IR Releases
Lenenergo released its financial statements for 1Q2017 prepared in accordance with IFRS
For 1Q2017, revenue of PJSC Lenenergo grew by 17.39% to RUB 15,025 mln. EBITDA was up 21.0% to RUB 5,850 mln. Net profit for the reporting period amounted to RUB 2,374 mln (1Q2016: RUB 1,959 mln).
|
RUB mln, unless otherwise stated | |||
|
Indicator |
1Q2017 |
1Q2016 |
Change |
|
Financial results |
|
|
|
|
Sales revenue, including: |
15,025 |
12,799 |
17.39% |
|
- from electricity transmission services |
12,674 |
11,457 |
10.62% |
|
- from technological connection services |
1,750 |
567 |
208.64% |
|
- from other activity |
601 |
775 |
(22.45%) |
|
Operating expenses |
12,404 |
10,280 |
20.66% |
|
Operating profit |
2,620 |
2,519 |
4.01% |
|
Net profit |
2,374 |
1,959 |
21.18% |
|
Net profit margin |
15.80% |
15.31% |
0.49,p.p. |
|
EBITDA |
5,850 |
4,835 |
21% |
|
EBITDA margin |
38.94% |
37.78% |
1.16,p.p. |
|
Investments |
|
|
|
|
Capex |
2,857 |
955 |
199.16% |
|
|
31.03.2017 |
31.12.2016 |
Change |
|
Indicators of the financial position statement |
|
|
|
|
Assets |
231,851 |
235,173 |
(1.41%) |
|
Equity |
150,702 |
148,341 |
1.59% |
|
Return on equity (ROE) |
1.58% |
5.19% |
3.61,p.p. |
|
Liabilities |
81,149 |
86,832 |
(6.54%) |
|
Credit portfolio and debt position |
|
|
|
|
Loans and credits |
32,919 |
34,528 |
(4.66%) |
|
Net debt |
23,695 |
24,091 |
(1.64%) |
Note:
EBITDA is calculated as profit before tax + depreciation of property, plant and equipment and amortization of intangible assets + finance expenses - finance income.
Net debt is calculated as long-term and short-term borrowings - cash and cash equivalents - short-term investments.
Revenue and financial result
Group’s revenue
Sales revenue following 1Q2017 was RUB 15,025 mln, which is 17.39% higher than for 1Q2016 (RUB 12,799 mln).
· Growth of revenue from electricity transmission services for 1Q2017 against 1Q2016 is explained by the increase in tariff rates in 2017 against the year 2016.
· Growth of revenue from technological connection services for 1Q2017 y-o-y (1Q2016) is explained by performance of the obligations to the applicants; such obligations include the works performed by PJSC Lenenergo at the end of 2016, but the close of such obligations under the contract and issuance of technological connection reports were carried out upon the applicant’s readiness in 1Q2017.
· Fall in revenue from other activity for 1Q2017 y-o-y (1Q2016) by 22.45% was due to the fall in incomes on compensation contracts by 82.56%
Group’s operating expenses
Operating expenses of the Group for the reporting period were RUB 12,404 mln, which is 21% higher than the similar indicator for 3M2016.
|
|
1Q2017 |
1Q2016 |
Change |
|
Total operating expenses |
12,404 |
10,280 |
21% |
|
Electricity transportation expenses |
4,476 |
4,245 |
5% |
|
Property, plant and equipment depreciation |
3,123 |
1,652 |
89% |
|
Payroll and payroll taxes |
1,834 |
1,611 |
14% |
|
Provision / (provision reversal) for receivables impairment and write-off |
872 |
153 |
469% |
|
Taxes, except profit tax |
476 |
369 |
29% |
|
Repairs and maintenance |
284 |
127 |
125% |
|
Public utility services |
125 |
155 |
(19%) |
|
Raw materials and supplies |
113 |
109 |
4% |
|
Intangible assets depreciation |
107 |
664 |
(84%) |
|
Lease payment |
96 |
116 |
(18%) |
|
Services of commercial electricity metering |
88 |
74 |
18% |
|
Provisions for court proceedings and claims |
70 |
319 |
(78%) |
|
Expenses for private security service |
64 |
56 |
14% |
|
Telecommunication and information services |
59 |
29 |
102% |
|
Social sphere expenses |
45 |
49 |
(8%) |
|
Consulting, legal and audit services |
32 |
31 |
4% |
|
Agency services |
24 |
30 |
(19%) |
|
Reversal of impairment / (Impairment) of intangible assets |
- |
- |
0% |
|
Reversal of impairment / (Impairment) of property, plant and equipment |
- |
- |
0% |
|
Provision /(reversal of provision) for impairment of inventories |
(5) |
76 |
(107%) |
|
Other operating expenses |
523 |
416 |
26% |
Comments concerning the dynamics of the most essential cost items:
· Depreciation of property, plant and equipment
Growth of costs for property, plant and equipment depreciation by 89.0% was due to the increase in their book value as a result of the property, plant and equipment commissioning in 2016 in the amount of RUB 20,643 mln.
· Payroll and payroll taxes
Labor remuneration expenses growth by 14% resulted from the increase in the staffing of the Group’s production personnel.
· Depreciation of intangible assets
Fall in costs for the intangible assets depreciation by 84.0% was due to the decrease in the depreciation of intangible assets “Income-bearing contracts”, which were recognized in the consolidated statements regarding such companies as JSC SPb ES and JSC PES at the time of their acquisition. The major part of the income-bearing contracts was depreciated in 2016.
· Provision / (provision reversal) for receivables impairment and write-off
Growth of expenses for the creation of the provision for impairment of receivables by 469% is mainly explained by the creation of the provision for receivable in respect of technological connection contracts.
· Provisions for court proceedings and claims
Fall in expenses for court proceedings and claims by 78% is due to the reversal of the earlier created provision for the settled litigations in favor of the Group.
Group’s operating profit
Operating profit of the Group for 1Q2017 was RUB 2,620 mln, + 4.01% y-o-y (1Q2016).
Group’s net profit
Following 1Q2017, the Group received the net profit totaling RUB 2,374 mln (1Q2016: RUB 1,959 mln). The positive dynamics of the 1Q2017 financial result, besides the increase in the revenue for electricity transportation net of technological losses by 10.62%, was materially influenced by the growth of technological connection revenue by RUB 1,183 mln (208.64%).
EBITDA
EBITDA for 1Q2017 was RUB 5,850 mln, +21.0 % y-o-y (1Q2016: RUB 4,835 mln).
Calculation of EBITDA, RUB mln
|
EBITDA |
5,850 |
|
Profit before tax |
1,975 |
|
Property, plant and equipment, and intangible assets depreciation |
3,230 |
|
Financial incomes |
(204) |
|
Financial expenses |
849 |
EBITDA margin for 1Q2017 grew by 1.16 percentage points and totaled 38.94%. The indicator dynamics is explained by higher rates of the Group’s revenue growth against EBITDA growth.
Credit portfolio and debt position
Credit portfolio - short-term and long-term credits and loans - as at the end of the reporting period was RUB 32,919 mln, - 4.66% against the similar indicator as at the end of 2016. The debt fall was due to the early repayment of credits stipulating high interest rates in order to optimize the credit portfolio.
Net debt following 1Q2017 was RUB 23,695 mln, -1,64% against the similar indicator as at the end of 2016. The net debt reduction was due to the credit portfolio optimization.
Investments
Capex amount in 1Q2017 was RUB 2,857 mln, +199.16% y-o-y (1Q2016: RUB 955 mln).
