Inter RAO – Electric Power Plants announces RAS financial results for the first 9 months of 2019

Inter RAO – Electric Power Plants announced financial results for the first nine months of 2019 prepared in accordance with the Russian Accounting Standards (RAS).

* In RUB billion, unless indicated otherwise. Relative deviation (in %) is calculated using accounting data (in thousand rubles) without regard to rounding

** 'Net debt' index is calculated as follows: 'Short-term loans and borrowings' plus 'Long-term loans and borrowings' less 'Cash on deposit accounts'

Operating results of the Company for the first nine months of 2019 are published on Inter RAO – Electric Power Plants website: http://www.irao-generation.ru/press/news/.

Income statement

Revenue of Inter RAO – Electric Power Plants for the first nine months of 2019 was 156.8 billion rubles, which is 12.8% (17.8 billion rubles) higher than in the same period of 2018.

Revenue from electricity sales increased by 7.2 % (4.8 billion rubles) as compared to the comparable period of 2018 and amounted to 71.5 billion rubles. Favorable market conditions and optimization of the live equipment resulted in a positive change in revenue, including:

• increase in the weighted average price of electricity sales by 6.9 %, which led to an increase in revenue by 4.5 billion rubles;

• increase in electricity sales by 0.3 % (198 million kWh) as compared to the previous year (revenue growth by 0.3 billion rubles).

Revenue from capacity sales for the first nine months of 2019 increased by 18.5% (10.6 billion rubles) as compared to the same period of the previous year and amounted to 67.6 billion rubles. One of the reasons is the increase in revenue from the sale of facilities' capacity under the CSA by 4.1 billion rubles (12.3%) due to an increase in the capacity sales price, which is mainly due to the use of "CSA 10/15 Delta" payment becoming due after 72 months of power delivery under the Capacity Supply Agreement by Urengoyskaya SDPP, South Ural SDPP-2 and Cherepetskaya SDPP.   

Moreover, the revenue growth was influenced by the sales of capacity from leased facilities of LLC Kaliningrad Generation supplying the capacity in the Kaliningrad region (power units of Mayakovskaya, Talakhovskaya and Pregolskaya TPPs).

Revenue from other sales for the reporting period was 17.6 billion rubles versus 15.1 billion rubles in the previous period; mainly due to the increase in revenue from selling of commodities and materials to outside organizations (by 2.5 billion rubles).

Production cost of the sold products and provided services for the first nine months of 2019 increased by 7.6% (8.1 billion rubles) as compared to the comparable period of the previous year and amounted to 115.3 billion rubles.

This change reflects the influence of the following partially offsetting key factors:

• Fuel costs growth was driven by the increased price of fuel equivalent (annual indexation of gas prices) used for power generation, as well as the increased output at LLC Kaliningrad Generation facilities and power plants of Inter RAO – Electric Power Plants, which was partially offset by optimized composition of the generating equipment in operation at the power plants of JSC Inter RAO – Electric Power Plants and the reduction of specific reference fuel consumption for the power generation.

• Growth of costs connected with leasing of property at Mayakovskaya, Talakhovskaya and Pregolskaya TPPs;

• Increase of expenses for purchase of commodities and materials for subsequent sales.

• The accrued property tax was reduced due to the introduction of changes into the Tax Code of the Russian Federation effective January 1, 2019.

Gross profit for the first nine months of 2019 was 41.5 billion rubles, which is 30.6 % (9.7 billion rubles) higher than in the same period of 2018.

Sales profit for the first nine months of 2019 increased to 39.7 billion rubles as compared to the same period of the previous year (growth by 31.8 % or 9.6 billion rubles).

Balance of other income and expenses at the end of the reporting period amounted to 6.1 billion rubles against 4.4 billion rubles as a result of the same period of 2018. The change in the balance is mainly due to an increase in the amount of interest receivable, primarily because of the Company's deposit portfolio growth.

Net profit for the first nine months of 2019 amounted to 36.4 billion rubles against 28.0 billion rubles in the same period of 2018.

Balance Sheet

Total assets of JSC Inter RAO – Electric Power Plants for the first nine months of 2019 increased by 10.0 % (33.8 billion rubles) and amounted to 373.3 billion rubles as of September 30, 2019.

Non-current assets for the reporting period decreased by 8.7 billion rubles (3.8%) and amounted to 218.8 billion rubles at the end of the reporting period due to the accrual of depreciation and the transfer of long-term debt to short-term debt because payment due dates were approaching.

Current assets for the first nine months of 2019 increased by 38.0 % (42.6 billion rubles) and amounted to 154.5 billion rubles. The growth of current assets is mainly connected with the increase in financial investments and cash equivalents by 37.5 billion rubles (48.3 %) in total, primarily caused by the completion of a program for new construction of CSA facilities.

Liabilities of JSC Inter RAO – Electric Power Plants as of September 30, 2019 decreased by 2.6 billion rubles (7.6 %) and amounted to 31.3 billion rubles, mainly due to the repayment of income tax debt.

Balance sheet of JSC Nizhnevartovskaya HPP as per the RAS

* in billion rubles, unless indicated otherwise. Relative deviation (in %) is calculated using accounting data (in thousand rubles) without regard to rounding

**Net debt is calculated as follows: Short-terms loans and borrowings plus Long-term loans and borrowings less Cash and cash equivalents less Cash on deposit accounts

Income statement

Revenue of JSC Nizhnevartovskaya HPP for the first nine months of 2019 increased by 1.0% as compared to the same period of 2018 and amounted to 13.6 billion rubles.

Revenue from electricity sales as compared to the first nine months of 2018 increased by 4.0 % and amounted to 8.9 billion rubles. The main growth factor was an increase in the weighted average sale price of electricity by 10.0 % (0.9 billion rubles) as a result of favorable market conditions, which was partially offset by a decrease in revenue by 0.5 billion rubles because of a 5.5% decrease in the electricity sales volume as a result of conducting repairs.

Revenue from capacity sales in the reporting period decreased by 4.2% as compared to the same period of the previous year and amounted to 4.4 billion rubles. The dynamics of the indicator is mainly due to the decrease in capacity sales volumes in the Non-regulated Electricity and Capacity Sale and Purchase Contract market in connection with conducting repairs.

Production cost of the sold products decreased by 1.8 % (0.2 billion rubles). The decrease is mainly due to a 2.5% reduction in gas costs due to a decrease in electricity generation volumes.

Gross profit for the first nine months of 2019 increased by 12.2% (0.3 billion rubles) as compared to the same period of the previous year and amounted to 3.0 billion rubles.

Sales profit for the first nine months of 2019 amounted to 2.6 billion rubles, while the sales profit for the same period of the previous year was 2.2 billion rubles.

Net profit of JSC Nizhnevartovskaya HPP at the end of the reporting period amounted to 2.6 billion rubles. Net profit for the same period of the previous year was 1.8 billion rubles.

Balance Sheet

Total assets of JSC Nizhnevartovskaya HPP increased by 11.7% (2.8 billion rubles) and amounted to 27.1 billion rubles as of September 30, 2019.

Non-current assets for the reporting period changed insignificantly and amounted to 19.6 billion rubles as of September 30, 2019.

Current assets for the reporting period increased by 60.1% (2.8 billion rubles) to 7.5 billion rubles, mainly due to an increase in cash and cash equivalents.

Total liabilities increased by 6.4% (0.2 billion rubles) and amounted to 3.5 billion rubles as of September 30, 2019.