IR Releases

14.10.2011

JSC "Lenenergo" releases its financial statements for the 6 months ended June 30, 2011, prepared in accordance with IFRS.

On October 14, 2011 the Audit Committee of JSC "Lenenergo" on the in-person meeting considered and took note of the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2011, prepared in accordance with IFRS.

Key indicators of financial reporting of JSC "Lenenergo" (IFRS), RUR thousand

Indicator Unit 31.12.2010 30.06.2010 30.06.2011 ∆ %
1H 2011/ 1H 2010
Assets RUR thousand 93 382 344 90 862 519 88 761 036 -2%
Equity RUR thousand 49 960 983 47 800 871 45 479 412 -5%
Liabilities, including: RUR thousand 43 421 361 43 061 648 43 281 624 1%
- non-current liabilities RUR thousand 21 924 041 17 135 935 16 957 172 -1%
- current liabilities RUR thousand 21 497 320 25 925 713 26 324 452 2%
Revenues, including: RUR thousand 28 579 575 13 285 112 15 806 821 19%
- from electricity transmission RUR thousand 17 691 876 8 492 203 11 714 338 38%
- from technological connection RUR thousand 10 299 774 4 565 327 3 774 349 -17%
- other RUR thousand 581 925 227 582 318 133 40%
Operating expenses RUR thousand (21 440 791) (9 841 842) (16 394 887) 67%
Operating profit/loss RUR thousand 7 132 784 3 443 270 (588 066) -117%
Net profit/loss RUR thousand 4 750 421 2 587 589 (1 178 642) -146%
Profit/loss per ordinary share RUR 4,66 2,54 (1,16) -146%
For reference:
EBITDA RUR thousand 11 933 940 6 034 233 1 663 844 -72%
Profitability indicators
EBITDA margin, % % 41,8% 45,42% 10,53% -
Net profit margin, % % 16,6% 19,5% 7,5% -
Liquidity indicators
Urgent liquidity - 0,10 0,14 0,08 -
Current liquidity - 0,30 0,34 0,24 -

Revenues JSC "Lenenergo" Group of Companies in 1H 2011 amounted to RUR 15,806,821 thousand, that is 19% higher than the indicator of the same period of the last year.

Revenues from electricity transmission except regulatory technological losses in the amount of RUR 3,242,400 thousand (in 1H 2010 – RUR 2,785,495 thousand) constituted RUR 11,714,338 thousand.

The Group's revenues from electricity transmission in 1H 2011 increased as compared to 1H 2010 by RUR 3,222,135 thousand (38%) due to increasing in the transmission volumes and average tariffs in 1H 2011 as compared to 1H 2010 by 38%.

Revenues from technological connection in 1H 2011 decreased by RUR 790,978 thousand (17%) as compared to the same period in 2010, which is caused by the decrease in the volume (power) of connections due to the declining number of new property contracts and delay by claimants of technical terms under current property contracts.

Operating expenses of the Group during the reporting period amounted to RUR 16,394,887 thousand, which is 67% higher than the indicator of the same period of the last year. The main reasons for the growth in operating expenses in 1H 2011 were as follows: annual increase in tariffs for network organizations, the increase in electricity transmission, the recognition of an impairment loss of fixed assets, and indexation of wages.

As a result of activities in the 1st half of 2011 JSC "Lenenergo" Group of Companies received an operating loss of RUR 588,066 thousand. Net loss for the period amounted to RUR 1,178,642 thousand (in 1H 2010 the Group's net profit constituted RUR 2,587,589 thousand).

The main reason for the formation of a net loss in 1H 2011 became revaluation of fixed assets in the sum of RUR 2,961,229 (as at June 30, 2010 - nil), recognized as an impairment loss in the profit and loss statement for the 6 months ended June 30, 2011. The Group recognized decline in the fair value of fixed assets due to the limiting the growth of tariffs for electric power transmission by the Russian Government in 2011.

In 1H 2011 the main liquidity indicators of the Group reduced, which is caused by the upcoming redemption of bonds of the 2nd and 3rd issue (classified as short-term liabilities) in January and April 2012, respectively.

To enhance the financial condition of the Group, the management undertakes the following measures:

• shift from building new power supplies and other power equipment at the end of pre-existing projects;
• orientation of the tender for election of contractors for the preferential rate - the presence of innovative construction techniques that reduce construction time;
• improving performance by implementing programs to reduce technology costs for electricity transportation on own networks of the Group and operating expenses;
• introduction of improved procedures for financial planning, focused on the timely collection of accounts receivable, restructuring liabilities in order to extend the maturity;
• availability of funds to the most favorable terms;
• gradual transition from non-monetary to monetary payments for the service of technological connection the networks of the Group.

It is expected that these measures will ensure the flow of funds necessary for the normal functioning of JSC "Lenenergo".