03.03.2014
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RusHydro announces full year 2013 RAS results

JSC RusHydro (MOEX, LSE: HYDR; OTCQX: RSHYY) announces its non-consolidated financial results under Russian accounting standards (RAS) for the full year ended December 31, 2013.


Key highlights:

  • 4Q 2013 revenue – RUB 27.8 bn (+7%); for 2013 – RUB 108.8 bn (+15%);
  • 4Q 2013 operating expenses – RUB 17.1 bn (+14%); for 2013 – RUB 58.9 bn (+5%);
  • 4Q 2013 EBITDA – RUB 13.7 bn (-1%), FY2013 EBITDA – RUB 61.8 bn (+26%);
  • EBITDA margin in 4Q – 49.4% (-3.9 p.p.), for 2013 – 56.8% (+4.8 p.p.);
  • Net profit for 2013 – RUB 35.3 bn (+140%), adjusted 2013 net profit – RUB 40.8 bn (+40%).

Key financials for the 4Q and FY 2012/2013 under RAS (in RUB mn)[i]

2013

2012

chg

4Q’13

4Q’12

chg

Revenue

108,794

94,207

15%

27,785

25,931

7%

Operating expenses

(58,873)

(55,987)

5%

(17,075)

(14,926)

14%

Operating profit

49,921

38,220

31%

10,710

11,005

-3%

EBITDA[ii]

61,774

49,030

26%

13,718

13,817

-1%

Net profit

35,321

14,702

140%

-

-

-

Net profit (adj.)[iii]

40,870

29,215

40%

8,246

6,731

23%

Revenue (in RUB mn)

In 2013, revenue increased by 15% to RUB 108,794 mn as compared to RUB 94,207 mn for 2012. The underlying factors behind the change in revenue were:

  • increase in electricity generation by RusHydro’s hydropower plants by 17% as compared to 2012;
  • increase in electricity sales volumes and prices on the “day-ahead” market;
  • increase in capacity prices of the competitive capacity auctions (KOM) for the hydropower plants of the first price zone;
  • indexation of regulated electricity and capacity tariffs;
  • increase in volumes and tariffs of regulated electricity and capacity sales;
  • decrease in capacity tariff of the Sayano-Shushenskaya HPP in the 2nd half of 2013.

Revenue breakdown (RUB mn)

2013

2012

chg

4Q’13

4Q’12

chg

Electricity sales

78,975

65,553

20%

19,847

17,741

12%

Capacity sales

29,251

28,155

4%

7,797

8,037

-3%

Sales from rent

245

200

23%

58

50

16%

Heat sales

141

141

0%

47

54

-13%

Other sales

182

158

15%

36

49

-26%

TOTAL

108,794

94,207

15%

27,785

25,931

7%

Operating expenses

Operating expenses increased by 5% to RUB 58,873 mn as compared to 2012.

Operating expenses breakdown (in RUB mn)

2013

2012

chg

4Q’13

4Q’12

chg

Purchased power

16,696

16,489

1%

4,842

3,526

37%

Depreciation

11,853

10,810

10%

3,008

2,812

7%

Labor expenses

6,112

6,003

2%

2,220

2,052

8%

Property tax

5,922

5,246

13%

1,775

1,333

33%

Repairs & maintenance

3,308

3,515

-6%

1,220

1,086

12%

Services of System Operator, ATS, CFS

2,672

2,425

10%

693

640

8%

Other third-party services

1,863

1,646

13%

621

588

6%

Security expenses

1,434

1,311

9%

366

342

7%

Insurance expenses

1,328

1,505

-12%

494

350

41%

Other taxes and fees

1,254

1,169

7%

360

332

8%

Leasing expenses

1,097

1,298

-15%

263

303

-13%

Rent expenses

1,038

797

30%

277

318

-13%

Water tax

967

817

18%

231

227

2%

Other

3,329

2,956

13%

705

1 017

-31%

TOTAL

58,873

55,987

5%

17,075

14,926

14%

Major factors of change in operating expenses were:

  • decrease in electricity purchases on the “day-ahead” and balancing markets, including power purchase for the fulfillment of regulated and unregulated sales;
  • increase in expenses for property tax and depreciation as a result of commissioning of new equipment;
  • decrease in repair and maintenance expenses due to shorter outages of the equipment under repair; decrease in works implemented by contracting parties.

Profit

As a result, operating profit for the reporting period increased by 31% as compared to previous year and amounted to RUB 49,921 mn.

EBITDA increased by 26% to RUB 61,774 mn.


RusHydro's net profit for the reporting period increased by 140% to RUB 35,321 mn. Net profit adjusted for non-cash items was RUB 40,870 mn, a 40% increase as compared to the previous year.


The adjusted net profit reflects a provision for mark-to-market revaluation of listed equity stakes in the amount of RUB 3,119 mn, of which shares of Inter RAO UES account for RUB 3,050 mn; as well as accrued reserves in the amount of RUB 2,430 mn.


RusHydro's financial position

The Company's total assets increased by RUB 62,427 mn as of December 31, 2013, or 8% against the similar figure as of December 31, 2012, reaching RUB 816,206 mn.


The growth in assets in 2013 was mainly a result of

  • obtainment of stakes of electric power companies in total amount of RUB 18,596 mn as payment for RusHydro’s shares of additional issue, including stakes of JSC Irkutsk electronetwork company in the amount of RUB 8,543 mn, JSC Ust’-Srednekanskaya HPP in the amount of RUB 5,193 mn; JSC RAO Energy Systems of East in the amount of RUB 2,965 mn, JSC Sakhalin energy company in the amount of RUB 1,824 mn and JSC Irkutskenergo in the amount of RUB 71 mn;
  • long-term loans given to the Company’s subsidiaries and affiliates aimed to refinance their liabilities as well as to finance the projects.

The growth in assets in terms of fixed assets is related to implementation of the Company’s investment program.


As of December 31, 2013, total obligations stood at RUB 191,786 mn compared with RUB 161,005 mn as of the beginning of the reporting period. The increase was attributed primarily to placement of RUB 20 bn of domestic bonds in February, 2013, as well as drawing up the loan facility from Sberbank of Russia in the amount of RUB 10,613 mn in December 2013, in order to refinance outstanding debt of RAO ES of East Group’s subsidiaries. The Company's debt portfolio rose by 9% to RUB 102,891 mn starting from the beginning of the year; long-term loans make up 95% of the total debt portfolio.


The Company's equity for 2013 increased by 5% to RUB 624,343 mn against RUB 592,698 mn as of the beginning of the reporting year.


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


The Company plans to publish its consolidated results for 2013 under International financial reporting standards (IFRS) on March 20, 2014.


[i] The quarterly figures are not reported in the official financial statements under RAS, they have been calculated and put into the press release for reference

[ii] EBITDA calculated as gross profit before depreciation.

[iii] Net profit adjusted for the mark-to-market revaluation of listed equity stakes, reserves for financial investment impairment, assets and potentially uncollectible accounts receivable, contingencies This indicator is not reported in the official financial statements under RAS and has been calculated and put into the press release for 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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