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ROSSETI Discloses IFRS Financial Results for 2018FY

ROSSETI Discloses IFRS Financial Results for 2018FY 29.03.2019

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

Indicator

2018

2017

YoY Change

billion rubles

billion rubles

%

Revenue, including:

1,021.6

948.3

7.7

- Electricity transportation

826.2

784.2

5.4

- Electricity and capacity sales

119.9

75.7

58.4

- Network connection

52.6

52.4

0.4

Operating expenses

(869.3)

(797.6)

9.0

EBITDA

306.3

292.8

4.6

Net profit

124.7

121.2

2.9

Net Debt[1]

434.1

453.4

(4.3)

Net cash flow from operating activities

238.6

212.4

12.3

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 https://www.rosseti.ru/.


[1] Bank deposits with 3-month maturity are included in calculation

* Indicators in compliance with with historical adjustments within the framework of current accounting policies


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