Inter RAO YEES PAO : PJSC Inter RAO Announces RAS Financial Results for the First Nine Months of 2015

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

Income statement

* - 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 PJSC Inter RAO for the first nine months of 2015 was 35.6 billion rubles, up 14.0 billion rubles (64.8%) from the first nine months of 2014.

Revenue from electricity export was 25.3 billion rubles, up 12.9 billion rubles (103.6%) from the first nine months of 2014. This increase in export revenue primarily stems from the change in ruble sales prices reflecting a significant hike of currency exchange rates in the first nine 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 Belarus (79.0%), Finland (48.0%), and Ukraine (by a factor of 50.8). Revenue from electricity and capacity sales on WECM in the first nine months of 2015 was 6.9 billion rubles, up 0.1 billion rubles (1.3%) 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 nine months of 2015 was 3.4 billion rubles. The 1.0 billion ruble (43.0%) increase in other revenue is associated with scheduled shipments of power generation equipment for export and appreciation of US dollar against ruble.

Cost of goods sold in the first nine months of 2015 was 26.2 billion rubles, up 8.5 billion rubles (47.7%) from the same period of 2014. This change was driven by several factors partially offsetting one another, including 9.0 billion ruble (69.6%) increase in cost of electricity and capacity purchased at WECM due to larger export and higher transit flows across WECM pricing zones; 1.4 billion ruble (52.7%) decrease in cost of electricity imported due to lower commercial imports; and 0.8 billion ruble (38.7%) increase in cost of other sales.

Gross profit for the first nine months of 2015 was 9.4 billion rubles compared to 3.9 billion rubles in the same period of the previous year.

Selling costs for the first nine months of 2015 were 3.2 billion rubles, up 1.3 billion rubles (68.6%) from the first nine 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 nine months of 2015 were 3.8 billion rubles, up 0.8 billion rubles (28.1%) from the first nine months of 2014. This increase was primarily driven by changes in future cost allowances (regular inclusion in cost structure throughout the year), growing expenses for non-state pension provision 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 nine months of 2015 was 2.3 billion rubles compared to sales loss of 1.0 billion rubles for the same period of the previous year.

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

Interest receivable was 4.3 billion rubles. Interest income increased by 1.1 billion rubles (33.2%) 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 nine months of 2015 was 0.3 billion, down 1.5 billion rubles compared to the same period of 2014. This change is primarily associated with the receipt of income in 2014 in connection with one-time tax recomputation.

As the result, net profit for the first nine months of 2015 was 6.8 billion rubles compared to 4.0 billion rubles for the first nine months of 2014.

Balance sheet

Total assets of PJSC Inter RAO as of September 30, 2015 increased by 8.7 billion rubles (2.5%) to 362.1 billion rubles over a period of nine months. This increase in total assets is primarily attributable to current assets.

Current assets increased by 9.0 billion rubles (15.6%) in the first nine months of 2015 to 66.6 billion rubles as of September 30, 2015. This increase is associated with several factors partially offsetting one another, including the increase in short-term financial investments by 22.7 billion rubles to 33.2 billion rubles (by a factor of 3.2 or 216.7%), the reduction of cash and cash equivalents by 10.3 billion rubles (44.6%) to 12.8 billion rubles, the reduction of short-term accounts receivable by 3.4 billion rubles (14.4%) to 20.0 billion rubles reflecting the decrease in current accounts receivable and the use of prepayment to pay for equipment supply under contractual obligations.

Non-current assets changed marginally from the beginning of the year to 295.5 billion rubles.

Total debt increased in the first nine months of 2015 by 4.7 billion rubles (51.6%) to 13.9 billion rubles as we took a short-term ruble loan and also due to greater exchange rate differences when revaluating the currency loan. Our debt portfolio consists entirely of short-term loans and borrowings. Net debt of PJSC Inter RAO as of September 30, 2015 was 12.2 billion rubles.

Total debt excluding loans and borrowings decreased by 2.7 billion rubles (20.1%) from the beginning of the year to 10.8 billion rubles as of September 30, 2015. This change is mostly attributable to the reduction of prepayments for power generation equipment sales to Venezuela.

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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