PAO Inter RAO today announced financial results prepared to the Russian Accounting Standards (RAS) for the first six months of 2015.

Income statement

Indicator *

First six months of 2015

First six months of 2014

Change, %

Revenue

25.0

14.7

70.3

Cost of goods sold

18.6

12.2

53.4

Gross profit

6.4

2.5

151.6

Sales profit/(loss)

1.4

-0.9

-

Net profit

3.8

2.1

78.0

Balance Sheet

June 30, 2015

December 31, 2014

Change, %

Total assets

358.6

353.4

1.5

Total equity

334.5

330.8

1.1

Loans and borrowings

12.1

9.2

31.4

Net debt **

-9.8

-20.1

-51.1

* Billion rubles unless indicated otherwise. Percentage change (%) is calculated using accounting data in thousand rubles.

** Short-term loans and borrowings plus Long-term loans and borrowings less Cash and cash equivalents less Short-term financial investments (cash in bank accounts)

Income statement

Revenue of PAO Inter RAO for the first six months of 2015 was 25.0 billion rubles, up 10.3 billion rubles (70.3%) from the first six months of 2014.

Revenue from electricity export was 17.1 billion rubles, up 8.8 billion rubles (106.4%) from the first six months of 2014. This increase in export revenue primarily reflects the change in ruble sales prices reflecting a significant hike of currency exchange rates in the first six months of 2015 compared to the same period of the previous year, and also larger sales volumes due to favorable market conditions and the shortage of electricity in the Unified Energy Systems of Ukraine. The strongest increases in electricity exports by volume are attributable to Finland (93.5%), Belarus (23.1%), Lithuania (10.6%) and Ukraine (by a factor of 70.9). Revenue from electricity and capacity sales on WECM in the first six months of 2015 was 5.0 billion rubles, up 1.0 billion rubles (24.0%) year-on-year. This increase reflects larger transit flows across WECM pricing zones and higher net electricity sales price in the balancing market.

Revenue from other sales in the first six months of 2015 was 2.9 billion rubles. The 0.5 billion ruble (23.1%) increase in other revenue is associated with scheduled shipments of gas turbine units to Venezuela.

Cost of goods sold in the first six months of 2015 was 18.6 billion rubles, up 6.5 billion rubles (53.4%) from the same period of 2014. This change was driven by several factors partially offsetting one another, including 6.9 billion ruble (83.1%) increase in cost of electricity and capacity purchased at WECM due to larger export and higher transit flows across WECM pricing zones; 0.9 billion ruble (51.7%) decrease in cost of electricity imported due to lower commercial imports; and 0.4 billion ruble (19.9%) increase in cost of other sales.

Gross profit for the first six months of 2015 was 6.4 billion rubles compared to 2.5 billion rubles in the same period of the previous year.

Selling costs for the first six months of 2015 were 2.2 billion rubles, up 0.9 billion rubles (68.0%) from the first six months of 2014. Higher cost of infrastructure services due to larger export volume was the primary driver of this change.

Administrative expenses for the first six months of 2015 were 2.8 billion rubles, up 0.7 billion rubles (31.7%) from the first six months of 2014. This increase was primarily driven by the adoption of the new Compensation Policy, changes in future cost allowances, and larger ruble costs associated with agreements with liabilities denominated in foreign currency due to appreciation of US dollar and euro against ruble.

Sales profit for the first six months of 2015 was 1.4 billion rubles compared to sales loss of (0.9) billion rubles for the same period of the previous year.

Income from share ownership in other companies were 1.7 billion rubles, up 0.1 billion rubles year-on-year, reflecting larger dividend payments from Group subsidiaries.

Interest receivable was 2.6 billion rubles. Interest income increased by 0.6 billion rubles (31.1%) year-on-year due to higher interest rates on bank accounts and larger overall balance of loans extended to Group subsidiaries.

Balance of other income/(expenses) for the first six months of 2015 was (1.0) billion rubles compared to (0.05) billion rubles for the same period of 2014. This change is primarily associated with restatement of assets denominated in foreign currencies.

As the result, net profit for the first six months of 2015 was 3.8 billion rubles compared to 2.1 billion rubles for the first six months of 2014.

Balance sheet

Total assets of PAO Inter RAO as of June 30, 2015 increased by 5.1 billion rubles (1.5%) to 358.6 billion rubles. This increase in total assets is primarily attributable to current assets.

Current assets increased by 4.7 billion rubles (8.1%) in the first six months of 2015 to 62.3 billion rubles as of June 30, 2015. This increase is associated with several factors partially offsetting one another, including the increase in short-term financial investments by 22.4 billion rubles to 32.9 billion rubles (by a factor of 3.1 or 213.7%), the reduction of cash and cash equivalents by 12.2 billion rubles (52.7%) to 10.9 billion rubles, and the reduction of short-term accounts receivable by 5.4 billion rubles (23.1%) to 18.0 billion rubles reflecting the decrease in current accounts receivable.

Non-current assets changed marginally from the beginning of the year to 296.2 billion rubles.

Total debt increased in the first six months of 2015 by 2.9 billion rubles (31.4%) to 12.1 billion rubles as we took a short-term ruble loan. Our debt portfolio consists entirely of short-term loans and borrowings. Net debt of PAO Inter RAO as of June 30, 2015 was (9.8) billion rubles.

Total debt excluding loans and borrowings decreased by 1.4 billion rubles (10.6%) from the beginning of the year to 12.0 billion rubles as of June 30, 2015. This change is mostly attributable to the reduction of prepayments for power generation equipment sales to Venezuela.

* * *

Inter RAO Group is a diversified energy holding serving various segments of Russian and international electric power industry. The Group is the leading exporter and importer of electricity in Russia actively increasing electricity generation and sales, and developing new lines of business. The corporate strategy of Inter RAO is focused on making Inter RAO a global energy enterprise, a key player in the global energy market, and the leading Russian energy company by energy efficiency. Inter RAO Group owns and operates 35 GW of installed power generation capacity. www.interrao.ru


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