RusHydro announces 1H 2015 RAS results
Key highlights:
- 2Q 2015 revenue – RUB 27,509 mn (-4%), 1H 2015 revenue – RUB 51,212 bn (-8%);
- 1H 2015 operating expenses – RUB 28,727 mn (-2%);
- 2Q 2015 EBITDA – RUB 16,143 mn (-2%), 1H 2015 EBITDA – RUB 29,458 mn (-10%);
- EBITDA margin in 2Q 2015 – 59% (+1 p.p.), in 1H 2015 – 58% (-1 p.p.);
- Reported net profit for 1H 2015 – RUB 20,176 mn (-8%), adjusted net profit – RUB 19,426 mn (-13%).
Key financials for the 1H 2014/2015 under RAS (in RUB mn)
|
1H’15 |
1H’14 |
chg |
2Q’15 |
2Q’14 |
chg |
|
|
Revenue |
51,212 |
55,426 |
-8% |
27,509 |
28,508 |
-4% |
|
Operating expenses |
28,727 |
29,233 |
-2% |
14,883 |
15,294 |
-3% |
|
Operating profit |
22,485 |
26,193 |
-14% |
12,626 |
13,214 |
-4% |
|
EBITDA[1] |
29,458 |
32,586 |
-10% |
16,143 |
16,414 |
-2% |
|
Net profit |
20,176 |
22,000 |
-8% |
- |
- |
- |
|
Net profit (adj.)[2] |
19,426 |
22,228 |
-13% |
11,063 |
12,026 |
-8% |
Revenue
In the 1st half of 2015, revenue decreased by 8% to RUB 51,212 mn as compared to RUB 55,426 mn for the same period of 2014. The underlying factors behind the change in revenue were:
- decrease in production and electricity output by hydropower plants of PJSC RusHydro by 14.2% as a result of: a) lower than long-run average water inflow to reservoirs of the Volga-Kama cascade and low water reserves in reservoirs at the beginning of 2015; b) low water levels of Angara and Enisey rivers (excluding Novosibirsky reservoir);
- increase in “day-ahead” prices in the 2nd pricing zone due to decrease in electricity generation by hydropower plants and higher load of fossil fuel fired power plants;
- decrease in the average prices on the “day ahead” market in the 1st pricing zone against the background of non-indexation of gas tariffs for industrial consumers starting from the second half of 2014 as well as sluggish electricity demand;
- increase in capacity sales following partial liberalization of hydro capacity market in the second price zone from May 1, 2014[3].
Revenue breakdown (RUB mn)
|
1H’15 |
1H’14 |
chg |
2Q’15 |
2Q’14 |
chg |
|
|
Electricity sales |
34,547 |
40,075 |
-14% |
19,699 |
21,164 |
-7% |
|
Capacity sales |
16,031 |
14,703 |
9% |
7,292 |
6,841 |
7% |
|
Other sales |
634 |
648 |
-2% |
518 |
503 |
3% |
|
TOTAL |
51,212 |
55,426 |
-8% |
27,509 |
28,508 |
-4% |
Operating expenses
Operating expenses in January-June 2015 decreased by 2% to RUB 28,727 mn as compared to the same period of 2014.
Operating expenses breakdown (in RUB mn)
|
1H’15 |
1H’14 |
chg |
2Q’15 |
2Q’14 |
chg |
|
|
Depreciation |
6,973 |
6,393 |
9% |
3,517 |
3,200 |
10% |
|
Purchased electricity and capacity |
6,415 |
8,443 |
-24% |
3,297 |
4,559 |
-28% |
|
Property tax |
3,244 |
2,997 |
8% |
1,629 |
1,495 |
9% |
|
Labor expenses |
2,749 |
2,552 |
9% |
1,461 |
1,331 |
10% |
|
Services of System Operator, ATS, CFS |
1,387 |
1,387 |
- |
698 |
694 |
1% |
|
Other third-party services |
1,245 |
765 |
63% |
629 |
482 |
30% |
|
Repairs & maintenance |
1,211 |
1,253 |
-3% |
722 |
753 |
-4% |
|
Security expenses |
866 |
820 |
6% |
471 |
412 |
14% |
|
Other taxes and fees (in relation to labor expenses) |
766 |
692 |
11% |
390 |
339 |
15% |
|
Contingencies |
662 |
535 |
24% |
322 |
273 |
18% |
|
Rent |
587 |
544 |
8% |
300 |
300 |
- |
|
Insurance expenses |
587 |
544 |
8% |
308 |
282 |
9% |
|
Water tax |
459 |
463 |
-1% |
270 |
238 |
13% |
|
Leasing expenses |
152 |
485 |
-69% |
70 |
230 |
-70% |
|
Other |
2,635 |
2,613 |
1% |
799 |
706 |
13% |
|
TOTAL |
28,727 |
29,233 |
-2% |
14,883 |
15,294 |
-3% |
Major factors of change in operating expenses were (among the highest constituent expenses):
- decrease in purchased electricity and capacity as a result of: a) lower consumption of electricity and capacity for own needs due decrease in electricity output; b) decrease in purchased electricity for unregulated long-term contracts due lower sales under said contracts;
- increase in labor expenses and related other taxes in terms of fees from the payroll budget and health insurance due to: a) indexation of salaries of operating staff of the Company’s branches in accordance with collective agreement; b) redundancy payments during headcount optimization in 2015;
- increase in depreciation and property tax as a result of commissioning of new assets.
Profit
Operating profit for the period decreased by 14% or RUB 3,708 mn to RUB 22,485 mn.
EBITDA decreased by 10% as compared to the same period of 2013 and amounted to RUB 29,458 mn.
RusHydro's net profit for the reporting period decreased by 8% to RUB 20,176 mn. Net profit adjusted for non-cash items decreased by 13% to RUB 19,426 mn as compared to RUB 22,228 mn in the same period of the previous year.
The difference between the reported and adjusted net profit is attributed mainly to the following non-cash effects:
- mark-to-market revaluation of listed equity stakes in the amount of RUB 1,024 mn;
- accrued reserves on accounts receivable in the amount of RUB 436 mn;
- gains from other reserves in the amount of RUB 162 mn.
RusHydro's financial position as of June 30, 2015
The Company's total assets increased by RUB 31,709 mn as of June 30, 2015, or 4% against the similar figure as of December 31, 2014, reaching RUB 887,289 mn.
As of June 30, 2015, total liabilities increased by 13% or RUB 17,567 mn and amounted to RUB 154,617 mn. The growth in liabilities is related to higher due dividends for 2014.
The Company's debt portfolio rose by 8% from the beginning of the year from RUB 114,177 mn to RUB 123,142 mn; long-term loans make up 75% of total debt portfolio.
The Company's equity for January-June 2015 increased by 2% to RUB 732,605 mn against RUB 718,461 mn as of the beginning of the reporting year.
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