27 Apr 2011 12:58
April 27th, 2011
RusHydro Group Announces Full Year 2010 IFRS results
RusHydro Group (ticker symbol: LSE, RTS, MICEX: HYDR; OTCQX: RSHYY) announces its audited consolidated financial results for the year ended December 31, 2010, prepared in accordance with International Financial Reporting Standards (IFRS).
2010 Financial Highlights (RUR mln)
2010 | 2009 | Change, % | |
Revenue | 418,003 | 338,460 | 23.5 |
Operating expenses | (367,782) | (297,784) | 23.5 |
Impairment of PPE[1] | (24,293) | - | - |
Operating profit | 25,928 | 40,676 | -36.3 |
Adjusted operating profit[2] | 50,221 | 40,676 | 23.5 |
EBITDA[3] | 61,575 | 52,951 | 16.3 |
Net profit | 11,330 | 32,112 | -64.7 |
Adjusted net profit[4] | 35,887 | 32,112 | 11.8 |
In the first half of 2010, RusHydro Group acquired electricity retail companies from OJSC RAO Energy System of East Group and OJSC Lenenergo. These companies were accounted for using predecessor values method and retrospectively presented in all periods reported[5].
The Group's revenue for the full year increased by 23.5% and totaled RUR 418,003 mln against RUR 338,460 mln in 2009.
The main factors of revenue growth were:
§ increase in share of sales at unregulated prices according to the liberalization schedule for the wholesale market for electricity and capacity;
§ increase in unregulated electricity prices on the day-ahead market;
§ increase in volume of electricity sales on the retail market (retail segment).
The largest share of the Group's revenue is represented by revenue from sales of electricity and capacity (RUR mln):
2010 | 2009 | Change, % | |
Sales of electricity | 365,103 | 287,241 | 27.1 |
Sales of capacity | 44,994 | 45,617 | -1.4 |
Other revenue | 7,906 | 5,602 | 41.1 |
Other revenue includes revenue from construction, repairs and other services.
Operating expenses in 2010 were up 23.5% to RUR 367,782 mln.
The largest share of the Group's operating expenses is represented by purchase of electricity and capacity as well as expenses for electricity distribution (retailing segment) (RUR mln):
2010 | 2009 | Change, % | |
Purchase of electricity and capacity | 182,760 | 144,776 | 26.2 |
Expenses for electricity distribution | 125,043 | 102,321 | 22.2 |
Group's operating profit for the reporting year was RUR 25,928 mln, compared to RUR 40,676 mln the previous year. The decrease in operating profit was driven by impairment loss on the Group's property, plant and equipment1 in the amount of RUR 24,293 mln booked in 2010. Adjusted for the effects of impairment of Group's property, plant and equipment operating profit was RUR 50,221 mln, up by 23.5%.
EBITDA for the year increased by 16.3% and totaled RUR 61,575 mln.
The Group's net profit was RUR 11,330 mln against RUR 32,112 mln in 2009. Net profit adjusted for the effects of impairment of the Group's property, plant and equipment and property, plant and equipment of jointly controlled entities affecting comparability increased 11.8% to RUR 35.887 year-on-year.
Key indicators of the Group financial position as at 31 December 2010
As at 31 December 2010 the Group's non-current assets increased to RUR 529,352 mln against RUR 408,209 mln as at 31 December 2009.
The increase was driven primarily by:
§ increase in property, plant and equipment mainly due to significant additions and revaluation of property, plant and equipment;
§ increase in investments in associates.
The Group's equity totaled RUR 518,112 mln and RUR 405,800 mln as at 31 December 2010 and 31 December 2009 respectively.
The increase was driven primarily by:
§ revaluation of property, plant and equipment;
§ registration of additional share issue with respective increase in the share capital.
The Group's total liabilities as at 31 December 2010 were RUR 132,892 mln against RUR 101,066 mln as at 31 December 2009.
The increase was driven primarily by:
§ placement of bonds issue;
§ increase in deferred tax liabilities in relation to revaluation of plant, property and equipment.
Subsequent events
Additional share issue. On 29 March 2011 the additional share issue of up to 1,860,000,000 ordinary shares was completed. 1,607,271,577 ordinary shares, representing 86.41% of the total additional share issue were placed, including 931,677,018 ordinary shares acquired by the Russian Federation, represented by the Federal Agency for State Property Management, for a consideration of RUR 1,500 mln. The Report on the share issue was registered with the FSFM on 21 April 2011.
