IR Releases

Financial result

Revenues

For the 6 months 2018 the Group’s revenues from sales and services were RUB 54,646 mln, 9,6% higher than for the same period of 2017.

Revenues from electricity transmission services

Growth of revenues from electricity transmission services for the 9 months 2018 compared with the 9 months 2017 caused by the growth of the tariffs in 2018 and inclusion of the volume of a useful transfer of consumers on the former zone of activity of  SPbVS JSC.

Revenues from technological connection services

Decrease of revenues from technological connection services for the 9 months 2018 compared with the 9 months 2017 by 17,4% caused by completion of works and issue acts of technological accession in the 9 months 2017upon readiness of the power accepting devices of applicants according to obligations, which were completed by Lenenergo PJSC in the 4^th quarter 2016 within the program of completion of accrued liabilities.

At the same time for 9 months 2018 obligations under the current contracts were completed according to scheduled terms of their completion.

Other revenues

Decrease of other revenues for the 9 months 2018 compared with the 9 months 2017 caused by decrease of the volume of installation work and design services.

Operating expenses

The Group’s operating expenses in the reporting period totaled RUB 42,653 mln, which is 3,2% higher than for the 9 months 2017. 

RUB mln, unless otherwise stated

	9M 2018	9M 2017	Изменение
Total	42 653	41 339	3,2%
Transmission fee	13 706	12 469	9,9%
Depreciation of fixed and fictitious assets	9 192	9 765	(5,9%)
Electric energy for compensation of process losses	6 911	6 795	1,7%
Employee benefit expenses	5 686	5 361	6,1%
Taxes other than income tax	1 189	1 121	6,1%
Repairs and maintenance	1 012	1 321	(23,4%)
Other material expenses	773	244	>100%
Reserves	586	261	>100%
Rent	462	328	40,9%
Production, maintenance and delivery services	459	257	78,6%
Impairment of receivables (Advances paid)	336	(19)	-
Purchased electric energy and heat for own requirements	302	300	0,7%
Internal security	220	192	14,6%
Software and maintenance expenses	194	223	(13,0%)
Consulting, legal and audit services	175	101	73,3%
Other services	169	712	(76,3%)
Impairment of receivables (Trade IR)	101	330	(69,4%)
Allowance/(allowance recovery) for depreciation of distributed stocks	(22)	3	-
Other operating expenses	1 203	1 577	(23,7%)

Comments on basic expenses items:

Transmission fee

Growth of expenses on electricity transmission by 9,9% is associated with growth of average rates on electricity transmission for the 9 months 2018.

Electric energy for compensation of process losses 

Growth of expenses by 1,7% is associated with growth of average rates on loss compensation for the 9 months 2018.

Repairs and maintenance

Decrease of expenses by 23,4% is caused by the increase of in-house maintenance part and the decrease of the third-party contractors services part for the 9 months 2018.

Consulting, legal and audit services

Growth of expenses by 73,3% is caused by the growth of expenses for organization services of functioning and development of UES, which are rendered to Lenenergo PJSC by Rosseti parent company.

Other material expenses

Growth of expenses by 216,8% is mostly connected with с reclassification of material expenses for full in-house maintenance from «Repairs and maintenance» expenses item to the current item.

Rent

Growth of rent expenses by 40,9% is connected with the rent of additional areas for personnel under realization of transfer of operational services and personnel PEN JSC and SPbVS JSC to Lenenergo PJSC.

Financial result

The Group’s operating expenses for the 9 months 2018 totaled RUB 12,875 mln, which is 34,0% higher than for the 9 months 2017.

Following the results for the 9 months 2018 the Group’s net profit was RUB 9,041 mln, which is 34,4% higher than in the same period of 2017. The positive dynamics of fiscal effect was influenced by growth of revenues from electricity transmission by 13,9%.

EBITDA

EBITDA for the 9 months 2018 totaled RUB 22,066 mln, which is RUB 2,692 mln or 13,9% higher than in the same period of 2017. The growth of EBITDA was influenced mostly by growth of Group’s operating profit (excluding amortization) progress of balance of financial income and expenses in comparison with the same period of 2017.

RUB mln, unless otherwise stated

EBITDA	22 066
Pre-tax earnings	11 355
Amortization of fixed and intangible assets	9 191
Financial expenses	(421)
Financial profit	1 941

Assets

As of 30.09.2018 the assets of Lenenergo PJSC were RUB 197,675 mln, which is 14,7% lower than the indicator in the end of 2017. Major change of assets is connected with revaluation of fixed assets. In the 1^st half 2018 the Group carried out estimation of fixed assets cost within profitable approach using a discounted cash flow method. 

The expenses from estimation of fixed assets cost reflected on cost decrease of the Group’s fixed and on the cost decrease of preformed stock in «Assets» category in the financial results report. The estimation of fixed assets didn’t affect the cash flow and net profit in the accounting period.

Credit portfolio and debt position

Credit portfolio (the Company’s short-term credits and loans for the end of the reporting period) was RUB 30,878 mln, which is 16,4% lower the same indicator for the beginning of the year. The sum of a principal debt decreased by RUB 6,000 mln, interest debt decreased by RUB 47,000 mln in comparison with the beginning of the year.

The decrease of the sum of a principal debt in comparison with the beginning of the year is caused by paying off previous loans. The interest debt decreased because of coupon profit pay-off on exchange bonds of BO-05 series, and also because of credit portfolio optimization and minimization of debt expenses in the form of refunding loans with higher rate of interest by loans with lower rate of interest what happened to be in 9 months 2018.

For the 9 months 2018 Net debt totaled RUB 26,133 mln, which 22,0% lower than in  the beginning of the year. The decrease of net debt was caused by decrease of credit portfolio and also because of cash flow from operating activities.

As of 30.09.2018 Net debt/EBITDA indicator was 0,93х against 1,32х in the end of 2017. Indicator’s dynamic is induced by decrease of net debt and growth of EBITDA, brought to annual level