02.03.2021
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RusHydro announces 2020 IFRS results

March 2, 2021. Moscow, Russia. RusHydro Group (hereinafter referred to as the “Group”, ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces its audited consolidated financial statements for the year ended December 31, 2020, prepared in accordance with International Financial Reporting Standards (IFRS). Historic financial results following record electricity output, commissioning of new capacities, increase in electricity consumption in the Far East and management’s focus on operational efficiency.


Key highlights for 2020:

  • RUB 429,593 mn – total revenue (+5.6% y-o-y);
  • RUB 120,268 mn – EBITDA (+23.3% y-o-y);
  • 28.0% - EBITDA margin (+4.0 p.p. as compared to 2019);
  • 2.1% decrease in manageable cash cost1 growth as compared to 2019;
  • RUB 46,607 mn – net profit (as compared to RUB 643 mn in 2019);
  • 0.99x – net debt2/EBITDA.


Key highlights for 4Q of 2020:

  • RUB 118,360 mn – total revenue (-0.5% y-o-y);
  • RUB 29,720 mn – EBITDA (+9.6% y-o-y);
  • 25.1% - EBITDA margin (+2.3 p.p. as compared to 4Q’19);
  • 4.3% decrease in manageable cash cost growth as compared to 4Q‘19.


4Q and 2020/2019 highlights (in RUB mn)


 

4Q/20

4Q/19

chg.

2020

2019

chg.

Revenue

118,360

119,005

-0.5%

429,593

406,625

5.6%

Operating expenses

97,595

99,954

-2.4%

339,990

336,575

1.0%

Other operating profit

240

560

-57.1%

1 151

1 174

-2.0%

Operating profit3 

21,005

19,611

7.1%

90,754

71,224

27.4%

EBITDA4 

29,720

27,115

9.6%

120,268

97,544

23.3%

Net profit

-13,864

-34,514

-59.8%

46,607

643

x 70


Operating results

In 2020, electricity generation by RusHydro Group amounted to 130,987 GWh (+8.2%), including Boguchanskaya hydropower plant5 – 148,625 GWh (+8.4%).


Main factors affecting production growth were water inflows to main reservoirs of the hydropower plants above the normal level; increase of electricity consumption in the Far Eastern Federal District by 1.1% and commissioning of new capacities and modernization of existing facilities.


In 2020, installed capacity of RusHydo Group’s coal-fired thermal power plants’ decreased by 27% contributing to improvement of the Group’s ESG profile.


Detailed review of operational results is available at the Company’s official website at:

http://www.eng.rushydro.ru/investors/IR_news/112677.html


Key events since January 2020

  • The Group has finalized divestment of its assets in Armenia and completed asset swap with SUEK Group’s companies, which included the exchange of a 100% interest of JSC LUR and a 100% interest in the share capital of LLC Primorskaya GRES for a 41.98% interest in the Group’s subsidiary PJSC DEK;
  • Electricity production and capacity supply began at 346 MW Zaramagskaya HPP-1 in North Ossetia. The plant was built under capacity supply agreement (DPM). Annual revenue contribution of RUB 10 bn;
  • Sovetskaya Gavan in Khabarovsk Krai with electric and heat capacity of 126 MW and 200 GCal/h, respectively and average annual electricity output of 630 GWh has been commissioned;
  • Verhnebalkarskaya, Ust-Dzhegutinskaya and Barsuchkovskaya small hydropower plants have been put into operation in Kabardino-Balkarian Republic, Karachai Cherkessia Republic and Stavropol region respectively with combined installed capacity of 20.85 MW under capacity supply agreement for renewables (DPM). Annual combined electricity output stands at 109 GWh;
  • First floating solar power plant has been put into operation in the reservoir of Nizhne-Bureyskaya HPP with installed capacity of 54 kW;
  • RusHydro Group commissioned 3.9 MW wind-diesel power plant in Tiksi arctic village in the Sakha (Yakutia) Republic.


Revenue

Revenue breakdown in 4Q and 2020/2019 (in RUB mn)


 

4Q/20

4Q/19

chg.

2020

2019

chg.

Electricity sales

71,212

72,404

-1.6%

278,335

266,713

4.4%

Incl. Far East surcharge6 

5,281

5,531

-4.5%

26,977

23,794

13.4%

Capacity sales

17,247

13,180

30.9%

60,415

48,177

25.4%

Heat and hot water sales

13,413

13,532

-0.9%

41,242

40,645

1.5%

Other sales

9,487

14,773

-35.8%

29,830

34,901

-14.5%

Other government grants

7,001

5,116

36.8%

19,771

16,189

22.1%

Total revenue

118,360

119,005

-0.5%

429,593

406,625

5.6%

 

In 2020, total revenue of the Group increased by 5.6% to RUB 429,593 mn as compared to 2019. The change is associated with the following key factors:

  • increase of RUB 12,238 mn on the back of sales volume growth under capacity supply agreements (DPM) following commissioning of Zaramagskaya HPP-1, Verkhnebalkarskaya small HPP, Ust-Dzhegutinskaya small HPP and sales volume growth and actual price increase at PJSC DEK;
  • increase of RUB 5,597 mn following increase of electricity output on the back of higher water inflows to the majority of HPPs’ reservoirs;
  • increase of RUB 3,982 mn in Supply companies segment following mainly at PJSC DEK on the back of increase in output;
  • increase of RUB 2,275 mn on the back of tariff, electricity sales volume growth and subsidies at Far East energy companies segment5 ;
  • increase of RUB 597 mn from heat and hot water sales following tariff and production volume growth.


