August 27, 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 2nd
quarter and 1st half of 2020.
Key highlights for 1H of 2020:
RUB 218,057 mn total
revenue (+9.0% y-o-y);
RUB 67,652 mn EBITDA
(+33.3% y-o-y);
31.0% - EBITDA margin (+5.7
p.p. as compared to 1H19);
flat manageable cash cost
growth;
RUB 46,825 mn net profit
(+59.4%);
1x net debt/EBITDA.
Key highlights for 2Q of 2020:
RUB 100,373 mn total
revenue (+10.7% y-o-y);
RUB 31,039 mn EBITDA
(+46.4% y-o-y);
30.9% - EBITDA margin (+7.5
p.p. as compared to 2Q'19);
2.0% decrease in manageable
cash cost growth;
RUB 20,917 mn net profit
(+62.5%).
2Q and 1H 2020/2019 highlights (in RUB mn)
|
2Q/20
|
2Q/19
|
chg.
|
1H/20
|
1H/19
|
chg.
|
Revenue
|
100,373
|
90,674
|
10.7%
|
218,057
|
200,134
|
9.0%
|
Operating expenses
|
76,311
|
76,049
|
0.3%
|
164,613
|
162,403
|
1.4%
|
Other operating profit
|
558
|
192
|
190.6%
|
861
|
470
|
83.2%
|
Operating profit1
|
24,620
|
14,817
|
66.2%
|
54,305
|
38,201
|
42.2%
|
EBITDA2
|
31,039
|
21,206
|
46.4%
|
67,652
|
50,770
|
33.3%
|
Net profit
|
20,917
|
12,873
|
62.5%
|
46,825
|
29,385
|
59.4%
|
Nikolay
Shulginov, Chairman of the Management Board General Director of
RusHydro commented:
"Thanks to systematic initiatives aimed at increasing the
company's value growth, capitalization increased by 33% in the first
half of the year. Operational efficiency growth, sustainability of
our business model and commissioning of new capacities are the
backbones behind our performance.
Strong operational results in the first half of
2020 would not have been possible without effective hydropower
resource management and seamless maintenance.
Solid financial results enable RusHydro to
continuously improve reliability of electricity supply to consumers
and carry out operational and investment program to successfully
implement the government's modernization program of thermal power
plants under capacity supply agreements".
Operating
results
In the first half of 2020, electricity generation
by RusHydro Group amounted to 68,900 GWh (+21.8%), including
Boguchanskaya hydropower plant3
77,742 GWh (+23.6%).
Main factors affecting operating results in
January-June 2020 were:
water inflows to the reservoirs of the
Volga-Kama cascade, Siberia and the Far East above the normal level;
increase of electricity consumption in the
Far Eastern Federal District by 4.9%;
increase of heat output in the Far Eastern
Federal District driven by weather conditions.
Detailed review of operational results is
available at the Company's official website at:
https://www.rushydro.ru/investors/ir_news/111592.html
Key
events during the period January-June 2020
In the first quarter of 2020, electricity
production and capacity supply began at Zaramagskaya HPP-1 in North
Ossetia. The plant was built under capacity supply agreement (DPM).
Annual revenue contribution of RUB 10 bn.;
On March 11, 2020, RusHydro Group has
finalized divestment of its assets in Armenia. The company's
financial debt no-longer has any foreign currency risk. RusHydro's
leverage decreased by RUB 4 bn following completion of the
transaction;
On June 5, 2020, RusHydro Group completed the
first stage of asset swap with SUEK Group's companies, which
included the exchange of a 100 percent interest of JSC LUR and
a 100% interest in the share capital of LLC Primorskaya GRES for a
41.98% interest in the Group's subsidiary PJSC DEK. Following the
transaction the share of coal-fired generation decreased - a
positive effect of the Group's ESG profile;
On June 25, 2020, RusHydro Group put into
operation 10MW Verkhnebalkarskaya small-scale hydropower plant in
Kabardino-Balkarian Republic with annual average electricity output
of 60 GWh. It is the first renewables investment project in Russia
under the capacity supply agreement (DPM).
