29.07.2013
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RusHydro announces 1H 2013 RAS results

JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces its non-consolidated financial results under Russian accounting standards (RAS) for the first six months of 2013.


Key highlights:

  • Strong half-yearly results of the core hydropower generation business on high storage levels and affluent water inflows, cost control;
  • In 2Q 2013 revenue increased 20%, in 1H 2013 – 23%;
  • 2Q 2013 EBITDA – RUR 17.4 bn (+45%), 1H 2013 EBITDA – RUR 33.5 bn (+41%);
  • EBITDA margin in 2Q – 60.6% (+10.4 p.p.), in 1H – 61.9% (+8,1 p.p.);
  • Net profit in 1H – RUR 19.6 bn (+48%), adjusted 1H net profit – RUR 23.7 bn (+50%);
  • In 1H 2013, operating expenses were up only 3%.

Key financials for the 1H 2013 under RAS (in RUR mn)[i]


2Q 2013

2Q 2012

chg

1H 2013

1H 2012

chg

Revenue

28,733

23,959

20%

54,177

44,149

23%

Operating expenses

14,261

14,591

2%

26,519

25,697

3%

Operating profit

14,472

9,368

54%

27,658

18,452

50%

Other revenue (adj.)[ii]

1,952

701

178%

3,134

1,424

120%

Other expenses (adj.)[iii]

(4,768)

(2,311)

106%

(7,675)

(3,928)

95%

EBITDA[iv]

17,411

12,030

45%

33,526

23,725

41%

Net profit

10,222

6,923

48%

19,559

13,251

48%

Net profit (adj.)[v]

12,499

8,405

49%

23,687

15,900

50%

For the first six months of 2013, revenue increased by 23% to RUR 54,177 mn as compared to RUR 44,149 mn in the same period of 2012. The underlying factors behind the change in revenue were:

  • increase in electricity generation by RusHydro’s hydropower plants by 22% as compared to January-June 2012;
  • increase in electricity sales volumes and prices on the “day-ahead” market;
  • increase in capacity prices of the competitive capacity auctions for the HPP’s of the first pricing zone;
  • indexation of regulated electricity and capacity tariffs;
  • increase in volumes and tariffs of regulated power sales.

As illustrated in the table below (RUR mn), the dominant share of revenues comes from electricity and capacity sales:


2Q 2013

2Q 2012

chg

1H 2013

1H 2012

chg

Electricity sales

21,883

17,699

23%

39,063

30,532

28%

Capacity sales

6,707

6,144

9%

14,815

13,369

11%

Sales from rent

60

51

18%

121

103

17%

Heat sales

22

20

10%

82

76

8%

Other sales

61

45

36%

96

69

39%

TOTAL

28,733

23,959

20%

54,177

44,149

23%

Operating expenses increased by 3% to RUR 26,519 mn as compared to the same period of 2012.


Operating expenses (in RUR mn)



1H 2013

1H 2012

chg

Purchased power

7,262

7,685

-6%

Depreciation

5,868

5,273

11%

Labor expenses

2,967

2,725

9%

Property tax

2,762

2,605

6%

Repairs & maintenance

1,251

1,394

-10%

Services of System Operator, ATS, CFS

1,286

1,149

12%

Other third-party services

687

691

-1%

Security expenses

706

554

27%

Leasing expenses

565

682

-17%

Insurance expenses

532

888

-40%

Water tax

497

411

21%

Estimated reserves

201

-

-

Other

1,935

1,640

18%

TOTAL

26,519

25,697

3%

Major factors of change in operating expenses were:

  • decrease in electricity purchases by Zagorskaya pumped storage plant due to repairs and maintenance;
  • decrease in electricity purchases on the “day-ahead” market, including for the fulfillment of regulated and unregulated sales;
  • decrease in electricity purchases on the balancing market;
  • increase in depreciation as a result of commissioning of new equipment;
  • decrease in repairs and maintenance expenses due to shorter planned outages, decrease in works implemented by contracting parties.

As a result, operating profit for the reporting period increased by 50% as compared to last year to RUR 27,658 mn.


Other revenue for the six months of 2013 was RUR 3,134 mn, other expenses stood at RUR 7,675 mn. The largest portion of other expenses was expenses associated with reserves in the amount of RUR 3,908; and a provision for mark-to-market revaluation of listed equity stakes in the amount of RUR 2,458 mn.


EBITDA increased by 41% to RUR 33,526 mn.


RusHydro's net profit for the reporting period increased by 48% to RUR 19,559 mn. Net profit adjusted for non-cash items was RUR 23,687 mn, a 50% increase as compared to last year.


RusHydro's key financial position indicators as of June 30th, 2013


The Company's total assets increased by RUR 58,223 mn as of June 30th, 2013, or 8% against the similar figure as of December 31st, 2012, reaching RUR 812,002 mn.


The growth in assets in January-June 2013 was mainly a result of depositing in banks of proceeds from domestic bonds placement in the amount of RUR 20 bn.


As of June 30th, 2013, total obligations stood at RUR 203,419 mn compared with RUR 161,081 mn as of the beginning of the reporting period. The increase was attributed primarily to placement of RUR 20 bn of domestic bonds. The Company's debt portfolio rose by 19% to RUR 112,864 mn starting from the beginning of the year; long-term loans make up 62% of the total debt portfolio.


The Company's equity for the six months of 2013 increased by 3% to RUR 603,583 mn against RUR 592,698 mn as of the beginning of the reporting year. The growth is primarily connected to an increase in undistributed profit in the amount of RUR 4,857 mn out of profit of current reporting period as well as distribution of profit for 2012 in the amount of RUR 10,292 mn to the accumulation fund.


The full financial statements are available on the Company’s website at: http://www.eng.rushydro.ru/investors/reports/


The Company plans to publish its consolidated results for the 1st half of 2013 under International financial reporting standards (IFRS) on August 29 2013.



[i] The quarterly figures are not reported in the official financial statements under RAS, they have been calculated and put into the press release for reference

[ii] Adjusted for the income from redemption and other disposal of investments.

[iii] Adjusted for the expense from redemption and other disposal of investments.

[iv] EBITDA calculated as gross profit before depreciation.

[v] Net profit adjusted for the mark-to-market revaluation of listed equity stakes, reserves for financial investment impairment, assets and potentially uncollectible accounts receivable, contingencies This indicator is not reported in the official financial statements under RAS and has been calculated and put into the press release for reference.

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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