OREANDA-NEWS. JSC Inter RAO today announced RAS (Russian Accounting Standards) financial results for the first 9 months of 2014. JSC Inter RAO discontinued power generation and heat production operations on September 30, 2013 with the transfer of the generation assets of Ivanovskiye CPP to its JSC Inter RAO - Electric Power Plants subsidiary. Therefore, the reports of JSC Inter RAO for the first 9 months of 2013 include the performance of Ivanovskiye CPP, while the reports for the first 9 months of 2014 no longer include any power generation or heat production.

The revenue of JSC Inter RAO was 21.6 billion rubles in the first 9 months of 2014, down 9.9 billion rubles (31.4%) year-on-year.

Revenues from electricity exports were 12.4 billion rubles, down 5.4 billion rubles (30.3%) from the first 9 months of 2013, reflecting lower export volumes and lower Nord Pool prices. The strongest reduction in electricity exports by volume is attributable to Finland, Belarus and Lithuania (42.7%, 57.4% and 22.8% respectively). Exports to other traditional markets changed marginally, mostly due to devaluation of ruble against U.S. dollar.

Revenues from WECM sales of electricity and capacity were 6.8 billion rubles in the first 9 months of 2014, down 5.3 billion rubles (43.8%) year-on-year. This change reflects the discontinuation of internal power generation, the reduction in domestic sales of electricity due to smaller imports, and the reduction in transit flow between different WECM price zones.

Revenues from other sales were 2.4 billion rubles in the first 9 months of 2014, compared to 1.7 billion rubles in the same period a year ago, primarily reflecting increased deliveries of gas turbines to Venezuela.

Cost of goods sold was 17.7 billion rubles in the first 9 months of 2014, down 9.0 billion rubles (33.7%) from the same period of 2013. This change is primarily attributable to 7.4 billion ruble (36.3%) reduction in the cost of electricity and capacity purchased on WECM due to smaller export volumes, and 1.7 billion ruble reduction in the cost of internally generated electricity and capacity.

Gross profit was 3.9 billion rubles in the first 9 months of 2014 compared to 4.8 billion rubles in the same period a year ago.

Selling costs were 1.9 billion rubles in the first 9 months of 2014, down 1.0 billion rubles (34.5%) year-on-year, primarily reflecting the lower cost of electricity transmission due to reduced export volumes.

General and administrative expenses were 3.0 billion rubles in the first 9 months of 2014, down 0.2 billion rubles (6.3%) year-on-year.

Sales loss was 1.0 billion rubles in the first 9 months of 2014 compared to sales loss of 1.3 billion rubles in the first 9 months of 2013.

Balance of other income/expenses was 1.5 billion rubles compared to 0.6 billion rubles in the same period of 2013. Foreign exchange gains from the appreciation of U.S. dollar and euro against Russian ruble were the biggest factor in this change.

As the result, net profit was 4.0 billion rubles in the first 9 months of 2014, compared to 3.5 billion rubles in the same period last year.

Balance Sheet

Total assets of JSC Inter RAO increased by 14.7 billion rubles (4.2%) to 361.0 billion rubles as of September 30, 2014, reflecting an increase in current assets partially offset by a decrease in non-current assets.

Non-current assets reduced by 6.9 billion rubles (2.2%) in the first 9 months of 2014 to 305.8 billion rubles at the end of the reporting period. This change primarily reflects the reduction in long-term accounts receivable due to their partial settlement.

Current assets increased by 21.6 billion rubles (64.3%) in the first 9 months of 2014 to 55.2 billion rubles as of September 30, 2014. The most significant factors in this change include short-term accounts receivable, which increased by 1.4 billion rubles (11.8%) to 13.3 billion rubles due to an increase in current accounts receivable for electricity supplies; short-term financial investments, which increased by 3.1 billion rubles (73.8%) to 7.3 billion rubles due to reclassification of long-term loans issued into short-term category, and also due to higher allocations to deposits longer than 3 months; and cash and cash equivalents, which increased by 17.3 billion rubles (103.6%) to 34.0 billion rubles.

Total debt increased by 11.0 billion rubles (by a factor of 3.1) to 16.3 billion rubles in the first 9 months of 2014 due to the taking of a new loan. Debt portfolio consists entirely of long-term loans.

Total liabilities (excluding loans and borrowings) changed marginally from the beginning of the year and were 10.4 billion rubles at the end of the third quarter.