Revenue
Revenue breakdown in 2Q and 1H2020/2019 (in
RUB mn)
|
2Q/20
|
2Q/19
|
chg.
|
1H/20
|
1H/19
|
chg.
|
Electricity sales
|
66,520
|
63,269
|
5.1%
|
142,205
|
134,049
|
6.1%
|
Incl. grants as per Resolution of the Russian Gov't No. 895 4
|
7,232
|
6,105
|
18.5%
|
14,464
|
12,176
|
18.8%
|
Capacity sales
|
13,899
|
11,378
|
22.2%
|
27,980
|
23,441
|
19.4%
|
Heat and hot water sales
|
7,725
|
7,344
|
5.2%
|
24,735
|
24,031
|
2.9%
|
Other sales
|
6,740
|
5,767
|
16.9%
|
13,410
|
11,545
|
16.2%
|
Other government grants
|
5,489
|
2,916
|
88.2%
|
9,727
|
7,068
|
37.6%
|
Total revenue
|
100,373
|
90,674
|
10.7%
|
218,057
|
200,134
|
9.0%
|
In the first half of 2020, total revenue of the
Group increased by 9.0% to RUB 218,057 mn as compared to RUB 200,134
in the first half of 2019. The change is associated with the
following key factors:
increase of revenue from electricity sales of
PJSC RusHydro by RUB 6,599 mn following increase of electricity
output by 33.0% on the back of higher water inflows to the majority
of HPPs' reservoirs;
increase in capacity sales revenue by RUB
4,539 mn on the back of sales volume growth under capacity supply
agreements (DPM) following commissioning of Zaramagskaya HPP-1 and
sales volume growth and price increase of 4.6% and 6%, respectively,
at PJSC DEK;
increase in revenue from electricity sales
(including government grants4) of RAO ES East subgroup by RUB 1,199
mn on the back of tariff and sales volume growth;
increase in heat and hot water sales revenue
by RUB 704 mn following tariff and production volume growth;
increase in other sales revenue by RUB 1,865
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 2Q and 1H2020/2019 (in
RUB mn)
|
2Q/20
|
2Q/19
|
chg.
|
1H/20
|
1H/19
|
chg.
|
Employee benefit expenses
|
19,987
|
19,886
|
0.5%
|
39,605
|
39,075
|
1.4%
|
Fuel expenses
|
14,394
|
14,350
|
0.3%
|
37,103
|
38,034
|
-2.4%
|
Third parties expenses and other 5
|
16,905
|
18,391
|
-8.1%
|
36,146
|
36,314
|
-0.5%
|
Purchased electricity and capacity
|
10,793
|
10,712
|
0.8%
|
24,200
|
24,572
|
-1.5%
|
Depreciation
|
6,892
|
6,076
|
13.4%
|
13,919
|
12,460
|
11.7%
|
Taxes other than on income
|
3,287
|
2,980
|
10.3%
|
6,567
|
5,745
|
14.3%
|
Other materials
|
2,660
|
2,605
|
2.1%
|
4,439
|
4,162
|
6.7%
|
Water usage expenses
|
1,393
|
1,049
|
32.8%
|
2,634
|
2,041
|
29.1%
|
TOTAL
|
76,311
|
76,049
|
0.3%
|
164,613
|
162,403
|
1.4%
|
Total operating expenses in the first half of 2020
compared to the same period last year increased insignificantly
(+1.4%) to RUB 164,613 mn due to the following factors:
increase in depreciation expense by RUB 1,459
mn following commissioning of Sakhalinskaya GRES-2, Zaramagskaya
HPP-1, Nizhne-Bureyskaya HPP, property and modernization at PJSC
RusHydro's facilities;
increase in taxes other than on income by RUB
822 mn as a result of property tax increase following commissioning
of Nizhne-Bureyskaya HPP, Zaramagskaya HPP-1 and modernization of
PJSC RusHydro's facilities;
increase of employee benefit expenses by RUB
530 mn following indexation of salaries in accordance with existing
collective agreements;
decrease in fuel expenses mainly in JSC DGK
by 931 mn following decrease of electricity output.
Profit
The Group's net profit increased by 59.4% to RUB
46,825 mn.
In the first half of 2020, EBITDA increased by
33.3% to a record RUB 67,652 mn compared to the same period of 2019.
At the same time, the Far East segment's EBITDA increased by 39% and
reached RUB 15.7 bn.
Key indicators of financial position
As of June 30, 2020, the Group's assets increased
by RUB 27,919 mn or 3.0% to RUB 953,038 mn against the comparable
figure as at December 31, 2019 following increase in property, plant
& equipment and working capital .
As at the end of the reporting period, the Group's
liabilities decreased by RUB 13,630 mn or 3.8% to RUB 341,614 mn as
compared to December 31, 2019 following decrease of non-current debt
and accounts payable.
Events after the reporting date
On August 11, 2020, PJSC RusHydro brought
online the first floating solar power plant in Russia in the
reservoir of Nizhne-Bureyskaya HPP. With 54kW of installed capacity,
it will function as its auxiliary.
The full financial statements are available on the
Company's website at:
https://www.eng.rushydro.ru/investors/reports
1 Operating
profit is calculated as the difference between revenue, other
operating profit and operating expenses.
2 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.
3
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
4
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
RUB 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
5
includes grid company services
|