28.10.2020
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RusHydro announces 9M 2020 RAS results

October 28, 2020. Moscow, Russia. PJSC RusHydro (MOEX, LSE: HYDR; OTCQX: RSHYY) announces non-consolidated financial results under Russian accounting standards (RAS) for the nine months ended September 30, 2020. Sustainable financial performance lays the foundation for the company’s investment case and growth of dividend payments.


Key highlights:

  • EBITDA – RUB 72,449 mn (+23%);
  • Reported net profit – RUB 42,716 mn (+29%);
  • Since July 1st 2017, a surcharge to capacity prices in 1st and 2nd price zones in order to attain base level of end-user tariffs in the Far East of Russia is reflected in PJSC RusHydro’s revenue and operating expenses[1]. In 9M20, the surcharge totaled RUB 30,793 mn, in the 9M19 – RUB 26,245 mn; Adjusted for the surcharge revenue and expenses (here and below in the text) were:
  • Revenue – RUB 104,852 mn (+17%);
  • Operating expenses – RUB 45,633 mn (+6%).


Key financials for 3Q and 9M 2020 under RAS (in RUB mn), excluding surcharge


 

9M’20

9M’19

chg

3Q’20

3Q’19

chg

Revenue (adj. for surcharge)

104,852

89,386

17%

34,343

29,711

16%

Operating expenses (adj. for surcharge)

(45,633)

(43,211)

6%

(15,885)

(14,560)

9%

Operating profit

59,219

46,175

28%

18,458

15,151

22%

EBITDA[2]

72,449

58,801

23%

22,912

19,417

18%

Net profit

42,716

33,242

29%

12,846

12,002

7%

Revenue


In the first nine months of 2020, revenue increased by 17% or RUB 15,466 mn including electricity sales growth of 14% following output growth by HPPs and capacity sales growth of 23% primarily as a result of commissioning of Zaramagskaya HPP-1 and Verkhnebalkarskaya small HPP.


Revenue breakdown (RUB mn)


 

9M’20

9M’19

chg

3Q’20

3Q’19

chg

Electricity sales

65,362

57,330

14%

20,803

19,438

7%

Capacity sales

39,111

31,780

23%

13,395

10,179

32%

Other sales

379

276

37%

145

94

54%

TOTAL

104,852

89,386

17%

34,343

29,711

16%

Operating expenses


Operating expenses in the first nine months of 2020 increased by 6% to RUB 45,633 mn as compared to the corresponding period last year. The increase is primarily due to commissioning of Zaramagskaya HPP-1 and Verkhnebalkarskaya small HPP.


The main changes were observed in the following items:

  • Rent (increase of RUB 1,506 mn) following property rent agreement of Zaramagskaya HPP-1 commissioned in February 2020[3];
  • Depreciation (increase of RUB 605 mn) following commissioning of new facilities and modernization of operating assets;
  • Water tax (increase of RUB 513 mn) due to HPP production growth.


Operating expenses breakdown (in RUB mn)


 

9M’20

9M’19

chg

3Q’20

3Q’19

chg

Depreciation

13,230

12,625

5%

4,454

4,266

4%

Purchased electricity and capacity

5,603

6,227

-10%

2,005

1,760

14%

Labor expenses, taxes and contributions

5,566

5,487

1%

1,826

1,818

-

Property tax

4,761

4,551

5%

1,607

1,532

5%

Other third-party services

3,084

2,542

21%

1,136

923

23%

Power system services

2,505

2,328

8%

884

801

10%

Rent

2,495

989

152%

828

278

198%

Repairs and maintenance

2,109

2,444

-14%

972

952

2%

Water tax

2,023

1,510

34%

663

620

7%

Security expenses

 1,403

1,321

6%

497

442

12%

Insurance expenses

1,249

1,287

-3%

423

455

-7%

Other

1,605

1,900

-16%

590

713

-17%

TOTAL

45,633

43,211

6%

15,885

14,560

9%

Profit


Operating profit for the first nine months of 2020 increased by RUB 13,044 mn as compared to the same period last year and amounted to RUB 59,219 mn.


EBITDA in the first nine months of 2020 increased by 23% to RUB 72,449 from RUB 58,801 in 9M’19.

Net profit in the reporting period increased by 29% to RUB 42,716 mn.


RusHydro's financial position as of September 30, 2020


The Company's total assets increased by RUB 69,833 mn as of September 30, 2020, or 7% against the similar figure as of December 31, 2019, reaching RUB 1,134,027 mn.


As of September 30, 2020, total liabilities increased by 13% or RUB 27,063 mn as compared to the similar figure as of December 31, 2019 and amounted to RUB 239,287 mn.


The Company's debt portfolio decreased by 5% as compared to the beginning of the reporting year to RUB 137,330 mn. Long-term loans comprise 76% of the total portfolio.


The Company's equity in the first nine months of 2020 increased by 5% to RUB 894,740 mn against RUB 851,970 mn as of the beginning of the reporting year.


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


RusHydro Group will announce consolidated 9M’20 IFRS results before November 30, 2020.





1 In July 2017, the Resolution of the Russian Government No. 895 “On reaching basic rates (tariffs) for electric power (capacity) in the territories of the Far East Federal region (the “Far East”)” became effective, under which rates for consumers in the territories of the Far East should be reduced starting from 1 January 2020 to the basic level  of RUB 5.00 / kWh. According to the Resolution of the Russian Government No. 1614-r and No. 1615-r of 28 July 2017, PJSC RusHydro was appointed as the recipient of a premium to the price for capacity provided by the Company in the price zones of the wholesale market under CCS agreements. The premium to the price for capacity is set in order to achieve the basic level of rates (tariffs) for electricity (capacity) planned for the next regulation period in the Far East constituent regions. The Company translates the collected amounts of margin in the form of free-of-charge targeted contributions to the budgets of the respective regions. The Group’s companies being guaranteeing suppliers will receive compensation for the shortage of income related to the reduction of rates, through subsidies from the Far East constituent regions.

2 EBITDA calculated as gross profit before depreciation.

3In September 2020 following completion of construction and necessary corporate procedures Zaramagskaya head HPP and Zaramagskaya HPP-1 were bought back by PJSC RusHydro.

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