Enel Russia 1H 2018 results impacted by market conditions

  • Increased output in 2Q 2018, specifically from CCGT units, partly offset adverse market conditions


MAIN FINANCIAL HIGHLIGHTS (millions of RUB)

1H 2018

1H 2017 

Change

Revenues 

34,011

34,822 

-2.3%

EBITDA 

7,705

8,689 

-11.3%

EBIT 

5,581

6,935 

-19.5%

Net income  

3,391

4,300 

-21.1%

Net debt at the end of the period 

22,225

17,8891

+24.2%

As of December 31st, 2017


“The results posted in the second quarter of 2018 helped us smooth the negative trend from the first half of the year, while the strong performance of our CCGT units allowed us to withstand the challenging market scenario. Enel Russia confirms its conservative guidance for 2018 results, as outlined in the company’s strategic plan”

– Carlo Palasciano Villamagna, General Director of Enel Russia


Moscow, July 31st, 2018 – PJSC Enel Russia has published its reviewed 1H 2018 financial results in accordance with the International Financial Reporting Standards (IFRS).

Revenues declined, mainly reflecting:

  • reduced output by most power generation facilities, with the exception of CCGT units, that was driven by overcapacity as well as by weaker electricity consumption in the Urals region;
  • a slight decrease in revenues from the capacity market resulting from the lower government bond yield in 2018 that was one of the components for the calculation of DPM tariff.

Higher regulated sales with annual tariffs increase, as well as higher free capacity (KOM) sales due to indexation of KOM prices, only partially offset the aforementioned decline in revenues.

EBITDA also declined, in line with:

  • lower revenues;
  • higher fixed costs driven by the property tax on movable assets as of 2018.

Lower fuel costs caused by lower electricity production partially offset the above decrease.

  • The decrease in EBIT reflected EBITDA dynamics, as well as higher depreciation and amortisation together with higher accruals for bad debt.
  • Net income reflected EBIT decline, partially offset by lower net financial charges, which were mainly attributable to lower average debt level compared with 1H 2017, also backed by the positive effect of the company’s financial charges optimisation strategy.
  • Net debt as of June 30th , 2018 increased against the value posted as of December 31st, 2017, mainly explained by 5.1bn RUB of dividends paid upon FY 2017 results.


OPERATIONAL HIGHLIGHTS

1H 2018

1H 2017

Change

Net power output (GWh) 

17,998

18,325

-1.8%

Power sales (GWh) 

20,657

21,068

-2.0%

Heat sales (thousand Gcal) 

2,753

2,841

-3.1%


Net power output declined, reflecting lower production of all units (except both CCGT units at Sredneuralskaya and Nevinnomiskaya) and in particular:

  • Konakovskaya output dropped by 8.6%, mainly due to higher hydro production in the Middle Volga region.
  • Reftinskaya output was 2.3% down due to downward trend in power consumption in the Urals region.

CCGT units recorded an increase in output, as both units were going through scheduled maintenance in 2Q 2017. This increase compensated the lower production from non-CCGT units, and improved the dynamics of the relevant power plants, and specifically:

  • Sredneuralskaya output stood flat, despite overcapacity in the system;
  • Nevinnomysskaya output increased by 3.6%, supported by growing power demand in Southern Russia, and in spite of the high hydro production in the same region.

Power sales were down due to the abovementioned factors of net power output.

Heat sales decreased slightly, mostly attributable to a reduction in the volumes sold by Sredneuralskaya.

Enel Russia 1H 2018 results impacted by market conditions

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