Company Announcements

PJSC RusHydro: RusHydro announces 9M 2020 IFRS results

Source: EQS

PJSC RusHydro (HYDR)
PJSC RusHydro: RusHydro announces 9M 2020 IFRS results

26-Nov-2020 / 10:41 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 9M 2020 IFRS results

November 26, 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 3rd quarter and 9 months of 2020. Historic financial results following record electricity output, commissioning of new capacities, increase in electricity consumption in the Far East and effective management.

Key highlights for 9M of 2020:

  • RUB 311,233 mn - total revenue (+8.2% y-o-y);
  • RUB 90,548 mn - EBITDA (+28.6% y-o-y);
  • 29.1% - EBITDA margin (+4.6 p.p. as compared to 9M'19);
  • 1.1% decrease in manageable cash cost* growth;
  • RUB 60,741 mn - net profit (+72.0%);
  • 0.95x - net debt/EBITDA.

 

Key highlights for 3Q of 2020:

  • RUB 93,176 mn - total revenue (+6.5% y-o-y);
  • RUB 22,896 mn - EBITDA (+16.5% y-o-y);
  • 24.6% - EBITDA margin (+2.1 p.p. as compared to 3Q'19);
  • 3.7% decrease in manageable cash cost growth;
  • RUB 13,646 mn - net profit (+136.4%).

 

3Q and 9M 2020/2019 highlights (in RUB mn)

 

3Q/20

3Q/19

chg.

9M/20

9M/19

chg.

Revenue

93,176

87,486

6.5%

311,233

287,620

8.2%

Operating expenses

77,782

74,218

4.8%

242,395

236,621

2.4%

Other operating profit

50

144

-65.3%

911

614

48.4%

Operating profit**

15,444

13,412

15.2%

69,749

51,613

35.1%

EBITDA***

22,896

19,659

16.5%

90,548

70,428

28.6%

Net profit

13,646

5,772

136.4%

60,471

35,157

72.0%

 

Operating results

In the nine months of 2020, electricity generation by RusHydro Group amounted to 99,652 GWh (+14.0%), including Boguchanskaya hydropower plant**** - 112,748 GWh (+13.7%).

Main factors affecting operating results were:

  • water inflows to main reservoirs of the hydropower plants above the normal level; increase of electricity consumption in the Far Eastern Federal District by 2.1% and 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:

http://www.eng.rushydro.ru/investors/IR_news/112083.html

 

Key events since January 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.;
  • The 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;
  • RusHydro Group completed asset swap with SUEK Group's companies, which included the exchange of a 100% 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;
  • 10MW Verkhnebalkarskaya small-scale hydropower plant in Kabardino-Balkarian Republic with annual average electricity output of 60 GWh has been put into operation. It is the first renewables investment project in Russia under the capacity supply agreement (DPM);
  • Sovetskaya Gavan in Khabarovsk Krai with electric and heat capacity of 126 MW and 200 GCal/h, respectively and average annual electricity output of 630 GWh has been commissioned.

Revenue

Revenue breakdown in 3Q and 9M 2020/2019 (in RUB mn)

 

3Q/20

3Q/19

chg.

9M/20

9M/19

chg.

Electricity sales

64,918

60,260

7.7%

207,123

194,309

6.6%

Incl. Far East surcharge*****

7,232

6,087

18.8%

21,696

18,263

18.8%

Capacity sales

15,188

11,556

31.4%

43,168

34,997

23.3%

Heat and hot water sales

3,094

3,082

0.4%

27,829

27,113

2.6%

Other sales

6,933

8,583

-19.2%

20,343

20,128

1.1%

Other government grants

3,043

4,005

-24.0%

12,770

11,073

15.3%

Total revenue

93,176

87,486

6.5%

311,233

287,620

8.2%

 

In the nine months of 2020, total revenue of the Group increased by 8.2% to RUB 311,233 mn as compared to the nine months of 2019. The change is associated with the following key factors:

  • increase of RUB 8,171 mn on the back of sales volume growth under capacity supply agreements (DPM) following commissioning of Zaramagskaya HPP-1, Verkhnebalkarskaya small HPP and sales volume growth and price increase at PJSC DEK;
  • increase of RUB 7,908 mn following increase of electricity output on the back of higher water inflows to the majority of HPPs' reservoirs;
  • increase of RUB 2,562 mn on the back of tariff, electricity sales volume growth and subsidies at Far East energy companies segment*****;
  • increase of RUB 2,555 mn in Supply companies segment following mainly at PJSC DEK on the back of increase in output;
  • increase of RUB 716 mn from heat and hot water sales following tariff and production volume growth.

