30.10.2013
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RusHydro announces 9 months 2013 RAS results

JSC RusHydro (MOEX, LSE: HYDR; OTCQX: RSHYY) announces its non-consolidated financial results under Russian accounting standards (RAS) for the nine months of 2013.


Key highlights:

  • 3Q 2013 revenue – RUB 26.8 bn (+11%); 9M 2013 – RUB 81 bn (+19%);
  • 3Q 2013 operating expenses decreased by 1%; for 9M 2013 increased by less than 2%;
  • 3Q 2013 EBITDA – RUB 14.5 bn (+26%), 9M 2013 EBITDA – RUB 48.1 (+36%);
  • EBITDA margin in 3Q – 54.1% (+6.5 p.p.), for 9M – 59.3% (+7.7 p.p.);
  • Net profit for 9M – RUB 27.6 bn (+39%), adjusted 9M net profit – RUB 32.6 bn (+45%).

Key financials for the 3Q and 9M 2012/2013 under RAS (in RUB mn)[i]



9M’13

9M’12

chg

3Q’13

3Q’12

chg

Revenue

81,009

68,276

19%

26,832

24,127

11%

Operating expenses

(41,798)

(41,061)

2%

(15,279)

(15,364)

-1%

Operating profit

39,211

27,215

44%

11,553

8,763

32%

Other revenue (adj.)[ii]

3,026

2,533

19%

-

1,109

-

Other expenses (adj.)[iii]

(8,861)

(5,121)

73%

(1,186)

(1,193)

-1%

EBITDA[iv]

48,055

35,214

36%

14,529

11,489

26%

Net profit

27,652

19,963

39%

8,093

6,712

21%

Net profit (adj.)[v]

32,624

22,484

45%

8,937

6,584

36%

In the 9 months of 2013, revenue increased by 19% to RUB 81,009 mn as compared to RUB 68,276 mn for the same period of 2012. The underlying factors behind the change in revenue were:

  • increase in electricity generation by RusHydro’s hydropower plants by 24% as compared to January-September 2012;
  • increase in electricity sales volumes and prices on the “day-ahead” market;
  • increase in capacity prices of the competitive capacity auctions (KOM) for the hydropower plants of the first price zone;
  • indexation of regulated electricity and capacity tariffs in 2013.

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



9M’13

9M’12

chg

3Q’13

3Q’12

chg

Electricity sales

59,128

47,812

24%

20,065

17,280

16%

Capacity sales

21,454

20,118

7%

6,639

6,749

-2%

Sales from rent

187

150

25%

66

47

40%

Heat sales

94

87

8%

12

11

9%

Other sales

146

109

34%

50

40

25%

TOTAL

81,009

68,276

19%

26,832

24,127

11%

Operating expenses increased by 2% to RUB 41,798 mn as compared to the same period of 2012.


Operating expenses (in RUB mn)



9M’13

9M’12

chg

3Q’13

3Q’12

chg

Purchased power

11,854

12,963

-9%

4,592

5,278

-13%

Depreciation

8,844

7,999

11%

2,976

2,726

9%

Labor expenses

4,772

4,781

-0%

1,805

2,056

-12%

Property tax

4,147

3,913

6%

1,384

1,308

6%

Repairs & maintenance

2,088

2,429

-14%

837

1,035

-19%

Services of System Operator, ATS, CFS

1,979

1,785

11%

692

636

9%

Other third-party services

1,239

1,059

17%

552

368

50%

Security expenses

1,068

969

10%

362

322

12%

Leasing expenses

834

995

-16%

269

313

-14%

Insurance expenses

761

479

59%

249

159

57%

Water tax

736

590

25%

239

180

33%

Estimated reserves

350

-

-

149

-

-

Other

2,293

1,944

18%

1,173

983

19%

TOTAL

41,798

41,061

2%

15,279

15,364

-1%

Major factors of change in operating expenses were:

  • decrease in electricity purchases on the “day-ahead” market, including for the fulfillment of regulated and unregulated sales (as per power market regulations);
  • 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;
  • unsubstantial changes of certain other expenses, which include corporate expenses, utilities, business related travel expenses, etc. In January-September 2013, other expenses increased by RUB 349 mn or 18% as compared to the same period of 2012 and amounted to RUB 2,293 mn.

As a result, operating profit for the reporting period increased by 44% as compared to last year to RUB 39,211 mn.


Other revenue for the 9 months of 2013 was RUB 3,026 mn, other expenses stood at RUB 8,861 mn. The largest portion of other expenses was expenses associated with reserves in the amount of RUB 3,273; and a provision for mark-to-market revaluation of listed equity stakes in the amount of RUB 2,814 mn, of which shares of Inter RAO UES account for RUB 2,790 mn.


EBITDA increased by 36% to RUB 48,055 mn.


RusHydro's net profit for the reporting period increased by 39% to RUB 27,652 mn. Net profit adjusted for non-cash items was RUB 32,624 mn, a 45% increase as compared to last year.


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


The Company's total assets increased by RUB 63,395 mn as of September 30th, 2013, or 8% against the similar figure as of December 31st, 2012, reaching RUB 817,174 mn.


The growth in assets in January-September 2013 was mainly a result of depositing in banks of proceeds from domestic bonds placement in the amount of RUB 20 bn; obtainment of stakes of JSC Irkutsk electronetwork company, JSC RAO Energy Systems of East, JSC Sakhalin energy company and JSC Ust’-Srednekanskaya HPP as payment for RusHydro’s shares of additional issue during the pre-emptive rights exercise in the amount of RUB 16,973 mn; acquisition of shares of JSC Sulak GidroKaskad (100% subsidiary of RusHydro, developer of the Gotsatlinskaya hydropower plant) in the amount of RUB 8,960 mn.


As of September 30th 2013, total obligations stood at RUB 200,420 mn compared with RUB 161,005 mn as of the beginning of the reporting period. The increase was attributed primarily to placement of RUB 20 bn of domestic bonds. The Company's debt portfolio rose by 19% to RUB 112,816 mn starting from the beginning of the year; long-term loans make up 60% of the total debt portfolio.


The Company's equity for January-September 2013 increased by 4% to RUB 616,676 mn against RUB 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 RUB 12,950 mn out of profit of current reporting period as well as distribution of profit for 2012 in the amount of RUB 10,292 mn to the accumulation fund.


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


The Company plans to publish its consolidated results for the nine months of 2013 under International financial reporting standards (IFRS) on December 18, 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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