IR Releases

24.05.2019

PJSC Lenenergo released its financial statements for the 1st quarter of 2019 prepared in accordance with IFRS

Main results of the reporting period

mln rub, unless otherwise specified

Name

of the indicator

3 months of

2019

3 months of

2018

Change

 

Financial indicators

 

 

 

Revenue

21,177

19,452

8.9%

Operating expenses

(14,958)

(16,048)

(6.8%)

Operating profit

6,562

3,568

83.9%

Net profit

4,920

2,622

87.6%

EBITDA

9,513

6,848

38.9%

EBITDA Margin

44.9%

35.2%

9.7 p.p.

Operating indicators

 

 

 

Installed capacity, MVA

32,384

31,192

3.8%

Connected capacity, MW

107

138

(22.3%)

Productive supply, mln kWh

8,481

8,418

0.7%

Losses in grids of Lenenergo,

mln kWh

1,289

1,469

(12.3%)

Notes:
EBITDA was calculated by the formula: pre-tax profit + depreciation of fixed assets and intangible assets + financial expenses - financial income.

The indicator of the connected capacity is specified taking into account generation (permanent technological connection).

"The Company's profit for the 1st quarter of 2019 amounted to 4.9 bln rub, which is 1.8 times higher than the financial result for the same period of last year – mainly due to the growth of revenue from electric power transmission. The financial position of the Company is stable, the level of profitability has increased, Net debt/EBITDA ratio (for 4 quarters) is at a comfortable level of 0.8 x".

- Polinov Aleksey Aleksandrovich,

Deputy General Director

of Economy and Finance of Lenenergo PJSC

Explanations for financial results

Revenue of Lenenergo Group PJSC totaled 21,177 mln rub, among them:

Revenue from electric power transmission services amounted to 20,317 mln rub, which is 12.0% (2,180 mln rub) higher than the same indicator of the previous period, due to an increase in tariff rates and consumption volumes in 2019.

Revenue from technological connection services amounted to 744 mln rub, which is 28.3% (294 mln rub) lower than the same indicator of the previous period due to the closure in the 1st quarter of 2018 of a major contract with Community and Business Complex Okhta СJSC.

Operating expenses of Lenenergo Group PJSC for the reporting period amounted to 14,958 mln rub, which is 6.8% lower than the same indicator of the previous period, including due to:

      Depreciation expense decreased by 10.0% due to the recognition as at June 30, 2018 of price reduction of the Group's fixed assets in the amount of 34,596 mln rub.

      Reduction of repair and maintenance costs by 59.8%, due to the lower volume of planned (completed) for the 1st quarter of 2019 repairs, compared to the 1st quarter of 2018.

      Cost reduction on the creation of provision for impairment of trade accounts receivable by 61.5%, which is mainly due to a decrease in the 1st quarter of 2019 in the volume of doubtful accounts receivable requiring creation of the provision.

      Reduction of short-term lease expenses by 88.1% due to the introduction of the new IFRS 16 "Leases" since January 1, 2019 and reclassification of expenses under significant lease agreements to financial expenses.

Operating profit of Lenenergo Group PJSC for the reporting period amounted to 6,562 mln rub, which is 83.9% higher than the same indicator of the previous period, including due to a decrease in operating expenses by 6.8%.

The net profit of Lenenergo Group PJSC for the reporting period amounted to 4,920 mln rub, which is 87.7% higher than the same indicator of the previous period, including due to:

      growth of revenue from electric power transmission by 12.0%;

      reduction of operating expenses by 6.8%.

EBITDA of Lenenergo Group PJSC for the reporting period amounted to 9,513 mln rub, which is 38.9% higher than the same indicator of the previous period due to the growth of gross profit from the provision of electric power transmission services.

EBITDA of Lenenergo Group PJSC amounted to 44.9%, which is 9.7 p.p. higher than the dame indicator of the previous period. Growth of the indicator was due to increase in operating profit by 83.9%.

Main balance sheet items

mln rub, unless otherwise specified

Name

of the indicator

March 31, 2019

December 31, 2018

Change

Assets

 

 

 

Non-current assets

193,354

190,433

1.5%

Current assets

20,506

15,390

33.2%

Total assets

213,860

205,823

3.9%

Net assets

134,871

129,960

3.8%

Return on equity (ROE)

9.6%

8.1%

1.5 p.p.

 

Equity and liabilities

 

 

 

Long-term liabilities

45,995

42,436

8.4%

Short-term liabilities

32,994

33,426

(1.3%)

Total liabilities

78,989

75,862

4.1%

Net debt

24,560

28,180

(12.9%)

Net debt/EBITDA

0.80

1.00

-

Notes:
Net debt was calculated according to the formula: long-term and short-term credits and loans with interest payable - cash and cash equivalents - short-term financial investments
ROE was calculated according to the formula: (Net income (for 4 quarters)/Equity)*100
Change in the Group's short-term and long-term liabilities in the 1st quarter of 2019 was due to the application of the new standard IFRS 16 "Leases" since January 1, 2019, in connection with which the lease debt in the amount of 2.2 bln rub was reflected in the items "Credits and loans".

As at March 31, 2019, the assets of Lenenergo Group PJSC amounted to 213,860 mln rub, which is 3.9% higher than the same indicator at the end of 2018. Change in assets is related to the implementation of investment program by the Group and the receipt of a positive financial result for the reporting period.

Return on equity (ROE) of the Group was 9.6%, which is 1.5 p.p. higher than the same indicator of the previous period. Growth of the indicator is due to an increase in net profit.

Amount of the net debt of Lenenergo Group PJSC for the first 3 months of 2019 amounted to 24,560 mln rub, which is 12.9% lower than at the beginning of the year. The decrease in net debt was due to the growth of the cash balance.

As at March 31, 2019, Net debt/EBITDA ratio of Lenenergo Group PJSC amounted to 0.80 against 1.00 as at the end of 2018. Dynamics of the indicator is due to a significant decrease in the net debt of the Group during simultaneous increase in EBITDA.