IR Releases

25.10.2019

Rosseti Lenenergo (legal name - "Lenenergo" PJSC ), trading code on the Moscow Exchange: LSNG and LSNGP, published financial statements for the 9 months of 2019, prepared in accordance with RAS

Main results of the reporting period

mln rub, unless otherwise specified

Name

of the rates

9 months

2019

9 months

2018

Amendment

Financial rates

 

 

 

Revenue

58,463

53,741

8.8%

from electric power transmission

54,727

49,135

11.4%

from technological

connection

3,442

4,218

-18.4%

from other activities

294

387

-24.1%

Cost price

41,588

41,277

0.8%

Gross profit

16,875

12,464

35.4%

Net profit

9,963

9,184

8.5%

EBITDA

23,226

21,087

10.1%

EBITDA profitability

39.7

39.2

0.5 p.p.

Operating rates

Installed capacity, MVA

32,656 

31,543 

3.5%

Connected capacity, MW

518

563

-8%

Productive supply, mln kWh

22,537

22,300

1.1%

"Lenenergo" network losses , mln kWh

2,597

2,830

-8.2%

Notes:

EBITDA rate is shown after deduction of the reserve balances for devaluation of debt financial investments.
EBITDA = Profit before tax + Depreciation + Interest payable - Reserve balances for devaluation of debt financial investments.
Connected capacity rate is stated on the basis of constant technological connection (without generation). Data for 9 months of 2019 are preliminary.

"Profit of the Company by the results of the nine months of 2019 amounted to 9.96 bn rub, which is exceeding the financial result for the same period of the previous year. The main factor is the growth of the revenue from electric power transmission. Financial standing of the Company is consistently stable, level of profitability has increased, Net debt/EBITDA Ratio (for 4 quarters) has been decreased to 0.7х".

- Polinov Aleksey Aleksandrovich,
Deputy General Director 
of Economy and Finance of Rosseti Lenenergo

Explanations for operating results

A growth in the net supply of electricity for 9 months of 2019 by 1.1% relative to 9 months of 2018 is due to:

      an increase in electricity consumption in all consumer groups, including large industrial enterprises and the population in the Leningrad Region.

Loss reduction by 0.92 percentage points occurred due to the implementation of the program to reduce electricity losses, which includes measures to modernize the electricity accounting system, identify unaccounted and non-contractual electricity consumption.

Explanations for financial results

Revenue of "Rosseti Lenenergo" for 9 months of 2019 amounted to 58,463 million rubles, including:

Revenue for electricity transmission services for 9 months of 2019 amounted to 54,727 million rubles, which is 11.4% (5,592 million rubles) higher than the rate value for 9 months of 2018 due to increased electricity consumption and the return  of the accumulated lost income and tariff revenue transfer (smoothing) by regional regulators.

Revenue from technological connection services for the 9 months of 2019 amounted to 3,442 million rubles, which is 18.4% (777 million rubles) lower than the same indicator of the previous period. The decrease was due to the implementation of obligations for large applicants for 9 months of 2018, including the connection to the electric network of the "Lakhta Center" multifunctional complex.

Revenue from other activities for 9 months of 2019 amounted to 294 million rubles, which is 24.1% (93 million rubles) lower than the same period last year rate due to reduced maintenance of power grid equipment taking in consideration transfer of outdoor lighting objects "SPb power Network" JSC to SPb State Unitary Enterprise"Lensvet" for exchange agreement.

The price cost of the services provided by "Rosseti Lenenergo" for the reporting period amounted to 41,588 million rubles. and exceeded the value for 9 months of 2018 by 311 million rubles. (0.8%). The main reasons for the increase in the total price cost of production was an increase in depreciation, costs for services of "FGC UES" PJSC , for purchased energy to compensate for losses while reducing the cost of electricity transmission services of third-party territorial grid companies.

Net profit of "Rosseti Lenenergo" for reporting period amounted to 9,963 mln rub, which is 8.5% higher than that of the previous year.

EBITDA rate of "Rosseti Lenenergo" for the reporting period amounted to 23, 226 mln rub, which is 10,1% higher than the same rate of the previous period, mainly by the growth of the revenue from electric power transmission services.

Main balance sheet items

mln rub, unless otherwise specified

Name

of the rates

30.09.2019

December 31, 2018

Amendment

Assets

 

 

 

Fixed assets

203,201

198,386

2,4%

Current assets

21 373

16 334

30,8%

Total assets

224,574

214,720

4.6%

Net assets

148,326

139,702

6,2%

Return on equity (ROE)

7.5

7.4

0,1 p.p.

Equity and liabilities

 

 

 

          Equity and provisions

148,326

139,702

6,2%

Long-term liabilities

38 709

42,038

-7,9%

Current liabilities

37 539

32,980

13,8%

Total liabilities

76 248

75,018

1,6%

Net debt

20 033

29,016

-31,0%

Net debt/EBITDA for 4 quarters

0.7

1.1

-

Notes:

Net debt was calculated by the formula: long-term and short-term credits and loans taking into account interest arrears - cash and cash equivalents – short-term financial investments;
ROE was calculated by the formula: (Net profit (for 4 quarters)/Equity)*100 

As of September 30, 2019, the asset price of "Rosseti Lenenergo" amounted to 224, 574 mln rub, which is 4.6% higher than the same rate at the end of 2018. The change in assets is associated with the implementation of the investment program by the Company and the receipt of a positive financial result for the reporting period. The growth in net assets for 9 months of 2019 amounted to 8, 624 million rubles. (6.2%).

Return on equity (ROE) of "Rosseti Lenenergo" amounted to 7.5%, which is 0.10 percentage points. higher than in 2018. The improvement of the rate is associated with an increase in the Company's net profit (for 4 quarters).

The loan portfolio of "Rosseti Lenenergo" in the form of short-term and long-term credits and loans  of the company at the end of the reporting period amounted to 30 880 million rubles. Reduction of debt compared to the beginning of 2019 amounted to 3, 658 million rubles, including in the amount of the main debt - 3,597 million rubles. - credits repaid due to positive net cash flow from operating activities.

As of September 30, 2019, Net Debt / EBITDA (for 4 quarters) rate of "Rosseti Lenenergo" amounted to 0.7x versus 1.1x as of the end of 2018. The dynamics of the rate is due to a significant decrease in the Company's net debt for 6 months of 2019 with a simultaneous increase in EBITDA. 

Investments

mln rub, unless otherwise specified

Name

of the rates

9 months

2019

9 months

2018

Amendment

Utilization, mln rub, excluding VAT

14 180

10 175

39,4%

Input in fixed assets, mln rub

9 964

9 978

-0,01%

Input in capacity, MVA

426

389

9,5%

Input in capacity, km

962

1 029

-6,5%

Notes:

Actual rates for the 9 months of 2019 were generated on the basis of operational data. 

Amount of capital investments for the reporting period was 14, 180 mln rub, which is 39.4% higher than the indicator for the same period of 2018 (10, 175 mln rub). Amount of the input for the reporting period was 9, 964 mln rub, which is 0.01% lower than the indicator for the same period of 2018 (9, 978 mln rub).

Increase in indicators of utilization and input for the 9 months of 2019 in comparison with the indicators for the same period of 2018 is due to increase in the scope of liabilities under concluded contracts on technological connection.