Inter RAO YEES : PJSC Inter RAO Announces RAS Financial Results for the Full Year 2016

PJSC Inter RAO today announced RAS (Russian Accounting Standards) financial results for the full year 2016.

* 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 full year 2016 was 43.2 billion rubles, down 2.8 billion rubles (6.1%) from 2015.

Revenue from electricity export was 30.7 billion rubles, down 1.9 billion rubles (5.9%) from 2015. This change reflects partially offsetting trends in sales volumes: while we increased our sales by volume to Finland (by 56.1%) and Belarus (by 13.0%), and import from Kazakhstan (2.75x), we saw a reduction in sales to Ukraine (by 95.1%), Kazakhstan (by 24.5%) and Georgia (by 20.6%). Revenue from WECM electricity and capacity sales for the full year 2016 increased by 0.8 billion rubles (9.5%), to 9.7 billion rubles. Revenue from other sales for the full year 2016 was 2.8%, with the reduction of 1.7 billion rubles (37.9%) reflecting variations in the schedule of export deliveries of our energy equipment.

Cost of goods sold for the full year 2016 was 31.7 billion rubles, down 1.7 billion rubles (5.1%) year-on-year. This change reflects several partially offsetting factors, including a 1.7 billion ruble (110.9%) increase in the cost of imported electricity due to larger import by volume, and a 2.0 billion ruble (7.2%) reduction in the cost of electricity and capacity purchased at WECM due to lower export by volume. Cost of other sales was 2.3 billion rubles. The 1.4 billion ruble (37.9%) decrease in the cost of other sales reflects variations in the schedule of export deliveries of our energy equipment.

Gross profit for the full year 2016 was 11.5 billion rubles compared to 12.6 billion rubles for the full year 2015.

Selling costs were 3.2 billion rubles in 2016, down 0.9 billion rubles (22.6%) 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 5.7 billion rubles.

Sales profit for the full year 2016 was 2.6 billion rubles compared to 2.9 billion rubles for the full year 2015.

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 5.7 billion rubles. Balance of other income/(expenses) was 89.4 billion rubles compared to (3.8) billion rubles for 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), income from revaluation of listed and unlisted financial assets, and recognition of contingent liabilities on the joint and several guarantee of an option agreement with SC Vnesheconombank.

As the result, net income for the full year 2016 was 97.5 billion rubles, compared to 3.7 billion rubles for the full year 2015.

Excluding the revaluation of listed and unlisted financial investments, net income for the full year 2016 was 36.9 billion rubles, compared to net loss of (2.1) billion rubles for the full year 2015.

Balance sheet

Total assets of PJSC Inter RAO as of December 31, 2016, increased by 83.3 billion rubles (23.5%), to 437.9 billion rubles compared to December 31, 2015.

Non-current assets increased by 48.0 billion rubles (15.3%) to 361.7 billion rubles over the year. This change primarily reflects the revaluation of listed and unlisted financial investments, and 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 35.3 billion rubles (86.1%) in the full year 2016, to 76.3 billion rubles as of December 31, 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.

There was no debt as of December 31, 2016, due to early repayment of a long-term loan. Net debt of PJSC Inter RAO as of December 31, 2016 reduced to (41.7) billion rubles compared to (20.8) billion rubles in the beginning of the year.

Total debt (excluding loans and borrowings) reduced by 11.4 billion rubles (59.0%) from the beginning of the year to 7.9 billion rubles as of December 31, 2016. This change is mostly attributable to the execution of contingent liabilities on the joint and several guarantee on an intragroup loan extended to execute the option agreement with SC Vnesheconombank.