OREANDA-NEWS. April 03, 2015. At a meeting of the Board of Directors the adjusted Business Plan of the Company, including the Investment Program, for 2015 was approved. Adjustment of the Business Plan of the Company is related to the need to take into account several important factors such as: approval of tariffs for electricity transmission services by executive authorities of subjects of the Russian Federation, increase in the cost of servicing debt and change in socio-economic development of the Russian Federation.

Indicators of the adjusted Business Plan of the Company for 2015:

Data in billion RUB, unless specified otherwise

Indicators ="center"> Actual for 2014 ="center"> Adjusted plan for 2015 ="center"> Change, % ="center">
Revenue (total), including: 86,7 ="right"> 78,7 ="right"> -9,2% ="right">
Revenue from electricity transmission* 75,9 ="right"> 76,5 ="right"> 0,8% ="right">
Revenue from grid connection 1,5 ="right"> 1,4 ="right"> -6,7% ="right">
Revenue from resale of electric energy and power* 8,3 ="right"> 0,0 ="right"> - ="right">
Other revenue 1,0 ="right"> 0,8 ="right"> -20,0% ="right">
Cost of sales* 74,3 ="right"> 70,1 ="right"> -5,7% ="right">
EBITDA1 15,6 ="right"> 13,9 ="right"> -10,9% ="right">
EBITDA margin, % 18,0% ="right"> 17,7% ="right"> -0,3 p.p. ="right">
Net profit 3,3 ="right"> -0,5 ="right"> -115,2% ="right">
Net profit margin, % 3,8% ="right"> - ="right"> - ="right">
Amount of electric energy transmitted2, billion kWh 54,4 ="right"> 54,4 ="right"> 0,0% ="right">
Electric energy losses, % 9,17% ="right"> 9,44% ="right"> 0,27 p.p. ="right">
Electric energy losses, % (under comparable conditions) 9,17% ="right"> 9,10% ="right"> -0,07 p.p. ="right">
Indicators ="center"> As at 31.12.2014 ="center"> As at 31.12.2015 ="center"> Change, % ="center">
Loans and credits 37,2 ="right"> 42,7 ="right"> 14,8% ="right">
Net debt3 36,8 ="right"> 42,4 ="right"> 15,2% ="right">
[*]According to management accounting
[1] EBITDA is calculated as follows: net profit + profit tax and other similar mandatory payments + interest payable - interest receivable + depreciation charges
[2] Joint operation productive supply without taking into account losses of TGCs
[3] Net debt is calculated as follows: long-term debt + short-term debt – cash and cash equivalents – financial investments

Planned revenue for electric energy transmission services according to the adjusted Business Plan for 2015 is 0.8% higher than the fact in 2014 due to increase in the average tariff for electric energy transmission. A negative factor in the revision of the planned value of revenues for the electric energy transmission was removal from the forecast of the growth in the flat-rate tariff for other consumers in two of the four regions where the "last mile" was kept and decrease in the Required Gross Revenue in terms of non-controllable costs. Revenue growth from grid connection relative to the previously approved forecast is associated with the inclusion of a number of major contracts in the adjusted Business Plan for 2015, as well as increase in the number of scheduled connections of applicants in relation with the increase in funding for grid connection as provided for in the approved Investment Program.

Change in cost of sales relative to the previously approved plan for 2015 is explained with allocation from the cost of sales of services provided by the Company of commercial and administrative expenses of 2.1 bln RUB, according to para. 4.3.12. of the Management and Governance Letter to IDGC of Centre on the results of the interim audit of accounting (financial) statements, prepared in accordance with the Russian Accounting Standards, for the nine months ended September 30, 2014.

Earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to be at the level of the previously approved Business Plan and will be 13.9 bln RUB. As a result of increasing the key rate of the Central Bank of the Russian Federation it is expected to increase the average rate of borrowing up to 13.21%, which will increase the cost of servicing loans. Also, as a result of growth in total revenue significantly below the inflation rate and the growth of spending, the company’s financial results according to the adjusted Business Plan is projected at (-0.5) bln RUB.

The projected productive joint operation supply to consumers according to the adjusted Business Plan for 2015 is unchanged at 54.4 billion kWh. In 2015 IDGC of Centre has planned slight increase in losses compared with the fact in 2014 at 0.27%. The growth of the relative size of the losses is associated with a decrease in supply to the grid in 2015 as a result of removal of the transmission volume for "last mile" facilities and integration of networks of OJSC "Yargorelectroset". Electricity losses in the calculation under comparable conditions are projected at 9.10%, which is 0.07 p.p. lower than the fact in 2014.The adjusted Business Plan of the Company, including the Investment Program, for 2015 reflects the forecast of IDGC of Centre’s activity at the current economic situation. The Company will make every effort to achieve break-even operations. As part of measures to improve the financial condition the Company has prepared proposals for changes in laws and regulations, including those relating to reduction of shortfall in income from preferential grid connection, increasing the payment discipline and optimizing the cost of servicing the loan portfolio. Other IR news of the Company can be found at: http://www.mrsk-1.ru/en/investors/presentations/ir_news/