 

Operating expenses

 

Operating expenses in 3Q and 9M 2020/2019 (in RUB mn)

 

3Q/20

3Q/19

chg.

9M/20

9M/19

chg.

Employee benefit expenses

18,293

18,308

-0.1%

57,898

57,383

0.9%

Third parties expenses and other ******

19,065

20,528

-7.1%

55,211

56,842

-2.9%

Fuel expenses

11,269

11,871

-5.1%

48,372

49,905

-3.1%

Purchased electricity and capacity

13,615

9,385

45.1%

37,815

33,957

11.4%

Depreciation

7,316

6,434

13.7%

21,235

18,894

12.4%

Taxes other than on income

3,105

2,942

5.5%

9,672

8,687

11.3%

Other materials

3,856

3,626

6.3%

8,295

7,788

6.5%

Water usage expenses

1,263

1,124

12.4%

3,897

3,165

23.1%

TOTAL

77,782

74,218

4.8%

242,395

236,621

2.4%

 

Total operating expenses in the nine months of 2020 as compared to the same period last year increased by 2.4% to RUB 242,395 mn due to the following factors:

  • increase in purchased electricity and capacity by RUB 3,858 in Retail segment in PJSC DEK following increase of purchased electricity and in Far East energy companies segment following substitution of own electricity production with purchase of electricity from the commissioned floating nuclear power plant in Pevek in Chukotka;
  • increase in depreciation expense by RUB 2,341 mn and increase in taxes other than on income by RUB 985 mn following commissioning of new facilities as well as modernization at PJSC RusHydro's facilities;
  • increase of employee benefit expenses by RUB 515 mn following indexation of salaries in accordance with existing collective agreements;
  • decrease in fuel expenses mainly in JSC DGK by 1,533 mn following decrease of electricity output and disposal of Primorskaya GRES.

 

Profit

 

In the nine months of the year, the Group's net profit increased by 72.0% to RUB 60,471 mn.

In the same period EBITDA increased by 28.6% to a record level of RUB 90,548 mn.

Key indicators of financial position

As of September 30, 2020, the Group's assets increased by RUB 50,273 mn or 5.4% to RUB 975,392 mn against the comparable figure as at December 31, 2019 following increase in property, plant & equipment (implementation of the Group's investment program) and working capital.

As at the end of the reporting period, the Group's liabilities decreased by RUB 1,833 mn or 0.5% to RUB 353,411 mn as compared to December 31, 2019.

Events after the reporting date

  • The Board of Directors appointed Victor Khmarin as acting Chairman of the Management Board, General Director of the Company following Nikolay Shulginov's appointment as Minister of Energy of the Russian Federation;
  • RusHydro Group put into operation 5.6MW Ust-Dzhegutinskaya small-scale hydropower plant in Kabardino-Balkarian Republic with annual average electricity output of 25 GWh under the capacity supply agreement (DPM).

 

The full financial statements are available on the Company's website at: http://www.eng.rushydro.ru/investors/reports

 

* Includes employee benefit expenses, fuel expenses, third parties expenses, other materials and other costs.

** 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.

**** 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 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

****** includes grid company services

 

About RusHydro

RusHydro Group is the leading producer of renewable energy in Russia. It is one of 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 38.0 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: MSCM
TIDM: HYDR
LEI Code: 2534005TJN9DX4YWVT97
OAM Categories: 2.2. Inside information
Sequence No.: 88558
EQS News ID: 1150763

 
End of Announcement EQS News Service

fncls.ssp?fn=show_t_gif&application_id=1150763&application_name=news&site_id=acquiremedia3