPP is 39.5 GW.
For more information:
Investor Relations Department
Tel. +7 (495) 122 0555 ext. 1304
ir@rushydro.ru
The information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of RusHydro. One can identify forward-looking statements by
terms such as "expect," "believe," "anticipate," "plan", "aim", "target",
"forecast", "project", "should", "estimate," "intend," "will," "could,"
"may" or "might," the negative of such terms or other similar expressions.
We wish to caution you that these statements are only predictions and that
actual events or results may differ materially from these statements.
We do not intend to update these statements to reflect events and
circumstances occurring after the date hereof or to reflect the occurrence
of unanticipated events. Many factors could cause the actual results to
differ materially from those contained in our projections or forward-looking
statements, including, among others, general economic and political
conditions, our competitive environment, risks associated with operating in
Russia and rapid technological and market changes in our industries, as well
as many other risks specifically related to RusHydro and its operations.
ISIN: US7821834048, RU000A0JPKH7
Category Code: MSCH
TIDM: HYDR
LEI Code: 2534005TJN9DX4YWVT97
OAM Categories: 2.2. Inside information
Sequence No.: 68106
EQS News ID: 1063335
End of Announcement EQS News Service
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June 04, 2020 07:54 ET (11:54 GMT)
