Divestment of non-core assets brought RusHydro additional RUB 1.8 bn in 2019
February 13, 2020 Moscow, Russia. PJSC RusHydro’s (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) Board of Directors acknowledged Management’s effective performance at divestment of non-core assets and optimization of the Group’s corporate structure in 2019.
RusHydro continues to carry out its ongoing plan on optimization of affiliated companies. In 2016-2019, the total number of affiliated companies decreased by 25% to 87 following sale of non-core financial investments, liquidation of non-operational companies and merger of companies with duplicate functions.
From 2017 to 2019, the Group’s asset structure in Kamchatka reduced to 2 affiliated companies (PJSC Kamchatskenergo and JSC KSEN) from 6. A single center responsible for the region’s electricity supply has been created at PJSC Kamchatskenergo. Geothermal and hydroelectric assets were integrated in it as well. Such effective optimization of business processes helped reduce operational expenses.
In 2019, RusHydro Group has divested 144 non-core assets. In particular, 105 assets were sold, including minority stakes in PJSC FGS UES, PJSC Rosseti, PJSC T Plus, JSC Fortum, a 40% stake in LLC VolgaHydro LLC, real estate property, etc. Thanks to divestment of non-core assets, the company generated RUB 1.8 bn., and increase of 24% over 2018.
On top of that, The Group has gratuitously transferred 15 non-core assets to the state and municipal property ownership and liquidated 24 assets which should yield saving of a total of RUB 80 mn per year in maintenance costs.
By the end of 2020, the Group plans to terminate its participation in 15 companies, including consolidation of DGK power maintenance companies.
By end of 2021, RuShydro plans to optimize the Group’s corporate structure to 60 companies to reduce non-manufacturing costs and integrate business processes, primarily in the Far East.
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 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.