Inter RAO YEES : PJSC Inter RAO Announces RAS Financial Results for the First Nine Months of 2018

25 October 2018

PJSC Inter RAO announced financial results for the first nine months of 2018 prepared according to the Russian Accounting Standards (RAS).

Indicator*	9 months of 2018	9 months of 2017	+/-
Revenue	35,2	31,5	11,6%
Production cost	24,3	25,4	-4,2%
Gross profit	10,8	6,1	77,4%
Sales Profit	4,7	0,1	By a factor of 47,8
Net profit	12,8	5,4	By a factor of 2,4
As of September 30, 2018	As of December 31, 2017
Total assets	497,8	468,1	6,4%
Total equity	429,5	430,3	-0,2%
Loans and borrowings	58,4	28,9	102,3%
Net liabilities **	-66,2	-50,1	32,0%

* in billion rubles unless otherwise stated. Relative deviation (%) 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 2018 amounts to 35.2 billion rubles, up 3.6 billion rubles (6.1%) as compared to the first nine months of 2017.

Power export revenues amount to 24.7 billion rubles, up 3,5 billion rubles (16,7%) from the first nine months of 2017. This change is primarily attributed to an increase in the ruble equivalent of the sale price related to growth of euro exchange rate and the price on power market Nord Pool in 'Lithuania' and 'Finland' zones. At the same time, the impact of the supply volume in physical indicators was multidirectional: an increase in supplies to Finland (28,7%), Azerbaijan (27,8%), Lithuania (23.3%), Kazakhstan (9.2%) with a simultaneous decrease in supplies to Belarus (98.5%), Georgia (39,8%), etc. Revenue from WECM electricity and capacity sales for the first nine months of 2018 was 10.3 billion rubles, up 0.3 billion rubles (3.3%). This change is related to an increase in electricity import from Kazakhstan over a nine-month period оf 2018.

Production cost for the first nine months of 2018 was 24.3 billion rubles, which is 1.1 billion rubles (4.2%) lower than in the same period of 2017. The change in production cost reflects several multidirectional factors, including a 0.8 billion rubles (4.1%) decrease in the cost of electricity purchased domestically due to the decrease in electricity export mainly to Belarus, a reduction in other cost of sales by 0.3 billion rubles (98.7%) due to absence of the supply of energy equipment for export.

Gross profit for the first nine months of 2018 was 10.8 billion rubles compared to 6.1 billion rubles in the same period of 2017.

Selling costs for the first nine months of 2018 were 1.8 billion rubles, down 0.5 billion rubles (21.1%) year-on-year. The primary driver of this change was the lower cost of infrastructure services ensuing from decreased electricity exports to Georgia and Belarus.

Administrative expenses increased by 0.6 billion rubles (14.9%) compared to 2017 and amounted to 4.2 billion rubles. The increase was mainly influenced by the planned costs for the periodic five-year maintenance of vehicles and the planned indexation of wages.

Sales profit for the first nine months of 2018 was 4.7 billion rubles compared to 0.1 billion rubles in the same period of 2017.

Income from share ownership in other companies increased 6.9 times and amounted to 5.2 billion rubles, which was related to dividend payments in higher volume from Group subsidiaries.

Balance of interest receivable and payable for the first nine months of 2018 amounted to 3.1 billion rubles, up 0.5 billion rubles (21.1%). Balance of interest was mainly formed by an increase in deposit portfolio and also due to raising short-term loan of intragroup resources.

Balance of other income/expenses for the first nine months of 2018 was 1.9 billion rubles compared to 0.2 billion rubles for the same period of 2017. This change was influenced primarily by income/expenses related to foreign currency translation differences resulting from changes in the exchange rates.

As a result, the net profit for the first nine months of 2018 increased 2.4 times and amounted to 12.8 billion rubles, compared to 5.4 billion rubles for the same period of 2017.

Balance sheet

As of September 31, 2018, total assets of PJSC Inter RAO increased by 29.7 billion rubles (6.4%), to 497,8 billion rubles, compared to December 31, 2017.

Non-current assets changed insignificantly in comparison with the beginning of the year and decreased by 0.3 billion rubles (0.1%) amounting to 356.7 billion rubles.

Current assets for the first nine months of 2018 increased by 30.0 billion rubles (27.0%). The main reason to the change is the rise in funds placed in the short-term loans from the group assets compared to December 31, 2017, as well as decrease in short-term receivables.

As of September 31, 2018, debt load amounted to 58.4 billion rubles. The debt portfolio is represented by short-term borrowed intra-group resources. The net debt of PJSC Inter RAO amounted to -66.2 billion rubles compared to -50.1 billion rubles as of the beginning of the year.

Total debt (excluding loans and borrowings) increased by 1.0 billion rubles (11.0%) compared to the beginning of the year and amounted to 9.9 billion rubles as of September 31, 2018. The change is mainly attributed to an increase in current liabilities pursuant to the terms contracts concluded.