RusHydro initiates optimization of CAPEX plan
PJSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) suggests amendments to consolidated investment program of RusHydro Group for 2016-2019. Capex optimization is aimed at ensuring the Group’s financial stability, increase in operational and investment efficiency and improvement of the RusHydro investment profile.
Consolidated investment program of RusHydro Group includes investment programs of PJSC RusHydro and its key operating subsidiaries, as well as the investment program of RAO ES of the East Holding.
Total capital spending in 2016-2019 amounts to RUB 352.7 bn (including VAT), which is by RUB 31.8 bn (-8%) lower than previously planned amount of RUB 384.5 bn.
Consolidated capex plan for 2016-2019 (RUB bn, incl. VAT)
* - four priority projects in the Far East of Russia (1st stage of Yakutskaya TPP-2, 2nd stage of Blagoveshenskaya TPP, TPP in Sovetskaya Gavan’, 1st stage of Sakhalinskaya TPP-2)
** - including rehabilitation and technical upgrade and new construction
The Company’s Board of Directors took a note of draft investment program for 2016 and 2017-2019 on April 7, 2016.
The main items of the capex plan optimization include:
Consolidated capex plan of the Group from 2016 to 2019 foresees completion of construction projects in progress with commissioning of 2.67 GW of new electric capacity and 1,461 GCal/h of heat capacity.
Key investment projects in the North Caucasus include:
Key investment projects in the Far East include:
In 2016-2019, RusHydro Group plans to add 231.5 MW through rehabilitation and modernization projects of hydropower plants, as well as commission 1,167 km of overhead electricity transmission lines and 46.7 km heat transmission pipes in the Far East.
Optimization of consolidated investment program of RusHydro is carried out pursuant decrees by the President and the Government of the Russian Federation aimed to improve the efficiency of expenses of the government-controlled companies. A program of investment and operational efficiency increase and cost reduction was approved by RusHydro’s Board of Directors in December 2015 as part of the company’s business plan.
RusHydro will continue systemic efforts aimed to increase the efficiency of capex programs, analysis of economic efficiency of its projects with the view of exclusion of projects, failing the Company’s profitability criteria. The Company is aimed at development of new decision-making system, under which start of new projects, not providing sufficient return on investment and serving exclusively social functions, will be possible only in case of special decisions by the President and the Government of the Russian Federation.
As already announced earlier, RusHydro and the Russian Government have agreed on external audit of the Company to be conducted in the 1st half of 2016 with the view of identifying additional sources and scope of economy of operational and investment expenses of RusHydro Group for the medium term.
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.
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