27 Jul 2017 14:24
Federal Grid Company Announces H1 2017 RAS Results
Moscow, 27 July 2017 - Federal Grid Company of Unified Energy System ("Federal Grid Company" or "the Company"; Moscow Exchange, LSE: FEES), the owner and operator of the Unified National Electricity Grid ("UNEG"), announces its financial results for the first half of 2017 under Russian Accounting Standards (RAS).
The Company's RAS statements are prepared on standalone basis and do not include the results of Federal Grid Company's subsidiaries or affiliated companies that operate as independent legal entities.
Key financial results
Item (mln RUB) | H1 2016г. | H1 2017г. | Change, % |
Revenue | 85,928 | 92,802 | 8.0% |
Electricity transmission services | 82,833 | 90,203 | 8.9% |
Connection services | 2,233 | 1,713 | (-23.3%) |
Cost of sales | 67,844 | 69,850 | 3.0% |
Management expenses | 3,482 | 3,517 | 1.0% |
Profit from sales | 14,603 | 19,435 | 33.1% |
Adjusted EBITDA* | 62,236 | 69,223 | 11.2% |
Net profit | 16,363 | 18,615 | 13.8% |
* excluding accrual and reversal of provisions for doubtful debts, revaluation of assets and revenue from connection services
Federal Grid Company's results for the first half of 2017 demonstrates the company's ongoing work to improve core financial performance.
The Company's revenue for H1 2017 increased by 8.0% year-on-year, driven by:
- Electricity transmission services revenue grew by RUB 7,370 million, or by 8.9% year-on-year, provided with the tariff increase by 7.5% from 01.07.2016, due to an increase in consumption by direct customers;
- Revenue from connection services decreased in accordance with the schedule of services, which reflects customer orders.
Adjusted EBITDA (excluding accrual and reversal of provisions for doubtful debts and revenue from connection services) increased by RUB 6,987 million (11.2%) year-on-year and amounted to RUB 69,223 million.
Federal Grid Company's net profit in H1 2017 amounted to RUB 18,615 million, a year-on-year increase of 13.8%.
Adjusted net profit (excluding revaluations and reserve accruals) grew by 66.8%:
Item (mln RUB) | H1 2016г. | H1 2017г. | Change, % |
Net profit | 16,363 | 18,615 | 13.8 % |
change in provisions | 4,168 | (1,721) | - |
Adjusted net profit | 12,195 | 20,337 | 66.8 % |
In H1 2017, Federal Grid Company continued implementing cost-cutting measures. While the consumer price index rose by 4.4% in the first half of 2017 year-on-year and the manufacturers price index rose by 9.1%, cost of sales and management costs rose by 2.9%, while managed costs (excluding losses, transit, depreciation and amortization and property tax) rose by 3.6%.
Item (mln RUB) | H1 2016г. | H1 2017г. | Change, % |
Cost of sales and management costs | 71,326 | 73,367 | 2.9% |
Electricity purchases | 7,116 | 7,184 | 1.0% |
Electricity transmission services | 1,003 | 470 | (53.2%) |
Taxes and duties (including social tax) | 7,148 | 7,963 | 11.4% |
depreciation and amortization | 40,862 | 42,009 | 2.8% |
managed expenses | 15,197 | 15,741 | 3.6% |
Balance sheet as of 31 June 2017
Assets
Assets Federal Grid Company's total assets remained virtually unchanged from the beginning of the year (rising by RUB 287 million) and amounted RUB 1,366,460 million. Non-current assets accounted for RUB 1,172,480 million, while current assets amounted to RUB 193,981 million.
Federal Grid Company's equity decreased by RUB 1,015 million (0.1%). This change is attributable to the profit generated in H1 2017 (RUB 18,615 million) and the decision to pay dividends on the basis of 2016 (RUB 18,185 million) and for the first quarter of 2017 (RUB 1,423 million).
Liabilities
The Company's gross debt decreased by RUB 10,223 million (3.8%) during the first six months of the year, in connection with the successful put offer on the Company's series 21 bonds in the second quarter of 2017, and at the end of the reporting period amounted to RUB 255,623 million (including accrued interest)
Financial statements for H1 2017 under RAS are available on Federal Grid Company's website in the Financial Disclosure/RAS Financial Reports section at the link: http://www.fsk-ees.ru/eng/investors/financial_disclosure/ras_financial_reports/