RusHydro announces 1Q 2013 IFRS results
JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces its condensed consolidated interim unaudited financial statements for January-March of 2013 under International Financial Reporting Standards (IFRS).
1Q 2013/2012 financial highlights (in RUR mn)
In the 1st quarter of 2013, total electricity generation by power plants of RusHydro,its subsidiaries and Boguchanskaya hydropower plant 4 amounted to 31,962 GWh, a 15% increase as compared to the 1st quarter of 2012. In the reporting period hydropower plants of RusHydro, including Boguchanskaya hydropower plant, increased electricity generation by 27% as compared to the same period of 2012. In the 1st quarter of 2013, generating assets of RAO ES of East Group generated 9,657 GWh of electricity, a 4.8% decrease as compared to the 1st quarter of 2012. In the reporting period, heat output by thermal plants of RAO ES of the East Group decreased by 1% to 14,042 thousand GCal.
The underlying factors of the production change in 1st quarter of 2013 were:
In January-March 2013, average electricity selling price on the “day-ahead” market, a key segment of wholesale electricity market, in the 1st pricing zone amounted to RUR 1,051/MWh (a 6% increase as compared to the 1st quarter of 2012), in the 2nd pricing zone electricity price was RUR 744/MWh (a 17.7% increase as compared to the 1st quarter of 2012). According to the Market Council, a significant increase in prices on the “day-ahead” in Siberia in 2013 as compared to 2012 was due to planned and emergency outages of major fossil-fuel power stations, decrease in volumes of price-taking supply in generator’s bids in excess of technological minimum, price increase in bids of certain power stations.
Key events in January-March
During the pre-emptive right period RusHydro placed 66,995,185,198 additional shares at RUR 1 per share; 66,006,190,951 of shares were placed in favor of the Russian Federation and the rest in favor of other shareholders exercised their pre-emptive right.
Revenue breakdown for the 1st quarter of 2013/2012 (in RUR mn)
In the 1st quarter of 2013, total revenue of the Group increased by 3.7% to RUR 88,358 mn. The change is associated with the following factors:
In the 1st quarter of 2013, the share of “Generation” segment in total revenue was ca. 26%, “Retailing” – ca. 25%, «RAO ES of East Group» – ca. 47%, other segments – around 2% 5.
Operating expenses in 1Q 2013/2012 (in RUR mn)
Total operating expenses decreased by 1.4% from RUR 71,280 mn to RUR 70,270 mn. Non-manageable costs of the Group decreased by 1.8%, manageable costs decreased by 0.3%.
Major factors affecting expenses:
In the reporting period, EBITDA increased by almost 20% to RUR 23,122 mn compared to RUR 19,316 mn for the same period of previous year. EBITDA growth is related to increase in electricity output and growth in electricity prices on the “day-ahead” market and capacity prices.
In the 1st quarter of 2013, the Group received a net profit in the amount of RUR 10,698 mn compared to RUR 10,652 mn in the same period of previous year. Adjusted net profit in the 1st quarter of 2013 amounted to RUR 14,588 mn, a 32% increase as compared to the same period of the previous year. The difference between the reported and adjusted profit is attributed to:
Key indicators of RusHydro Group’s financial position
As of March 31st, 2012, the Group's assets increased by RUR 37,939 mn to RUR 892,686 mn against the comparable figure as at December 31st, 2012. The increase in assets is primarily attributable to additions to the Group's fixed assets, construction in progress, investments in associates and jointly controlled entities after receiving a number of assets as payment for shares of additional issue of RusHydro, as well as increase in deposits from funds received from bonds placement.
As at the end of the reporting period the Group's liabilities rose by RUR 36,160 mn from December 31st, 2012, to RUR 352,512 mn. The increase in the liabilities was mainly a result of funds raised through domestic bonds placement and increase in accounts payable for placed shares of additional issue.
Significant events after the reporting period
Evgeny Dod, Chairman of the Management of RusHydro, commented:
“The Group’s financial results in the 1st quarter of 2013 reflected favorable weather conditions, high storage levels and strong water inflows to major hydropower plants and beneficial pricing environment on the market, as well as management’s efforts in cost optimization and improvement of operational efficiency of the Group.
In 2012, we developed and launched a comprehensive cost control program, which already delivered its first results in 2012, but its effects will be even more visible this year. The cost optimization measures include: improvement in quality of maintenance works and enforcing shorter planned outages; decrease in works implemented by contracting parties in cases when enrolled personnel is available; lowering power consumption of generating facilities; rationing/decrease in expenses for transportation, telecommunications, security, banking, utility, audit, consulting, legal and information services; sale of inefficient non-core assets.
I am confident that in 2013 we will not only substantially increase revenue from our core businesses, but also will keep low operating costs. I think, we will manage to keep the growth of our operating expenses below inflation, despite the inevitable increase in the Company’s needs in the onset of challenging construction projects in the Far East and launch of new hydropower facilities”.
The consolidated financial statements of the Group are available at: http://www.eng.rushydro.ru/investors/reports/
The presentation of the results is available at: http://www.eng.rushydro.ru/investors/presentations/results_presentations/
The announcement of 2Q 2013 IFRS results is scheduled on August 29, 2013.
4 The Boguchanskaya HPP is part of the Boguchanskiy Energy and Metals Complex (BEMO), a 50/50 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.
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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