13 Mar 2014 13:55
JSC Russian Grids
Optimisation of investment programme for 2015-2019
13 March 2014. Moscow, Russia. - JSC Russian Grids (LSE: RSTI) (the "Company"), the largest electricity transmission and distribution grid company in Russia, today announces that the Board of Directors of the Company has reviewed a draft of consolidated investment programme for 2015-2019 at the meeting held yesterday.
The draft of consolidated investment programme has been designed by the Company to comply with the Russian President's instruction № Pr-2657 dated 13 November 2013, which is aimed at optimising the investment programmes of natural monopolies while preserving electricity transmission tariffs in 2014 at the level of 2013 and limiting tariff growth in 2015-2016 to the inflation level.
The Company has outlined the following principal conditions for optimising its investment programme for the period until 2019:
1. Zero tariff rate in 2014 and restricted tariff growth in 2015 and 2016 in accordance with the socio-economic development outlook for 2014-2016 prepared by the Ministry of Economic Development of Russia
2. Implementation of the Strategy for development of Russian electricity grid infrastructure approved by the Russian Government with decree № 511-r dated 13 April 2013
3. Inclusion of additional technological connection capacities, comprising ones for customers entitled to reduced tariffs, in the investment programme
4. Inclusion of new facilities in the investment programme, according to the instructions of regulatory authorities, comprising facilities for the autumn and winter periods of 2013/2014 and 2014/2015
5. Adjustment of the investment programme based on the results of the 2013 investment programme execution
6. Inclusion of measures to provide reliable electricity supply during the FIFA World Cup 2018 and support federal projects in the investment programme
7. Inclusion of transmission grid facilities providing connection to generating capacities, comprising facilities in accordance with capacity supply agreements, in the investment programme
According to the consolidated investment programme of the Company for the period until 2019, estimated commissioning costs for new electricity transmission and distribution facilities in 2014-2018 have been decreased by RUB 109.6 bn (excl. VAT) while maintaining capacity parameters.
An initial cost estimate for commissioning new facilities in 2014-2018 was RUB 1,100 bn (excl. VAT).
The Board of Directors has requested that the General Director of the Company should coordinate the approval of the Company subsidiaries' investment programmes. According to the Russian legislation, investment programmes of the Company's subsidiaries are subject to approval by the Russian executive authorities.
The investment programmes of the Company and its subsidiaries for the period until 2019 are to be approved by Russian executive authorities by 15 August 2014.
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For further information:
JSC Russian Grids
Maria Stepanova, Head of IR +7(495) 995 5333 (ext. 3961)
FTI Consulting
Larisa Millings +44 20 7831 3113
Oleg Leonov / Maria Shiryaevskaya +7 (495) 795 0623
JSC Russian Grids is the largest electricity transmission and distribution grid company in Russia. It is also one of the largest electricity transmission and distribution grid companies in the world by length of electricity lines and installed transformer capacity. JSC Russian Grids holds interests in and manages 11 interregional, 5 regional distribution grid companies and Federal Grid Company in Russia. The Company together with its subsidiaries owns and operates approximately 2.2 million kilometers of electricity transmission and distribution lines with a total installed transformer capacity of approximately 739 GVA. Through its subsidiaries, the Company operates in 73 regions of Russia. As of 30 June 2013, the Company's revenue amounted to RUB 348.8 bn, while adjusted net profit[1] totaled RUB 36.3 bn.
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 JSC Russian Grids. 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 JSC Russian Grids and its operations.
[1] Adjusted net profit is calculated as net profit not taking into account impairment of available-for-sale investments, impairment of promissory notes, provision for impairment receivables and deferred income tax liabilities referred to them.