RusHydro Announces 9 Months 2012 RAS Results
OREANDA-NEWS. November 7, 2012. JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces its non-consolidated financial results under Russian accounting standards (RAS) for the nine months ended September 30, 2012.
Key financials for the 9 months and the 3rd quarter of 2012 under RAS (in RUR mn)[1]
9M 2012 |
9M 2011 |
chg |
3Q 2012 |
3Q 2011 |
chg | |
Revenue |
68,276 |
69,460 |
-2% |
24,127 |
22,455 |
7,4% |
Operating costs |
(41,061) |
(31,021) |
32% |
(15,364) |
(11,987) |
28,2% |
Operating profit |
27,215 |
38,441 |
-29% |
8,763 |
10,468 |
-16,3% |
Other revenue |
3,282 |
19,810 |
-83% |
1,569 |
780 |
101,1% |
Other expenses |
(5,871) |
(27,074) |
-78% |
(1,654) |
(3,607) |
-54,1% |
EBITDA[2] |
35,214 |
45,044 |
-22% |
11,490 |
12,709 |
-9,6% |
Net profit |
19,963 |
24,451 |
-18% |
6,712 |
5,920 |
13,4% |
Net profit (adj.) [3] |
17,442 |
19,467 |
-10% |
7,079 |
4,882 |
45,0% |
Comparable key financials under RAS (in RUR mn) ЁC excluding 2011 investment component in tariffs[4]
9M 2012 |
9M 2011 |
chg |
3Q 2012 |
3Q 2011 |
chg | |
Revenue |
68,276 |
59,737 |
14,3% |
24,127 |
20,135 |
19,8% |
EBITDA |
35,214 |
35,321 |
-0,3% |
11,490 |
10,389 |
10,6% |
Net profit (adj.) |
19,963 |
9,744 |
79% |
7,079 |
2,562 |
176,3% |
In the nine months of 2012, revenue decreased by 2% to RUR 68,276 mn as compared to RUR 69,460 mn in the nine months of 2011. The underlying factors behind the change in revenue were:
decrease in revenue from capacity sales as of 2012 after liquidation of special investment component in the capacity prices of RusHydro's hydropower plants, as well as implementation of tariff regulation for hydro capacity in Siberian price zone instead of competitive capacity prices;
pricing environment on the day-ahead market, affected by the following factors: a) decrease in electricity prices in the first half of the year in the first pricing zone caused by an increase in price-taking supply due to a change in accounting for minimal generated capacity in compliance with rules of the wholesale market for electricity and capacity, and the absence of suppliers with high price bids among price-determining suppliers in the first months of 2012; b) increase in electricity prices as of the 3rd quarter of 2012 following indexation of gas prices;
lower electricity sales in non-price zone of the wholesale market due to decrease in supply in the first half of 2012;
slight decrease in power generation against the backdrop of normal water inflows to reservoirs in European Russia and abnormally low inflows to major reservoirs in Siberia.
As illustrated in the table below (RUR mn), the dominant share of revenues comes from electricity and capacity sales:
9M 2012 |
9M 2011 |
chg | |
Electricity sales, incl. |
47,812 |
40,776 |
17% |
Sales of electricity under unregulated bilateral contracts |
7,185 |
1,081 |
565% |
Capacity sales |
20,118 |
28,449 |
-29% |
Heat sales |
87 |
82 |
6% |
Other sales |
259 |
153 |
69% |
TOTAL |
68,276 |
69,460 |
-2% |
Operating costs increased 32% year-on-year to RUR 41,061 mn.
Operating costs (in RUR mn)
9M2012 |
9M2011 |
chg | |
Purchased power |
12,963 |
5,914 |
119% |
Services of SO UES, ATS, CFS |
1,785 |
1,721 |
4% |
Depreciation |
7,999 |
6,605 |
21% |
Leasing expenses |
995 |
1,026 |
-3% |
Insurance expenses |
573 |
472 |
21% |
Repairs & maintenance |
2,429 |
2,192 |
11% |
Labor and related expenses |
5,476 |
5,363 |
2% |
Property tax |
3,913 |
3,478 |
13% |
Water tax |
590 |
598 |
-1% |
Other |
4,338 |
3,652 |
19% |
TOTAL |
41,061 |
31,021 |
32% |
Major factors for change in operating costs were:
growth in expenses for purchased power in connection with free bilateral agreements for the sale of electricity concluded in January-September 2012 to optimize the company's cash flow[5];
higher depreciation due to commissioning of a number of facilities into operation, including the coastal spillway of the Sayano-Shushenskaya hydropower plant (put into operation in 2011) and acquisition of five dams (dams of Bratskaya, Ust'-Ilimskaya and Irkutskaya hydropower plants) from the Russian state as payment for shares of the additional share issue.
As a result, operating profit for the reporting period decreased by 29% as compared to last year to RUR 27,215 mn.
Other revenue for the nine months of 2012 was RUR 3,282 mn, other expenses stood at RUR 5,871 mn. The largest portion of other expenses was losses from the mark-to-market revaluation of JSC Inter RAO UES shares in the amount of RUR 1,994 mn.
EBITDA fell by 22% to RUR 35,214 mn. This was mainly due to the removal of the investment component in tariffs since 2012.
RusHydro's net profit for the reporting period decreased by 18% to RUR 19,963 mn. The adjusted net profit for the reporting period fell by 10% to RUR 17,442 mn.
RusHydro's key financial position indicators as of September 30th, 2012
The Company's total assets increased to RUR 42,070 mn as of September 30th, 2012, or 6% against the similar figure as of December 31st, 2011, reaching RUR 702,362 mn.
The growth in assets was mainly caused by increase in financial investments, including granting long- term loans in the total amount of RUR 15,482 mn to the Company's subsidiaries and affiliates.
As of September 30th, 2012, total obligations stood at RUR 149,432 mn compared with RUR 124,815 mn as of the beginning of the reporting period. The increase was attributed primarily to raising loans from Sberbank of Russia and UniCredit Bank Austria AG in the amount of RUR 18,780 mn. The Company's credit portfolio rose 27% to RUR 87,796 mn; long-term loans make up 94% of the total debt portfolio.
The Company's equity for the nine months of 2012 increased by 3% to RUR 552,402 mn against RUR 535,402 mn as of the beginning of the reporting year. This was primarily due to net profit distribution for dividend payments in 2011 in the amount of RUR 2,500 mn and increase in non-distributed profit to RUR 19,963 mn based on the profit gained in current period.
The full financial statements in Russian only are available on the Company's website at: http://www.rushydro.ru/investors/reports.
[1]The insulated July-September financials are not reported in the official financial statements under RAS, they have been calculated and put into the press release for reference. The quarterly figures may not include the adjustments and revaluations made by the Company only for financial results starting from January 1.
[2] EBITDA calculated as gross profit before depreciation.
[3] Net profit adjusted for the mark-to-market revaluation of listed equity stakes, reserves for financial investment impairment, assets and potentially uncollectible accounts receivable.
[4] Until January 1, 2012 RusHydro's tariffs received by hydropower plants included special investment component to ensure the safe operation of hydropower plants and pumped storage plants as well as financing their investments needs. For 2011 the total amount of this tariff mark-up was set at RUR 12.9 bn. As of 2012, the investment component for RusHydro was cancelled.
[5] According to the regulations of the Russian wholesale power market, the supplier of electricity intending to enter into bilateral contracts must purchase the same amount of electricity from the market to fulfill its contractual obligations. In IFRS statements these costs are netted against corresponding revenue.
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