18.01.2013
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RusHydro Group announces 9 months 2012 IFRS results

JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces its condensed consolidated interim financial information for the nine months of 2012 ended September 30, 2012 under International financial reporting standards (IFRS).


RusHydro Group's financial results for the nine months of 2011 include the results of a number of retail companies[i], which were accounted for until the disposal date – March 28th, 2011, when these companies were contributed to the share capital of OJSC INTER RAO UES in the course of the share issue of the latter.


9 months 2012 financial highlights (in RUR mn)


9M 2012

9M 2011

Change,%

Total revenue, including

215,061

285,232

-24.6

Revenue

208,438

279,471

-25.4

Government grants

6,623

5,761

15.0

Comparable revenue (less revenue of disposal group)

215,061

189,447

13.5

Total expenses

(193,519)

(237,038)

-18.4

Comparable expenses (less expenses of disposal group)

(193,519)

(149,869)

29.1

EBITDA[ii]

39,922

59,237

-32.6

Net (loss)/profit

(2,530)

34,792

-   

Net profit (adjusted) [iii]

13,828

35,553

-61.1

For the nine months of 2012 total revenue decreased by 24.6% from RUR 285,232 mn to RUR 215,061 mn. The Group's total expenses decreased by 18.4% to RUR 193,519 mn against RUR 237,038 mn in the same period of 2011. Reduction in the Group’s revenue and expenses as for the nine months of 2012 compared to the same period of previous year is connected with the disposal of retail companies in late March 2011.


Comparable revenue (excluding revenue of disposal group) increased by 13.5% from RUR 189,447 mn to RUR 215,061 mn. The change is associated with the following factors:

  • growth of electricity sales following the acquisition of LLC Energy Supply Company of Bashkortostan on September 12th, 2011, the financial results of which are included in the Group starting from the acquisition date;
  • decrease of capacity sales due to removal of the special investment component in tariffs of hydropower plants in 2012 and implementation of tariffs for hydropower plants of the 2nd pricing zone as from the 2nd quarter of 2011 instead of capacity auctions prices.

Comparable expenses (excluding expenses of the disposal group) rose by 29.1% from RUR 149,869 mn to RUR 193,519 mn. The growth can primarily be attributed to the following factors:

  • higher electricity purchases and power distribution expenses in the Group’s retail segment following the acquisition of LLC Energy Supply Company of Bashkortostan and increase in prices for purchased electricity in the 3rd quarter due to increase in unregulated electricity prices starting from the second half of the year;
  • higher fuel expenses for electricity and heat generation by power plants of RAO Energy System of East Group as a result of increased purchases of fuel oil and coal due to disruptions in gas supply together with increased volumes of electricity and heat generation;
  • accrual of impairment of accounts receivable of RAO Energy System of East for the nine months of 2012 as compared to reversal of impairment of accounts receivable in the same period of 2011.

In the reporting period, EBITDA decreased by 32.6% to RUR 39,922 mn compared to RUR 59,237 mn for the same period of the previous year. Decrease of EBITDA is related to a change in the Group's structure and removal of the special investment component in capacity prices in 2012.


For the nine months of 2012, the Group received a net loss of RUR 2,530 mn compared to RUR 34,792 mn of net profit in the same period of 2011. Net loss occurred due to the following non-cash operations:

  • loss from impairment of property, plant and equipment in the amount of RUR 7,002 mn in respect of additions related to cash-generating units impaired in previous periods;
  • accumulated revaluation loss on shares of OJSC INTER RAO UES in the amount of  
    RUR 7,169 mn recycled to the Income Statement due to significant and prolonged decline in their fair value;
  • accrual of impairment of accounts receivable in the amount of RUR 4,681 mn resulting from analysis of past due receivables and estimation of their collectability;
  • loss in the amount of RUR 3,189 mn from remeasurement of the net assets of OJSC DRSK, electricity distribution company in the Far East, classified as a discontinued operation to fair value less costs to sell.

Key indicators of RusHydro Group’s financial position as at September 30, 2012

As at September 30th, 2012, the Group's assets increased by RUR 30,214 mn to RUR 841,997 mn against the comparable figure as at December 31st, 2011. The increase in assets is primarily due to additions to the Group's fixed assets and construction in progress (mainly Sayano-Shushenskaya HPP and Zagorskaya GAES-2).


As at the end of the reporting period the Group's liabilities rose by RUR 29,321 mn since December 31st, 2011, to RUR 315,445 mn. The increase in the liabilities was mainly caused by new borrowings raised from JSC Sberbank of Russia, JSC Rosbank, UniCredit Bank Austria AG, JSC Bank of Moscow.


The condensed consolidated financial information of the Group is available on RusHydro’s web site: http://www.eng.rushydro.ru/investors/reports/.


The presentation of the results is available at: http://www.eng.rushydro.ru/investors/presentations/results_presentations/.




[i] JSC Altayenergosbyt, JSC Mosenergosbyt and its subsidiaries, JSC Saint Petersburg Sale Company and its subsidiaries, JSC Saratovenergo, JSC Tambov Energy Retail Company and JSC United Energy Retail Company.

[ii] EBITDA is calculated as operating profit before depreciation of PP&E and non-cash impairment charges.

[iii] Net profit is adjusted for the effects of impairment on the Group's fixed assets, available-for-sale financial assets, remeasurement of net assets of OJSC “DRSK” to fair value less cost to sell.

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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