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

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

Indicator*	First six months of 2018	First six months of 2017	+/-
Revenue	19.9	18.8	6.1%
Cost	14.7	15.3	-3.7%
Gross profit	5.2	3.5	49.0%
Profit/(loss) on sales	1.4	-0.3	-
Net profit	7.9	4.1	93.6%
As of June 30, 2018	As of December 31, 2018
Total assets	486.3	468.1	3.9%
Total equity	424.7	430.3	-1.3%
Loans and borrowings	52.4	28.9	81.6%
Net liabilities**	-61.7	-50.1	23.0%

* 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 six months of 2018 amounts to 19.9 billion rubles, up 1.1 billion rubles (6.1%) as compared to the first six months of 2017.

Power export revenues amount to 12.2 billion rubles, up 0.3 billion rubles (2.3%) from the first six 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 (14.7%), Kazakhstan (5.3%), Azerbaijan (2.3%), Lithuania (1.1%) with a simultaneous decrease in supplies to Belarus (97.7%), Georgia (85.5%), Ukraine (44.3%). Revenue from WECM electricity and capacity sales for the first six months of 2018 was 7.7 billion rubles, up 1.1 billion rubles (16.4%). This change is related to an increase in electricity import from Kazakhstan.

Cost of goods sold for the first six months of 2018 was 14.7 billion rubles, which is 0.6 billion rubles (3.7%) lower than in the same period of 2017. The change in cost of goods sold reflects several multidirectional factors, including a 1.0 billion ruble (8.6%) decrease in the cost of electricity purchased domestically due to the decrease in electricity export mainly to Georgia and Belarus, a reduction in other cost of sales by 0.3 billion rubles (99,4%) due to absence of the supply of energy equipment for export and an increase in the cost of electricity import by 0.7 billion rubles (25.0%), mainly due to the increase in the volume of electricity import from Kazakhstan (35.3%).

Gross profit for the first six months of 2018 was 5.2 billion rubles compared to 3.5 billion rubles in the same period of 2017.

Selling costs in the first six months of 2018 were 0.9 billion rubles, down 0.5 billion rubles (35.4%) year-on-year. The primary driver of this change was the lower cost of infrastructure services due to a change in electricity exports by volume for Georgia and Belarus.

Administrative expenses increased by 21.2% and amounted to 3.0 billion rubles compared to 2017. The increase was mainly influenced by the planned costs for the periodic five-year maintenance of vehicles and the planned indexation of wages in second six months of 2017.

Sales profit for the first six months of 2018 was 1.4 billion rubles compared to 0.3 billion rubles in the same period of 2017.

Income from share ownership in other companies changed 7.3 times and amounted to 4.7 billion rubles, which was related to dividend payments from Group subsidiaries in higher volume.

Balance of interest receivable and payable changed insignificantly and for first six months of 2018 amounted to 1.8 billion rubles. Balance of interest was mainly formed by an increase in deposit portfolio and also due to raising short-term loan intragroup resources

Balance of other income/expenses for the first six months of 2018 was 0.9 billion rubles compared to -0.3 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 six months of 2018 was 7.9 billion rubles, compared to 4.1 billion rubles for the same period of 2017.

Balance sheet

As of June 30, 2018, total assets of PJSC Inter RAO increased by 18.2 billion rubles (3.9%), to 486.3 billion rubles, compared to December 31, 2016.

Non-current assets increased by 0,2 billion rubles (0,1%) in comparison with the beginning of the year and amounted to 357,2 billion rubles.

Current assets as of June 30, 2018 increased by 18,0 billion rubles (16,2%). 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 decease in short-term receivables.

As of June 30, 2018, debt load amounted to 52.4 billion rubles. The debt portfolio is represented by short-term borrowed intra-group resources. The net debt of PJSC Inter RAO amounted to -61.7 billion rubles compared to -50.1 billion rubles as of the beginning of the year.

Total debt (excluding loans and borrowings) increased by 0.3 billion rubles (3.8%) compared to the beginning of the year and amounted to 9.2 billion rubles as of June 30, 2018.