OREANDA-NEWS. October 6, 2011. RusHydro Group (ticker symbol: RTS, MICEX, LSE: HYDR; OTCQX: RSHYY) announces its consolidated IFRS unaudited interim financial results for the six months ended June 30, 2011.

RusHydro Group's financial results include results of a number of retail companies[1], which were accounted for until the disposal date - March 28, 2011, when these companies have been transferred to JSC Inter RAO UES as contribution to the share capital. In addition, RusHydro Group has contributed available-for-sale financial assets (investments in a number of utilities companies, including 15.48% in JSC WGC-1) to the share capital of Inter RAO UES.

In the 2010 financial statements contributed assets were classified as disposal group and assets held for sale.

Financial Highlights for the 6 months ended 30 June 2011 (in RUR mln)

 

 

6M 2011

 

 

6M 2010

 

Change, %

Revenue

164,343

204,978

-20%

Revenue, excl. disposal group

68,558

62,039

11%

Operating expenses

(130,491)

(175,727)

-26%

Operating expenses, excl. disposal group

(43,322)

(40,562)

7%

EBITDA[2]

41,436

35,149

18%

Net income

27,053

21,462

26%

RusHydro Group's revenue for the six months ended 30 June 2011 decreased by 20% and totaled RUR 164,343 mln compared to RUR 204,978 mln for the same period last year.

The largest share of RusHydro Group's revenue is represented by revenue from sales of electricity and capacity, as shown below (in RUR mln):

 

 

6M 2011

 

 

6M 2010

 

Change, %

Revenue

164,343

204,978

-20%

  Sales of electricity

141,927

179,425

-21%

  Sales of capacity

18,447

22,728

-19%

  Other revenue

3,969

2,825

40%

Incl. revenue of disposal group

95,785

142,939

-33%

The operating expenses for the six months ended June 30, 2011 totaled RUR 130,491 mln - a 26% decrease in comparison with RUR 175,727 mln for the same period last year. The operating expenses include expenses of the disposal group in the amount of RUR 87,169 mln for the period from January 1, 2011 to the disposal date and RUR 135,165 mln for the first half of 2010.

EBITDA for the first half of 2011 increased by 18% to RUR 41,436 mln against RUR 35,149 mln for the same period of the previous year. EBITDA margin for the reported period increased 8 p.p. to 25%.

EBITDA growth was driven by increase in volumes sold at free (non-regulated) prices following the wholesale electricity market liberalization as well as by the growth of free (non-regulated) electricity prices.

Net income of RusHydro Group for the six months ended June 30, 2011 increased by 26% and totaled RUR 27,053 mln.

Key indicators of RusHydro Group financial position as of 30 June 2011

As of June 30, 2011, RusHydro Group's assets decreased by RUR 3,510 mln to RUR 647,494 mln - a 0.5% decrease compared to December 31, 2010. RusHydro's Group liabilities as for the end of reporting period decreased by RUR 16,909 mln or by 13% as of December 31, 2010 and stood at RUR 115,983 mln.

Therefore, net assets of RusHydro Group in the first half of 2011 increased by RUR 13,399 mln or 3% compared to December 31, 2010. This change was primarily driven by total comprehensive income of RUR 19,472 mln and dividend payout for a total amount of RUR 2,497 mln.    

The gain on the exchange of financial assets held for sale and disposal group for an additional stake in JSC Inter RAO UES totaled RUR 750 mln.

Subsequent events

Share issue

On August 2, 2011, the Board of Directors of RusHydro Group determined the placement price of RUR 1.65 per share for additional 89 bln share issue. On August 16, 2011, the share issue for 89 bln ordinary shares was registered with the Federal Service for Financial Markets.

The non-cash consideration to be contributed in the course of additional share issue includes the following assets:

-        controlling interests in the following companies: JSC RAO Energy System of East, JSC Far-Eastern Energy Company, JSC Yakutskenergo, JSC Kamchatskiy Gazoenergetichecky Complex, JSC Pavlodolskaya HPP;

-        interests in RusHydro Group's subsidiaries and jointly-controlled entities: JSC Geotherm, JSC Kolimaenergo, JSC Zaramag HS, JSC Ust'-Srednekanskaya HPP, JSC Boguchanskaya HPP;

-        non-controlling interests in the following companies: JSC Irkutskenergo, JSC Trest Gidromontazh, JSC Sakhalin Energy Company;

-        hydropower facilities: dams of Bratskaya, Ust'-Ilimskaya and Irkutskaya HPPs.

In the course of this share issue on September 23, 2011 RusHydro Group has received 24.71% stake in JSC Yakutskenergo.

Guarantees

In August 2011, RusHydro Group has issued guarantee for JSC Boguchanskaya HPP in favour of the State Corporation Vnesheconombank for the total amount of loan facility of RUR 28,100 mln including accrued interest and penalties under the loan agreement. RUSAL Group, RusHydro's partner in implementation of BEMA project, has obligation to compensate RusHydro Group for the 50% of JSC Boguchanskaya HPP obligations fulfilled by RusHydro Group under the guarantee.

Acquisition

On September 12, 2011, RusHydro Group's subsidiary JSC ESC RusHydro acquired a 100% interest in LLC ESC Bashkortostan (Energy Supply Company of Bashkortostan) from JSC Bashkirenergo. The consideration was determined by an independent appraiser and amounted to RUR 5,720 mln.

[1] The following companies were acquired in 2010 from JSC RAO Energy System of East Group and JSC Lenenergo and were accounted for all reported periods using predecessor method: JSC Mosenergosbyt, JSC Saint-Petersburg Sale Company, JSC Altayenergosbyt, JSC Tambov Energy Retailing Company, JSC Saratovenergo and JSC United Energy Retailing Company.

[2]  EBITDA is calculated as operating profit before depreciation of PP&E and non-cash impairment and disposal charges