Company Announcements

ROSSETI Discloses IFRS Financial Results for 9M 2019

November 29, 2019. Moscow, Russia - PJSC ROSSETI (LSE:RSTI) ("Company"), Russia's largest electric grid company, discloses IFRS financial results of Rosseti Group for the nine months, ended September 30, 2019. Core business of the Company is electricity transmission and distribution, and network connection.

Management comment

Company ROSSETI CEO Pavel Livinsky noted "ROSSETI demonstrate positive dynamics of financials as well the current as two previous years. We also take a favorable view of the Company results for the 9 months of 2019. Operational performance enhancement, costs decrease on the account of digital technologies implementation are our ongoing priorities. All this makes ROSSETI one of the world leading electric grids. Our long-term development strategy is aimed at the most welcoming environment for our shareholders and investors."

Financial results:

·     Revenue: 734.2 billion rubles (+2.0% vs. 9 м 2018)

·     EBITDA: 244.6 billion rubles (+9.9% vs. 9 м 2018)

·     Net profit: 97.1 billion rubles (+6.8% vs. 9 м 2018)

·     Net cash flows from operating activities: 178.2 billion rubles (+14.0% vs. 9 м 2018)

Corporate highlights in the reporting period:

·     On July 4, 2019 the Company signed a cooperation agreement with Moscow Government in order to develop charging infrastructure for electrobuses, passenger and two-wheel electric vehicles in Moscow Region.

·     On July 22, 2019 Standard&Poor's (S&P) rating agency upgraded credit ratings of two PJSC ROSSETI subsidiaries: "Rosseti Moscow Region" and "Rosseti Center" to investment level "BB+" (stable outlook).

·     On September 4, 2019 220 kW substation "Prompark" commissioned in Vladivostok suburban area (126 MVA). Also, on September 23, 2019 a new digital 110 kW substation "Plievo Novaya" started in North Caucasus. It was built with 100% national equipment use.

Events after the reporting date:

·     On October 16, 2019, new substation 220/110/20/10 "Khovanskaya" (installed transformer capacity of 700 MVA) started. It is the major electric supply center of Troitsk and Novomoskovsk districts of Moscow.

·     On October 30, 2019 a bond placement of "Rosseti Ural" took place: amount - 7 billion rubles, coupon rate - 7% per year. On November 19, 2019 "Rosseti Center" bonds placed: amount - 5 billion rubles, coupon rate - 6.85% per year.

Financial results

Group's financial and economic indicators for the 9 months of 2019 has shown positive momentum.

Net profit for the 9 months of 2019 totaled 97.1 billion rubles, which is an increase of 6.8% year-on-year.

EBITDA increased by 22.1 billion rubles in the reporting period, which is 9.9% higher year-on-year.

Revenue for the 9 months of 2019 increased by 2% year-on-year, up to 734.2 billion rubles.

Growth in the main revenue element - electricity transportation by 19.8 billion rubles resulted from tariff indexation.

Operating expenses of 609.1 billion rubles grew by 15.8 billion rubles or 2.7%, mostly resulting from non-controllable expenses dynamics: increased electricity purchase to compensate losses, services of territorial network organizations, amortization.

Net debt/ EBITDA decreased by 0.2x year-to-date and amounted to 1.2x as of September 30, 2019 (1,4х as of December 31, 2018).

Long-term liabilities still dominate the debt portfolio structure (81%).

Assets

By the end of 9 months of 2019, Group assets grew by 4.6%, up to 2,634,951 million rubles (2,518,632 million rubles as of December 31, 2018), mainly on the back of growing PP&E, resulting from the investment program implementation, as well as right-of-use assets recognition (accounting for IFRS 16 (Rent) applied since January 1, 2019).

PJSC ROSSETI and subsidiaries consolidated abbreviated interim IFRS financial statements for the three and nine months ended September 30, 2019, can be found on the Company's website at:

http://www.rosseti.ru/investors/info/financeinfo/reports/msfo/ 

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For further information, please, contact IR-Department:                 

Public Joint Stock Company ROSSETI (PJSC ROSSETI) is one of the largest electric grid companies in the world. The Company manages 2.35 million kilometers of power lines and 507 thous. substations with more than 792 GVA of transformer capacity. PJSC ROSSETI subsidiaries' and dependent companies' grids transfer 75% of electricity, produced in Russia.

PJSC ROSSETI comprises 33 subsidiaries and dependent companies, including 15 interregional grid companies and one transmission grid company. The controlling shareholder with an 88.04% stake in the Company is the government, represented by the Federal Agency for State Property Management of the Russian Federation.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of PJSC ROSSETI. You can identify forward-looking statements by terms such as "expect," "believe," "anticipate," "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. 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 conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industry, as well as many other risks specifically related to PJSC ROSSETI and its operations.