Inter RAO YEES PAO : PJSC Inter RAO Announces RAS Financial Results for the First Six Months of 2016

PJSC Inter RAO today announced financial results for the first six months of 2016 prepared to the Russian Accounting Standards (RAS).

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 six months of 2016 was 20.7 billion rubles, down 4.3 billion rubles (17.1%) from the first six months of 2015.

Revenue from electricity export was 14.9 billion rubles, down 2.2 billion rubles (12.9%) from the first six months of 2015. This change reflects several partially offsetting year-on-year changes in the sales volumes in the first six months of 2016, including increased sales to Finland (by 23.9%), Belarus (by 6.1%) and Georgia (by 56.1%), and reduced sales to Ukraine (by 96.0%) and Kazakhstan (by 26.2%). Revenue from WECM electricity and capacity sales for the first six months of 2016 was 4.8 billion rubles, down 0.2 billion rubles (4.3%) year-on-year. This change primarily reflects the reduction of transit flows between different WECM pricing zones in the first six months of 2016 compared to the same period of the previous year.

Cost of goods sold in the first six months of 2016 was 15.1 billion rubles, down 3.5 billion rubles (19.0%) year-on-year. This change reflects several partially offsetting factors, including a 0.7 billion ruble (86.0%) increase in the cost of electricity purchased due to larger export by volume, and a 2.5 billion ruble (16.5%) reduction in the cost of electricity and capacity purchased at WECM due to lower export by volume and smaller transit flows between different WECM pricing zones in the first six months of 2016 compared to the same period of the previous year.

Net income for the first six months of 2016 was 5.6 billion rubles compared to 6.4 billion rubles in the first six months of 2015.

Selling costs in the first six months of 2016 were 1.5 billion rubles, down 0.7 billion rubles (30.0%) year-on-year, The primary driver of this change was the lower cost of infrastructure services due to smaller electricity exports by volume.

General and administrative expenses for the first six months of 2016 were 2.6 billion rubles, down 0.2 billion rubles (8.7%) year-on-year. Sales profit for the first six months of 2016 was 1.6 billion rubles compared to 1.4 billion rubles for the same period of the previous year.

Income from share ownership in other companies reduced by 0.7 billion rubles (38.7%), to 1.0 billion rubles, reflecting smaller dividend payments from Group subsidiaries.

Interest receivable was 2.1 billion rubles. The 0.6 billion ruble (21.7%) reduction in the interest receivable compared to the first six months of 2015 primarily reflects lower instalment fees on the property sale agreements due to debt payout.

Balance of other income/expenses was 32.2 billion rubles compared to (0.9) billion rubles for the same period of 2015. The primary driver of this change was the sale of 40.007% ownership stake in PJSC Irkutsk Energy combined with the recognition of contingent liabilities on the joint and several guarantee of an option agreement with SC Vnesheconombank.

As the result, net profit for the first six months of 2016 was 36.3 billion rubles, compared to 3.8 billion rubles for the same period of 2015.

Balance sheet

Total assets of PJSC Inter RAO as of June 30, 2016, increased by 58.6 billion rubles (16.5%), to 413.3 billion rubles compared to December 31, 2015.

Non-current assets reduced by 4.9 billion rubles (1.6%) to 308.8 billion rubles over the year. This change primarily reflects the divestment of financial investment in the shares of PJSC Irkutsk Energy concurrent with долгосрочной части дебиторской задолженности согласно условиям договора купли-продажи (оплата пакета акций будет произведена до 31 мая 2018 года).

Current assets increased by 63.5 billion rubles (154.9%) in the first six months of 2016, to 104.5 billion rubles as of June 30, 2016. This increase primarily reflects the proceeds from the sale of the shares of PJSC Irkutsk Energy, and the recognition of the current component of accounts receivable associated with this sale.

Loans and borrowings increased by 1.9 billion rubles (203.3%), to 2.9 billion rubles, over the first six months of 2016. This change is mostly associated with the taking of an intragroup short-term loan. Net debt of PJSC Inter RAO as of June 30, 2016 reduced to (68.3) billion rubles compared to (20.8) billion rubles in the beginning of the year.

Total debt (excluding loans and borrowings) increased by 22.2 billion rubles (114.9%) from the beginning of the year, to 41.6 billion rubles as of June 30, 2016. This change is mostly attributable to an increase in contingent liabilities on the joint and several guarantee extended to execute the option agreement with SC Vnesheconombank.

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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 Russia's leading electric utility by energy efficiency. Inter RAO Group owns and operates approximately 32.5 GW of installed power generation capacity. www.interrao.ru