Operating expenses

Operating expenses in 4Q and 2020/2019 (in RUB mn)


 

4Q/20

4Q/19

chg.

2020

2019

chg.

Employee benefit expenses

22,284

22,993

-3.1%

80,182

80,376

-0.2%

Third parties expenses and other7 

21,386

28,202

-24.2%

76,597

85,044

-9.9%

Fuel expenses

19,474

21,528

-9.5%

67,846

71,433

-5.0%

Purchased electricity and capacity

18,221

12,353

47.5%

56,036

46,310

21.0%

Depreciation

7,667

6,792

12.9%

28,902

25,686

12.5%

Taxes other than on income

3,580

3,446

3.9%

13,252

12,133

9.2%

Other materials

3,767

3,472

8.5%

12,062

11,260

7.1%

Water usage expenses

1,216

1,168

4.1%

5,113

4,333

18.0%

TOTAL

97,595

99,954

-2.4%

339,990

336,575

1.0%

 

Total operating expenses in 2020 as compared to the same period last year increased by 1.0% to RUB 339,990 mn due to the following factors:

  • increase in purchased electricity and capacity by RUB 9,726 mainly in Retail segment in PJSC DEK following increase of purchased electricity ;
  • increase in depreciation expense by RUB 3,216 mn and increase in taxes other than on income by RUB 1,119 mn following commissioning of new facilities as well as modernization at PJSC RusHydro’s facilities;
  • decrease in fuel expenses mainly in JSC DGK by 3,587 mn following decrease of electricity output and disposal of Primorskaya GRES;
  • decrease in third parties expenses and other is primarily driven by absence of technical connection to grid expenses in 2020 (in 2019 – RUB 7,010 mn).  

 

Profit

 

In 2020, the Group’s net profit increased 70-fold to RUB 46,607 mn.


In the same period, EBITDA increased by 23.3% to an all-time high level of RUB 120,268 mn.


Key indicators of financial position


As of December 31, 2020, the Group's assets increased by RUB 16,916 mn or 1.8% to RUB 942,035 mn against December 31, 2019 following increase in property, plant & equipment (implementation of the Group’s investment program) and working capital.


As at the end of the reporting period, the Group's liabilities decreased by RUB 22,149 mn or 6.2% to RUB 333,095 mn as compared to December 31, 2019 following decrease in accounts payable and value of non-deliverable forward contract.


Events after the reporting date

  • The Board of Directors appointed Victor Khmarin as Chairman of the Management Board, General Director of the Company;
  • PJSC RusHydro and PJSC Polyus have signed a bilateral power purchase agreement for clean electricity produced by Sayano-Shushenskaya HPP.


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


 


1 Includes employee benefit expenses, fuel expenses, third parties expenses, other materials and other costs.

2 Total net debt at the end of reporting period is calculated as the difference between financial debt and cash & cash equivalents (including bank deposits maturing in one year). Financial debt includes current debt, non-current debt (excluding interest payable), non-deliverable forward contract and cross-currency and interest rate swap.

3 Operating profit is calculated as the difference between revenue, other operating profit and operating expenses.

4 EBITDA is calculated as operating profit/loss excluding depreciation of property, plant and equipment, amortization of intangible assets, impairment of property, plant and equipment, impairment of financial assets, profit / loss on disposal of property, plant and equipment and other non-cash items of operating income and expenses.

4 The Boguchanskaya hydropower plant is part of the Boguchanskiy Energy and Metals Complex (BEMO), a joint venture (JV) between RusHydro and UC RUSAL, and is not part of RusHydro Group. According to RusHydro’s shareholding in the JV (50%), the results of the plant are reported in the official financial statements in “Share of results of associates and jointly controlled entities”. Operations of the HPP have been put into the press-release for general reference

5 Excluding JSC MEK and Primorskaya GRES. The Boguchanskaya hydropower plant is part of the Boguchanskiy Energy and Metals Complex (BEMO), a joint venture (JV) between RusHydro and UC RUSAL, and is not part of RusHydro Group. According to RusHydro’s shareholding in the JV (50%), the results of the plant are reported in the official financial statements in “Share of results of associates and jointly controlled entities”. Operations of the HPP have been put into the press-release for general reference

6 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 2017 to the basic level  of RUB 4.00 / kWh, from 1 January 2018 to RUB 4.30 / kWh, from 1 January 2019 to RUB 4.69 / kWh, from 1 January 2020 to RUB 5 / kWh. According to the Resolution of the Russian Government No. 1614-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. Within the amounts defined by Resolution No. 1615-r of the Russian Government dated 28 July 2017, 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 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

7 includes grid company services and technical connections to grids

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