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Inter RAO Group Announces Operating Results for the First Six Months of 2017

Inter RAO Group has announced its operating results for the first six months of 2017.

The following structural changes in Inter RAO Group took place and affected its operating results:

  • the sale of 100% ownership stake in Georgian Mtkvari Energy;
  • the acquisition of an energy sales company in Bashkortostan.
Generation across the Group:
Indicator First six months of 2017 First six months of 2016 +/-
Installed power generation capacity at the end of the reporting period, GW 31.705 32.439 -2.3%
Installed heat production capacity at the end of the reporting period, thousand Gcal/hour 25.625 26.292 -2.5%
Power generation, billion kWh 64.652 64.494 +0.2%
Utilization of installed capacity 47.5% 45.1% -
Heat distribution from collectors, million Gcal 22.61 21.608 +4.6%

Russian generation:
Indicator First six months of 2017 First six months of 2016 +/-
Installed power generation capacity at the end of the reporting period, GW 27.449 28.183 -2.6%
Installed heat production capacity at the end of the reporting period, thousand Gcal/hour 24.945 25.612 -2.6%
Power generation, billion kWh 58.791 57.79 +1.7%
Utilization of installed capacity 50.0% 46.9% -
Heat distribution from collectors, million Gcal 22.494 21.49 +4.7%

The following factors driving the key performance indicators of the Generation Segment compared to the first six months of 2016 were as follows:

  • Retirement of 1271 MW of legacy low-efficiency equipment in Russia, including 865 MW at Cherepetskaya TPP, 330 MW at Verkhnetagilskaya TPP, 75 MW at Omskaya TPP-3 and 1 MW at Bashkir power generation facilities on January 1, 2017;
  • Addition of 567 MW of new CDA power generation capacity (447 MW to Verkhnetagilskaya TPP and 120 MW to Omskaya TPP-3;
  • Sale of the 120 MW (328 Gcal/hour) Kumertau TPP in November 2016;
  • An increase in the installed capacity of the existing units by 90 MW after relabeling in the second half of 2016 (including by 31 MW at Urengoyskaya SDPP and by 30 MW at Gusinoozerskaya SDPP);
  • Repair works at the power generation units of Permskaya TPP, Northwestern TPP, and Kaliningradskaya TPP-3, which resulted in revenue growth for the first six months of 2017;
  • Lower air temperature in winter 2017 and a later end to the heating season in spring 2017
  • Optimizing the load of power generating assets.

Assets abroad: generation and distribution networks
Indicator First six months of 2017 First six months of 2016 +/-
Installed capacity at the end of the reporting period, GW 4.255 4.555 -6.6%
Installed heat production capacity at the end of the reporting period, thousand Gcal/hour 0.68 0.68 -
Power generation, billion kWh 5.861 6.704 -12.6%
Utilization of installed capacity 37.1% 33.7% -
Heat distribution from collectors, million Gcal 0.116 0.118 -1.6%
Length of transmission lines, km 5216 4943 +5.5%
Electricity delivery to the grid, billion kWh 1.42 1.326 +7.1%
Electricity losses in the grids of JSC Telasi 3.2% 4.3% -

The main factors driving the key performance indicators were as follows:

  • Divestment of Georgian Mtkvari Energy with the capacity of 600 MW from the Group;
  • Termination of deliveries from Moldova TPP to Moldova in April and May 2017 (625 mln kWh drop in electricity production);
  • Repair works at Trakya TPP in Turkey in April and May 2017 (64 mln kWh drop in electricity production);
  • Low water levels in Georgia affected the output of Khrami HPP (72 mln kWh drop in electricity production);
  • A 230 mln kWh increase in the load of Ekibastuz SDPP-2 due to entry into Kazakhstan’s centralized trade market (in 2016, the plant mainly supplied energy to Russia);
  • A decrease in power consumption in Kazakhstan and Transnistria during the heating season;
  • Addition of 237 kilometers to the transmission grid in Georgia after the installation of new grid connections and redundancy lines;
  • Growth of electricity distribution to the grid at JSC Telasi up to 94 mln kWh (7.1%) due to consumption growth.

Russian sales
Indicator First six months of 2017 First six months of 2016 +/-
Consumer base, million 14.606 12.862 +13.6%
Electricity delivery to the grid, billion kWh 91.513 83.025 +10.2%
Share of the Russian retail market* 17.2% 15.9% -

* The share of the Russian retail market is defined as the ratio of retail sales to actual total electricity consumption (532.8 bn kWh in the first six months of 2017 compared to 524.3 bn kWh in the first six months of 2016 according to the System Operator of the Unified Energy System of Russia).

Higher figures are related to the acquisition of LLC Bashkir Energy Sales Company.

In addition, the number of consumers continued to grow following the signing of new agreements with suppliers within the Inter RAO Group and with commercial customers and residential consumers in new communities, and also as the transfer of consumers from other organizations continues.

At the same time, electricity sales of suppliers of last resort also increased because Mosenergosbyt concluded agreements on servicing large customers in Moscow and in the Moscow Region, as well as in other regions, and because of returning customers serviced by Oboronenergosbyt.

Furthermore, the recovery of macroeconomic growth in regions where the companies operate, as well as the longer and colder winter in 2017, had a positive impact on electricity sales.

Commercial electricity import and export by Inter RAO Group across Russia’s borders:
Indicator First six months of 2017 First six months of 2016 +/-
Export, bln kWh 7.552 7.913 -4,6%
Including:

Finland

2.639 2.762 4.5%

Lithuania

1.502 1.328 +13.1%

China

1.213 1.21 +0.2%

Belarus

1.06 1.332 -20.4%

Kazakhstan

0.625 0.593 +5.4%

Georgia

0.215 0.387 -44.4%

Mongolia

0.134 0.133 +0.8%

South Ossetia

0.084 0.08 +5.0%

Ukraine

0.049 0.063 -22.2%

Azerbaijan

0.03 0.025 +20.0%
Import, bln kWh 3.126 1.525 2.05x
Including:

Kazakhstan

2.819 1.243 2.27x

Georgia

0.186 0.144 +29.1%

Azerbaijan

0.054 0.06 -10.0%

Lithuania

0.045 0.056 -19.6%

Mongolia

0.016 0.022 -27.2

Estonia

0.006 - -

Key drivers of our export and import volumes:

  • Decreased deliveries of Russian electricity to Belarus and Georgia due to the market conditions;
  • Economic efficiency of deliveries from Russia to Lithuania and from Kazakhstan to Russia.

Next material:

Inter RAO Group commissions generating unit 12 at Verkhny Tagil state district power plant
Consolidated
financial statements
prepared according to
IFRS
for 1Q 2017
View report

Reference

Inter RAO Group is a diversified energy holding serving various segments of Russian and international electric power industry. The Group is the leading exporter and importer of electricity in Russia actively increasing electricity generation and sales, and developing new lines of business.

The corporate strategy of Inter RAO is focused on making Inter RAO a global energy enterprise, a key player in the global energy market, and Russia's leading electric utility by energy efficiency. Inter RAO Group owns and operates approximately 32 GW of installed power generation capacity.

www.interrao.ru