30 Mar 2012 14:05
March 30th, 2012
RusHydro Increases FY2011 Adjusted Net Profit Under RAS by 11%
JSC RusHydro (ticker symbol:MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces its unconsolidated financial results for the full year ended December 31, 2011, under Russian accounting standards (RAS) [1].
2011 RAS financials highlights (in RUR mn):
| 2011 | 2010 | Change |
Revenue | 92,504 | 88,979 | 4% |
Operating expenses | (44,016) | (45,516) | - 3% |
Gross profit | 48,489 | 43,464 | 11% |
Other income | 23,805 | 88,806 | - 73% |
Other expenses | (32,219) | (85,537) | - 62% |
EBITDA [2] | 57,557 | 51,608 | 11% |
Net profit | 30,622 | 37 817 | - 19% |
Net profit (adjusted) [3] | 36,502 | 33 015 | 11% |
In 2011, total revenue increased by 4% to RUR 92,504 mn. The major factors affecting the revenue were:
- increase of electricity generation;
- increase of electricity sales on the day-ahead market in accordance with the electricity market liberalization that finalized in 2011;
- higher electricity prices on the day-ahead market;
- decrease of revenue from capacity sales as a result of scaling down of investment component in capacity prices last year, as well as introduction of tariff regulation for hydropower plants in Siberia instead of capacity auctions prices as of 2011.
The dominant share of revenue comes from sales of electricity and capacity, as represented in the table below
(in RUR mn):
2011 | 2010 | Change | |
Electricity sales | 53,646 | 40,630 | 32% |
Capacity sales | 38,490 | 48,042 | -20% |
Heat sales | 129 | 129 | - |
Other sales | 239 | 178 | 34% |
Total revenue | 92,504 | 88,979 | 4% |
The operating costs in 2011 decreased by 3% to RUR 44,016 mn, as represented in the table below (in RUR mn):
2011 | 2010 | Change | |
Purchases of electricity and capacity | 9,150 | 14,776 | -38% |
Depreciation | 9,068 | 8,144 | 11% |
Labor costs | 6,956 | 5,362 | 30% |
Property tax | 4,747 | 5,104 | -7% |
Maintenance and repairs costs | 3,403 | 2,957 | 15% |
Costs related to the functioning of the power market | 2,293 | 1,950 | 18% |
Leasing of equipment | 1,367 | 1,538 | -11% |
Insurance expenses | 1,327 | 1,063 | 25% |
Security expenses | 1,139 | 713 | 60% |
Services to third parties | 877 | 748 | 17% |
Water utilization tax | 779 | 702 | 11% |
IT, legal and consulting expenses | 629 | 475 | 32% |
Rent payments | 508 | 503 | 1% |
Other expenses | 1,773 | 1,481 | 20% |
Total operating expenses | 44,016 | 45,516 | -3% |
The major factor of change was the decrease in electricity and capacity purchases as a result of:
- decrease of regulated electricity sales following the liberalization of the power market, which coupled with
higher electricity generation also resulted in lower power purchases;
- decrease of bilateral unregulated electricity sales in 2011, which incurred large power purchases in 2010;
- decrease of capacity purchases by Sayano-Shushenskaya hydropower plant following its gradual restoration.
As a result, the annual gross profit grew by 11% to RUR 48,489 mn as compared to 2010.
Other income in 2011 stood at RUR 23,805 mn, other expenses RUR 32,218 mn. The major part of other income and expenses are represented by income and expenses related to novation of subsidiaries' debt in the form of promissory notes in the amount of RUR 17,880 mn.
Other expenses were most affected by losses due to mark-to-market revaluation of financial investments (RUR 5,138 mn). In particular, losses from the mark-to-market revaluation of Inter RAO shares accounted for RUR 4,838 mn.
EBITDA rose 11% to RUR 57,557 mn.
Net profit decreased by 19% to RUR 30,622 mn. The main reason behind net profit decrease was a decline of market value of financial assets held by RusHydro against the backdrop of negative situation on the financial markets.
Net profit adjusted for non-cash items rose by 11% to RUR 36,502 mn.
Key indicators of RusHydro's financial position as of December 31, 2011
Total assets as of December 31, 2011, increased by RUR 108,969 mn or 20% as compared to December 31, 2010, to RUR 660,292 mn. Increase in assets is primarily attributed to:
- growth in long-term accounts receivable by RUR 33,829 mn as a result of restructuring of subsidiaries' debt in the form of promissory notes and providing of loans;
- booking of 5 dams (dams of Bratskaya, Ust'-Ilimskaya and Irkutskaya hydropower plants) valued at RUR 7,561 mn that were received from the Russian state as payment for shares of additional issue;
- RUR 25,649 mn deposited in banks (for no longer than 3 months) during 2011.
Total obligations as at December 31, 2011, stood at RUR 124,816 mn as compared to RUR 46,549 mn in December 31, 2010. The growth is attributed primarily to RUR 32,980 mn due for payment to acquirers of RusHydro's shares of additional issue. The loan portfolio increased by 86% to RUR 69,206 mn, long-term borrowings accounted for 96% of the portfolio.
The Company's equity in 2011 increased by 6% to 535,402 mn as compared to RUR 504,693 mn as at the end of 2010, which is explained by an increase in undistributed profit of RUR 26,404 mn.
The full text of the audited report (in Russian language only) is available on the corporate website:
http://rushydro.ru/investors/disclosure/reports/finreports2/2011
[3]Net profit adjusted for mark-to-market revaluation of listed equity stakes, reserves for impairment of financial investments, assets and potentially uncollectible accounts receivable.
For more information:
JSC RusHydro, Investor Relations Department
Tel. +7 (495) 225-3232 ext. 1319, 1394, 1607
ir@rushydro.ru
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.