Forthcoming additional share issue. According to the Resolution of the Russian Government dated 28 December 2010, a 40% interest in OJSC Irkutskenergo owned by the Government was contributed to the share capital of OJSC INTER RAO UES. Subsequently, this interest in OJSC Irkutskenergo will be contributed to the share capital of the Company in the course of the forthcoming additional share issue. According to the Resolution of the Russian Government dated 29 December 2010, an asset complex comprising five dams, currently being rented by OJSC Irkutskenergo under long-term lease contracts and shares of the following companies: OJSC Kolimaenergo, OJSC Geotherm, OJSC Boguchanskaya HPP, OJSC Zaramag HS, OJSC Ust'-Srednekanskaya HPP, OJSC Kamchatskiy Gazoenergetichecky Complex, OJSC Pavlodolskaya HPP, OJSC Trest Gidromontazh, will be contributed to the share capital of the Company in the course of the forthcoming additional share issue.
Acquisitions. On 4 March 2011 the Group's subsidiary OJSC HydroInvest acquired an additional 456,270 shares of OJSC Krasnoyarskaya HPP, which comprises 0.11% interest of the company's share capital. Following the transaction, the Group's interest in the share capital of OJSC Krasnoyarskaya HPP reached 25.12%.
On 5 March 2011 the Group's subsidiary OJSC HydroInvest acquired a 25% plus 1 share interest in OJSC Bureyagesstroy from OJSC Interregional Distribution Grid Companies Holding. The consideration was determined by an independent appraiser and amounted to RUR 200 mln.
On 24 March 2011 the Group's subsidiary OJSC HydroInvest acquired a 90% interest in CJSC International Energy Corporation (IEC), the main asset of which is the Sevan-Hrazdan hydroelectric system in the Republic of Armenia. The consideration was determined by an independent appraiser and amounted to RUR 170 mln.
Contribution to the additional share issue of OJSC INTER RAO UES. The Company's Board of Directors and Management Board approved the share exchange transaction with OJSC INTER RAO UES for 494,532,591,150 shares in the course of additional share issue of OJSC INTER RAO UES. On 28 March 2011 the Group contributed the equity investments classified as non-current assets held for sale and disposal group to the share capital of OJSC INTER RAO UES. As a result the Group received 471,103,569,902 shares of OJSC INTER RAO UES. The remaining part of shares is planned to be received later in 2011 upon the completion of the additional share issue.
Bond issue. On 25 April 2011 the Company completed the placement of documentary non-convertible ten-year interest bearing bonds series 01 with the nominal amount of RUR 10 bln and series 02 with the nominal amount of RUR 5 bln. Redemption period is five years, coupon rate is 8%. The funds raised from the offer will be used for the investing activity of the Company and for the partial refinancing of bonds redeemable in June 2011.
The Consolidated Financial Statements for the year 2010 are available at Company's web-site: http://www.eng.rushydro.ru/investors/reports/finreports/iasfinrep
[1] The Group analysed the current economic situation and indicators of impairment of property, plant and equipment. Due to the deterioration in expectations for the achievable sales prices and volumes in the new market conditions, for a number of cash-generating units (mainly located in the Far East region) an additional impairment loss was recognised in the amount of RUR 24,293 mln as at 31 December 2010.
[2] Operating profit was adjusted for the effects of impairment of the Group's property, plant and equipment
[3] EBITDA calculated as operating profit less depreciation and impairment of PPE.
[4] Net profit was adjusted for the effects of impairment of the Group's property, plant and equipment and property, plant and equipment of jointly controlled entities
[5] The following entities were acquired from OJSC RAO Energy System of East Group and OJSC Lenenergo for a cash consideration of RUR 7,832 mln and RUR 468 mln respectively and were accounted for using predecessor values and retrospectively presented in all periods reported: OJSC Mosenergosbyt, OJSC Saint-Petersburg Sale Company, OJSC Altayenergosbyt, OJSC Tambov Energy Retailing Company, OJSC Saratovenergo and OJSC United Energy Retailing Company. These companies are included in the list of assets which, in accordance with the decisions of the Russian Government, are to be contributed in the course of additional share issue of OJSC INTER RAO UES. The Group has classified the following equity investments as non-current assets held for sale and disposal groups. In March 2011 these assets were transferred to OJSC INTER RAO UES.
DISCLAIMER
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. One can identify forward-looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements.
We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia and rapid technological and market changes in our industries, as well as many other risks specifically related to RusHydro and its operations.