OREANDA-NEWS. April 26, 2011. OJSC “Bashkirenergo” (MICEX, RTS: BEGY) – publishes consolidated financial statements for the year ended 31 December 2010 prepared in accordance with IFRS, reported the press-centre of Sistema.

Key Financial Results:
The Company revenue up 25% to 62,835 mln RUR (2.1 bln USD) in 2010 compared to 2009 due to increase in volume of electricity and heat sales, as well as average sale prices.

Operating expenses up 24% to 58,719 mln RUR. (1.9 bln USD) in 2010 vs 2009 driven by increasing fuel costs and purchased electricity prices.

Operating profit increased 35% in 2010 compared to 2009 reaching 4,116 mln RUR (136 mln USD).

OIBDA of 2010 was 7,613 mln RUR (251 mln USD) or 19% higher than in 2009.

OIBDA margin was 12% in 2010, or 1 b.p. lower than in 2009.

Net profit jumped 31% to 2009 results reaching 2,791 mln RUR. (92 mln USD).

Loans and borrowings in 2010 decreased by 89% to 160 mln. RUR (5 mln USD).
 
Key Operating results:
 
OJSC “Bashkirenergo” total power generation in 2010 was 22,612 mln kWh gaining 14% from 2009 power production.

The capacity factor of OJSC “Bashkirenergo” power stations reached 61% (an increase of 11 b.p. compared to 2009) returning to the pre-crisis levels.

Heat output of the Company in 2010 was 24,128 thousand Gcal or 1% above the 2009 results.

The specific consumption of equivalent fuel for electricity generation in 2010 reduced by 3,1 g/kWh to 323.2 g/kWh.

Volumes of electricity transmission in 2010 grew 7% to 38 623 kWh to 2009.

The transmitted electricity losses both in long-range and local grid fell 10% as to 2009 to 4,9% or 1,973 kWh. 

Power supply to consumers in 2010 was 2.6% higher than in 2009 and amounted to 19,083 mln kWh.

Alexey Doronin, the CEO of OJSC “Bashkirenergo”, commenting on the 2010 results, said: “We consider the 2010 financial results as very positive. With the rising natural gas prices outpacing electricity prices growth the Company managed to increase its net profit and OIBDA compared to 2009 mostly through permanent cost control. The capacity factor, an important efficiency indicator, grew to 61% in 2010 returning to the pre-crisis levels. This important fact demonstrates that both the utilities sector and the Russian economy as a whole are on the way to full recovery. Moreover we think that the full engagement of OJSC “Bashkirenergo” at the wholesale electricity and capacity market in 2011 will contribute to the Company’s financial success in future”.
 
2010 RESULTS OVERVIEW
One of the major challenges for the management in 2010 was setting up the procedures to “unbundle” the Company’s business model. Mostly this means that generating capacities and the power supply company LLC ESKB needed to gain separate access to the wholesale electricity and capacity market (OREM). As the result, OJSC “Bashkirenergo” has transferred its status of guaranteeing supplier to LLC ESKB, with all of the power stations with capacity over 25 MW gaining access to OREM. Moreover practically all of generating equipment (except 65 MW) passed the competitive capacity selection procedure for 2011.

In order to comply with the Russian legislation prohibiting from 2011 for the Company to combine within one price zone electricity transmission with electricity generation and supply, the Company’s management prepared for the spin-off from OJSC “Bashkirenergo” of the newly created power grid company OJSC “Bashkirian power grid” (OJSC “BPG”) composed of long-range and local power lines. In order to maximize the protection of rights of all shareholders of the reorganized OJSC “Bashkirenergo” the spin-off was planned to be made with a mirror-like distribution of shares in the charter capital of the newly created entity. However at the Extraordinary General Shareholders Meeting held on December 24, 2010 the decision to make the spin-off was not supported by the shareholders, controlling the blocking stake of voting shares. As a result the decision has not been approved and today OJSC “Bashkirenergo” in legal terms continues to function as a vertically-integrated Company. At the same time operationally it started in 2011 having an unpacked business.

Full set of the Company’s IFRS consolidated financial statements can be found at the Company’s web-site at: http://www.bashkirenergo.ru/investor/financial%20reports/