RusHydro announces half-yearly 2013 IFRS results
RusHydro Group (Group, ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces its condensed consolidated interim unaudited financial information for the first half of 2013 under International Financial Reporting Standards (IFRS).
Key highlights for the 1st half of 2013:
1H 2013/2012 financial highlights (in RUB mn)[i]
In the 2nd quarter of 2013, total electricity generation by power plants of JSC RusHydro, its subsidiaries and the Boguchanskaya hydropower plant (HPP)[v] amounted to 34,630 GWh, a 17% increase as compared to the 2nd quarter of 2012; total power generation in the 1st half of 2013 amounted to 66,633 GWh (+16%). In the 2nd quarter of 2013, hydropower plants of JSC RusHydro, its subsidiaries and the Boguchanskaya HPP increased electricity generation by 23% to 28,005 GWh, generation in the 1st half of 2013 amounted to 50,303 GWh (+25%).
The underlying factors of the RusHydro Group production change were:
Furthermore, in the end of 2012 the first units of Boguchanskaya hydropower plant were launched into commercial operation.
In the 1st half of 2013, average electricity selling price on the “day-ahead” market, a key segment of wholesale electricity market, in the 1st price zone amounted to RUB 1,036/MWh (+10% compared to the same period of 2012), in the 2nd price zone electricity price was RUB 731/MWh (+15% as compared to the same period of 2012). In the 2nd quarter of 2013, the average electricity selling price on the “day-ahead” market in the 1st price zone amounted to RUB 1,026/MWh (+13%), in the 2nd price zone – RUB 721/MWh (+13%). According to the Market Council, a significant increase in prices on the “day-ahead” in 1st pricing zone in 2013 as compared to 2012 was due to increase in gas tariffs starting from June 1, 2012, the main fuel for thermal plants in the European zone of Russia; in the 2nd price zone – due to a combination of factors, including price increase in bids of certain power stations, decrease in volumes of spinning reserve of thermal plants load as well as decrease in volumes of price-taking supply in generator’s bids in excess of technological minimum.
Events in the 1st half of 2013
As a result of pre-emptive right execution JSC RusHydro’s ownership of JSC RAO ES of East voting shares increased to 76.72%; in JSC Sakhalin energy company – to 44.64%; in JSC Ust’-Srednekanskaya HPP – to 100%; in JSC Irkutsk electronetwork company – to 42.53%.
During the pre-emptive right period JSC RusHydro placed 66,995,185,198 additional shares at RUB 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 half of 2013/2012 (in RUB mn)
In the 1st half of 2013, total revenue of the Group increased by 7.1% to RUB 161,869 mn. The change is associated with the following factors:
In the 1st half of 2013, the share of “Generation” segment in total revenue was ca. 30%, “Retailing” – ca. 25%, RAO ES of East Group – ca. 43%, other segments – around 2%[vi].
Operating expenses in 1H 2013/2012 (in RUB mn)
Total operating expenses increased by 1.6% from RUB 132,622 mn to RUB 134,712 mn.
Major factors affecting expenses:
In the reporting period, EBITDA increased by 22.8% to RUB 38,720 mn compared to RUB 31,529 mn for the same period of previous year. EBITDA growth is related to increase in electricity output by hydropower plants, growth in prices on the free market, decrease in fuel and electricity and capacity purchase expenses.
In the 1st half of 2013, the Group’s net profit amounted to RUB 10,818 mn compared to net loss of RUB 436 mn in the same period last year. Adjusted net profit in the 1st half of 2013 amounted to RUB 23,001 mn, a 38.0% increase as compared to the same period of the previous year. The difference between the reported and adjusted profit is attributed mainly to the following non-cash effects (before the income tax):
Key indicators of RusHydro Group’s financial position
As of June 30th, 2012, the Group's assets increased by RUB 40,390 mn to RUB 894,657 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, investments in associates and joint ventures after receiving 42.53% of shares of JSC Irkutsk electronetwork company and shares of JSC Sakhalin energy company as payment for JSC RusHydro’s shares of additional issue, and other operating assets due to increase in deposits from funds received from bonds placement in the amount of RUB 20 bn.
As at the end of the reporting period the Group's liabilities rose by RUB 43,376 mn from December 31st, 2012, to RUB 357,238 mn. The increase in the liabilities was mainly a result of funds raised through bonds placement in the amount of RUB 20 bn and increase in accounts payable for placed shares of additional issue.
Events after the reporting date
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/
[i] Here and henceforth the company includes quarterly figures that are not reported in the official financial statements, they have been calculated and put into the press release for reference.
[ii] EBIT is calculated as total revenue less operating expenses.
[iii] EBITDA is calculated as EBIT before depreciation and amortisation and non-cash charges
[iv] Net profit is adjusted for the effects of impairment of the Group's available-for-sale financial assets, accounts receivable, promissory notes, property, plant and equipment, investments in associates, property, plant and equipment of joint ventures, loss on disposal of property, plant and equipment, loss from remeasurement of the net assets of OJSC DRSK, classified as a discontinued operation to fair value less costs to sell, gain from cancellation of pension plan of Far East Generation Company.
[v] The Boguchanskaya hydropower plant is part of the Boguchanskiy Energy and Metals Complex (BEMA), 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 joint ventures”.
[vi] Revenue from segments is calculated under RAS excluding revenue from intersegment transactions.
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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