• The company exceeded its guidance for 2018 disclosed with its strategic plan in February 2019 resulting from better power pricing and fixed cost optimisation over 4Q18

 

MAIN FINANCIAL HIGHLIGHTS (millions of RUB)

	2018	2017	Change
Revenues	73,265	74,400	-1.5%
EBITDA	17,225	17,732	-2.9%
EBIT	12,536	13,970	-10.3%
Net income	7,699	8,544	-9.9%
Net debt at the end of the period	19,376	17,889	+8.3%

“We are beating 2018 guidance on EBITDA and net income even though, as expected, we posted lower results versus the exceptional performance registered in 2017. In the last quarter of 2018, our results benefitted from higher revenues generated by power prices and effective management of fixed costs. Looking ahead, we are continuing to work on our wind projects, as well as enhancing our company’s operational and cost efficiency as we expect that the current challenging scenario will persist throughout 2019”

– Carlo Palasciano Villamagna, General Director of Enel Russia

Moscow, March 18th, 2019 – PJSC Enel Russia has published its audited consolidated financial statements for 2018 in accordance with the International Financial Reporting Standards (IFRS).

Revenues slightly declined, largely as a result of:

• lower output by conventional gas units that was mostly driven by lower loading by the System Operator  resulting from overcapacity in the system, as well as by a marginal  reduction in electricity consumption in the Ural region;
• a decline in revenues from the capacity market due to lower government bond yields in 2018 that was one of the components for the calculation of the DPM tariff.

Higher regulated sales with an increase in annual tariffs, as well as higher free capacity (KOM) prices resulting from its indexation for 2018, only partially offset the aforementioned drop in revenues.

EBITDA also declined slightly, reflecting revenues, with lower fixed costs partially offsetting the above decrease.

Specifically, fixed costs dropped by 6% largely on lower personnel costs resulting from the amendment to the company’s pension plan, in line with the recent evolution in legislation on the matter, lower use of materials following the higher level of planned maintenance that took place in 2017, as well as overhead optimisation initiatives. Recurring fixed costs, e.g. net of one-offs, increased on a like-for-like basis by marginal 0.4% over 2018 or well below CPI that is fully in line with the company’s strategic guideline.

EBIT decreased reflecting EBITDA, as well as higher accruals for bad debt.

Net income reflected EBIT dynamics, partially offset by lower net financial charges, which were mainly due to the optimisation of debt currency and cost structure, including the refinancing of 10 billion rubles of commercial papers in 2018.

Net debt as of December 31st, 2018 increased against the value posted as of December 31st, 2017, as a result of investments into the development of wind projects that were awarded to the company in a 2017 public tender.