Inter RAO YEES : PJSC Inter RAO Announces RAS Financial Results for the First 9 Months of 2016

PJSC Inter RAO today announced RAS (Russian Accounting Standards) financial results for the first 9 months of 2016.

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 9 months of 2016 was 33.1 billion rubles, down 2.5 billion rubles (7.0%) from the first 9 months of 2015.

Revenue from electricity export was 23.7 billion rubles, down 1.6 billion rubles (6.5%) from the first 9 months of 2015. This change reflects partially offsetting trends in sales volumes: while we increased our sales by volume to Finland (by 46.6%), Belarus (by 30.1%) and Georgia (by 47.0%), we saw a reduction in sales to Ukraine (by 95.9%) and Kazakhstan (by 25.3%). Revenue from WECM electricity and capacity sales for the first 9 months of 2016 was 7.0 billion rubles, up 0.1 billion rubles (1.7%) year-on-year. Revenue from other sales for the first 9 months of 2016 was 2.5 billion rubles. The 1.0 billion ruble (28.1%) decrease in the revenue from other sales reflects variations in the schedule of export deliveries of our energy equipment.

Cost of goods sold in the first 9 months of 2016 was 24.6 billion rubles, down 1.5 billion rubles (5.8%) year-on-year. This change reflects several partially offsetting factors, including a 1.1 billion ruble (88.0%) increase in the cost of imported electricity due to larger import by volume, and a 1.8 billion ruble (8.4%) 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. Cost of other sales was 2.1 billion rubles. The 0.8 billion ruble (26.6%) decrease in the cost of other sales reflects variations in the schedule of export deliveries of our energy equipment.

Gross profit for the first 9 months of 2016 was 8.5 billion rubles compared to 9.4 billion rubles for the first 9 months of 2015.

Selling costs for the first 9 months of 2016 were 2.4 billion rubles, down 0.8 billion rubles (25.0%) year-on-year. The primary driver of this change was the lower cost of infrastructure services due to lower electricity export by volume.

Administrative costs stayed virtually the same year-on-year, at 3.9 billion rubles. Sales profit for the first 9 months of 2016 was 2.2 billion rubles compared to 2.3 billion rubles a year before.

Income from share ownership in other companies reduced by 0.7 billion rubles, to 1.0 billion rubles, reflecting smaller dividends paid by Group subsidiaries.

Interest receivable stayed virtually the same year-on-year, at 4.1 billion rubles. Balance of other income/expenses was 31.1 billion rubles compared to 0.3 billion rubles in the same period of 2015. The primary driver of this change was the sale of the 40.007% ownership stake in PJSC Irkutsk Energy (as a part of the sale of the 40.29% interest in PJSC Irkutsk Energy by Inter RAO Group) combined with the recognition of contingent liabilities on the joint and several guarantee of an option agreement with SC Vnesheconombank.

As the result, net income for the first 9 months of 2016 was 37.4 billion rubles, compared to 6.8 billion rubles for the same period of 2015.

Balance sheet

Total assets of PJSC Inter RAO as of September 30, 2016, increased by 55.1 billion rubles (15.5%), to 409.8 billion rubles, from December 31, 2015.

Non-current assets reduced by 8.3 billion rubles (2.6%), to 305.4 billion rubles, from the beginning of the year. This change primarily reflects the divestment of financial investment in the shares of PJSC Irkutsk Energy with the recognition of the non-current portion of accounts receivable according to the provisions of the sale agreement.

Current assets increased by 63.4 billion rubles (154.8%) in the first 9 months of 2016, to 104.4 billion rubles as of September 30, 2016. This increase primarily reflects the proceeds from the sale of the shares of PJSC Irkutsk Energy, and the recognition of the current portion of accounts receivable associated with this sale.

Total debt increased by 1.0 billion rubles (101.3%) to 1.9 billion rubles in the first 9 months of 2016. The increase in total debt reflects the receipt of new disbursements under a long-term loan agreement signed in 2015 under the Project-Based Financing Investment Support Program enacted by the Order of the Government of Russia of 11 October 2014, No. 1044. Our debt portfolio consists entirely of long-term loans. Net debt of PJSC Inter RAO as of September 30, 2016 reduced to (71.2) billion rubles compared to (20.8) billion rubles in the beginning of the year.

Total debt (excluding loans and borrowings) increased by 18.7 billion rubles (96.6%) from the beginning of the year, to 38.0 billion rubles as of September 30, 2016. This change is mostly attributable to an increase in contingent liabilities on the joint and several guarantee on an intragroup loan extended to execute the option agreement with SC Vnesheconombank.

Link to the press release on operating results here

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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