OREANDA-NEWS. At a meeting of the company’s Board of Directors November 10, 2015 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: Directive of the Government of the Russian Federation dated 16.04.2015 № 2303p-P13 to reduce operating costs by at least 2-3% per year, accounting the results of a review from 01.07.2015 of tariffs for electricity transmission and a change of the volume of financing of the Investment Program for 2015.

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

Data in billion RUB, unless specified otherwise

Indicators

Approved plan for 2015

Adjusted plan for 2015

Change, %

Revenue (total), including:

78,7

79,4

0,9%

Revenue from electricity transmission

76,5

77,4

1,2%

Revenue from grid connection

1,4

1,1

-21,4%

Other revenue

0,8

0,8

0,0%

Cost of sales

72,3

72,0

-0,4%

EBITDA1

13,9

13,8

-0,7%

Net profit

-0,5

-0,4

20,0%

Amount of electric energy transmitted2, billion kWh

54,4

54,7

0,6%

Electric energy losses, %

9,44%

9,44%

0,00 p.p.

Indicators

Approved plan as at 31.12.2015

Adjusted plan as at 31.12.2015

Change, %

Loans and credits

42,7

42,1

-1,4%

Net debt3

42,4

42,0

-0,9%

Net asset value

54,9

55,0

0,2%
 

[1]EBITDA is calculated as follows: net profit + profit tax and other similar mandatory payments + interest payable + 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 1,2% higher than the previously approved Business Plan for 2015, due to the increase in the average tariff for electric energy transmission for the category "population" from July 1, 2015 and the growth of electric energy consumption. Reduction of the value of the planned revenue from grid connections is related to the termination of grid connection contracts in the Tver region as a result of failure on the part of the applicants to perform their obligations under the contracts.

Reduction of the cost relative to the previously approved plan for 2015 is due to lower forecast for such items as "Purchase of electric energy for losses" and "Third-party services". Decrease of the cost of sales, including, became possible thanks to accounting of the implementation of the "Cost Management Program" following the results of 6 months of 2015.

Earnings before interest, taxes, depreciation and amortization (EBITDA) is projected almost at the level of the previously approved Business Plan and will be 13.8 billion rubles. At the end of 2015 when adjusting the Business Plan some insignificant change in the financial result projected, which will be (-0,4) billion rubles. The main risks that may affect the results of the Company include: payment discipline of counterparties, interest rate on loans and sale of services for grid connection of preferential consumers.

Projected value of the joint operation productive supply to consumers according to the adjusted Business Plan for 2015 increased by 0,6% to 54,7 billion kWh. The main reason for the improvement was the increase in the forecast of electric energy consumption. The size of the relative value of losses is kept at the previously approved level.

The approved adjusted Business Plan includes the Investment Program for 2015, previously approved by the Board of Directors of the Company. The volume of financing of capital investments of the adjusted Investment Program amounts to 14,4 billion rubles (including VAT). During the implementation of the adjusted Investment Program it is planned to commission1,022 MVA of transformer capacity and 3,870 km of overhead and cable lines.

The approved adjusted Business Plan for 2015 reflects a conservative forecast of IDGC of Centre’s management on the performance following the results of the year. The Board of Directors approved the Plan of measures to increase efficiency and improve the financial and economic condition of the Company, which is aimed to achieve a break-even activity.