RSTI.L Regulatory News (RSTI)

ROSSETI Discloses IFRS Financial Results for 2018FY

March 29, 2019. Moscow, Russia - PJSC ROSSETI (LSE:RSTI) ("Company"), Russia's largest electricity transmission and distribution company, discloses IFRS financial results of the ROSSETI Group for 2018.

Financial results:

· Revenue: 1 021.6 billion rubles (2017: 948.3 billion rubles)

· EBITDA: 306.3 billion rubles (2017: 292.8 billion rubles)

· Net profit: 124.7 billion rubles (2017: 121.2 billion rubles)

· Net cash flows from operating activities: 238.6 billion rubles (2017: 212.4 billion rubles)

Key operating results:

· Electricity transportation: 761.5 billion kWh (2017: 748.2 billion kWh)

· Network connection: 18,964 MW (2017: 25,890 MW)

Corporate highlights:

· In "Doing Business 2019" rating The Russian Federation obtained 94 out of 100 points for "Electricity network connection" parameter, which is the best parameter for The Russian Federation.

· In course of a face-to-face PJSC ROSSETI Board meeting "Digital Transformation 2030" Concept was approved.

· ACRA agency assigned the highest possible primary national scale credit rating to PJSC ROSSETI - ААА(RU), stable outlook.

· The Company paid a total of 2.5 billion rubles as dividends for 1Q 2018.

· Moody's Investors Service and Standard&Poor's rating agencies upgraded the long-term credit rating of PJSC ROSSETI to investment level "Baa3" and "BBB-", correspondingly, (stable outlook).

· The first Russian digital windpark was commissioned in Kaliningrad Region.

ROSSETI's financial and economic indicators for 2018 has shown positive momentum.

Net profit totaled 124.7 billion rubles in 2018, which is an increase of 2.9% vs. 2017.

EBITDA amounted to 306.3 billion rubles in the reporting period, which is 4.6% higher than in 2017.

Net debt/EBITDA decreased to 1.42х (1.55х in 2017).

Financial results

Key factors contributing to changes in financial performance:

- growth in the main revenue element - electricity transportation by 42.0 billion rubles on the account of tariff indexation, increased useful output, as well as changes in reimbursement procedure of losses under load, considered in OREM (Wholesale market for electricity and capacity) prices under Government Resolution of 07.07.2017 #810, by OREM members.

- growing electricity and capacity sales by 44.2 billion rubles on the account of sales volume increase due to obtaining the status of guaranteeing supplier from some subsidiaries and dependent companies.

- operating expenses growth by 71.7 billion rubles was affected mostly by non-controllable expenses dynamics:

1. electricity purchase to compensate losses, resulting from non-regulated price growth for purchased electricity and changes in reimbursement procedure of losses under load, considered in OREM prices under Government Resolution of 07.07.2017 #810. At the same time, Company revenue grew correspondingly, because those expenses were included in electricity transportation prices;

2. services of other territorial network organizations, on the back of growing individual tariffs;

3. purchase of electricity for sale, resulting from guarantee supplier status obtainment, herewith these costs are compensated by growth of revenue from electricity sales;

4. taxes and fees, affected mostly by growing property tax, on the back of gradual cancellation of allowance for electric grid facilities.

By the end of 2018, Group assets grew by 7.3%, up to 2,518.6 billion rubles (2,346.4 billion rubles as of December 31, 2017), mainly on the back of growing PP&E, resulting from new capacity commissioned under the investment program.

Pavel Grebtsov, Deputy Director General for Economic Affairs, noted, that ROSSETI Group keeps demonstrating upward dynamics of profitability and financial stability highlights, along with unquestionable reliability of electricity transportation, quality and accessibility of electricity supply for consumers.

More detailed information about the consolidated financial statements for the period ended December 31, 2018, can be found on the National Storage Mechanism at http://www.morningstar.co.uk/uk/NSM or on the Company's website at http://www.rosseti.ru/.

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For further information:

PJSC ROSSETI

Maria Stepanova, Head of IR +7(495) 995 5333 (ext. 3961)

Yulia Martynova, IR +7(495) 995 5333 (ext. 3834)

Horizon

Maria Novokreschenova +7 (495) 225 0335

Yaroslav Gryaznov +7 (495) 225 0335 (ext. 1010)

Public Joint Stock Company ROSSETI (PJSC ROSSETI) is one of the largest electric grid companies in the world. The Company manages 2.35 million kilometers of power lines and 507,000 substations with more than 792 GVA of transformer capacity. The number of the ROSSETI Group's employees is 217 thous.

ROSSETI comprises 35 subsidiaries and dependent companies, including 14 interregional grid companies and one transmission grid company. The controlling shareholder with an 88.04% stake in the Company is the government represented by the Federal Agency for State Property Management of the Russian Federation.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of PJSC ROSSETI. You can identify forward-looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might", the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industry, as well as many other risks specifically related to PJSC ROSSETI and its operations.