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Company statement

Inter RAO Group Publishes IFRS Interim Consolidated Financial Statements for the First Six Months of 2020

17 August 2020
Indicator, billion rubles* H1 2020 H1 2019 +/-

Revenue

476.7

520.5

-8.4%

Operating expenditures

440.4

470.8

-6.4%

Operating income

42.2

57.8

-26.9%

Net income

42.0

47.9

-12.3%

EBITDA

61.4

78.1

-21.4%

Capital expenditures

7.4

10.7

-30.9%

 

Indicator, billion rubles* As of June 30, 2020 As of December 31, 2019 +/-

   Total assets

758.9

751.0

1.1%

Total equity

581.3

552.8

5.2%

Loans and borrowings

3.0

3.3

-8.3%

   Lease liabilities

58.3

57.5

1.3%

   Net debt 1

-204.5

-196.5

4.1%

* — Financial indicators are provided based on these IFRS financial statements in billion rubles rounded to one decimal. Percentage ratios are calculated based on the data from the IFRS financial statements expressed in million rubles.

1Including deposits for a period from 3 to 12 months and lease liabilities (including the share of lease liabilities in joint ventures).

The changes in the Group's financial performance were significantly influenced by the following key factors and events:

  • A reduction in electricity exports and decrease in Nord Pool prices in the Group Trading Segment;
  • A slowdown in business due to restrictions introduced to combat the coronavirus spread;
  • A fall in prices on the day-ahead market (DAM), which is related to increased inflow and water reserves, loading of HPPs in the UES of Russia due to unloading of heat generation by the System Operator;
  • A termination of capacity supply agreements on several generating facilities;
  • An increase in average end consumer sales prices in the Supply Segment of the Group.

Consolidated statement on total income

Group’s revenue decreased by 8.4% (43.9 billion rubles) and amounted to 476.7 billion rubles.

The decline in the indicator was mainly impacted by segments such as Trading in the Russian Federation and Europe and Electric Power Generation in the Russian Federation.

The revenue in the Trading in the Russian Federation and Europe Segment decreased by 15.9 billion rubles (42.7%) in comparison with the corresponding period of the previous year and amounted to 21.3 billion rubles in H1 2020.Sales volumes and prices decreased considerably in Finland and Lithuania due to abnormally low Nord Pool prices, which are related to the impact of the coronavirus pandemic on the European economies, warm winter in the Northern Europe, high output of renewable energy sources and, consequently, the supply exceeding the demand in H1 2020.

The decrease in revenue in the Electric Power Generation and Thermal Power Generation in the Russian Federation segments by 12.3 billion rubles (17.0%) and 3.9 billion rubles (9.2%) respectively, was related to climate: high temperatures in winter caused both a decline in power consumption and an increase in output in the hydropower industry due to record inflow of water to reservoirs. As a result, the supply on the wholesale electricity and capacity market increased significantly, and the prices on the day-ahead market decreased. Moreover, a decrease in electricity consumption resulted from imposition of restrictions during the coronavirus pandemic.

In the International Assets Segment, the revenue decreased by 2.4 billion rubles (18.7%) and amounted to 10.5 billion rubles. A negative effect was related to the fact that Trakya Elektrik in Turkey generated no revenue due to termination of an agreement on plant operation in 2019. At the same time Moldavskaya SDPP showed good performance due to increased prices and supply volumes.

The Supply Segment demonstrated a decrease in revenue by 4.7 billion rubles (1.3%) to 342.4 billion rubles. The negative effect was mainly caused by the reduction of productive supply to legal entities, affected by an increase in the average monthly air temperature relative to the comparable period, as well as due to the restrictions related to the coronavirus pandemic.

Operating expenses decreased by 30.4 billion rubles (6.4%) as compared to the corresponding period of 2019 and amounted to 440.4 billion rubles.

The cost of purchased electricity and capacity decreased by 11.0 billion rubles (5.3%) as compared to the same period of the previous year and amounted to 199.0 billion rubles, as a result of both a reduction in electricity exports to Finland and Lithuania, and a reduction in prices on the wholesale electricity and capacity market.

Electricity transmission costs decreased by 1.5 billion rubles (1.2%) to 119.2 billion rubles mainly due to the performance of enterprises in the Trading segment and was related to reduction in output in an unfavorable environment.

Process fuel costs decreased by 12.4 billion rubles (19.8%) to 50.4 billion rubles.The main effect was in Inter RAO – Electric Power Plants Group and BGC Group due to a reduction in output in an unfavorable environment on the wholesale electricity and capacity market.

EBITDA decreased by 21.4% as compared to H1 2019 and amounted to 61.4 billion rubles.

In the Electric Power Generation in the Russian Federation Segment, EBITDA decreased by 4.8 billion rubles (11.3%) to 38.0 billion rubles. The decrease in the indicator is related to the decline in electricity output, and to a reduction in capacity supply due to termination of power supply agreements for unit No. 3 at Kashirskaya SDPP, and unit No. 3 at Sochinskaya TPP.

In the Thermal Power Generation in the Russian Federation Segment, EBITDA increased by 0.4 billion rubles (2.8%) to 13.5 billion rublesdue to diverging changes. Growth of the BGC Group's indicator, which was formed due to an increase in the weighted average price for the realized capacity of Zatonskaya TPP in the capacity supply agreement sector in the context of electricity output reduction at Karmanovskaya SDPP, was partially offset by a decrease in TGC-11 group, which was related to termination of the capacity supply agreements at Tomskaya SDPP-2, and a reduction in productive supply of heat.

In the Trading in the Russian Federation and Europe Segment, EBITDA decreased by 6.9 billion rubles (69.5%) and amounted to 3.0 billion rubles in H1 2020. A considerable decline in the indicator is related to a fall in prices and sales of electricity in Finland and Lithuania due to the unfavorable Nord Pool environment.

In the Supply in the Russian Federation Segment, EBITDA increased by 0.8 billion rubles (6.9%) and amounted to 12.3 billion rubles. A positive effect was mainly achieved due to tariff and balance decisions for 2020.

In the International Assets Segment, EBITDA decreased by 3.1 billion rubles (71.9%) in comparison with the corresponding period of the previous year and amounted to 1.2 billion rubles. The effects associated with the completion of the Trakya Elektrik project, as well as the negative impact of the outcomes in the Georgia segment, which worsened due to the fact that purchased electricity prices grew faster than sale prices, were partially offset by the growth in the Moldova segment due to increased prices and supply volumes.

Net income decreased by 5.9 billion rubles (12.3%) in comparison with the corresponding period of the previous year and amounted to 42.0 billion rubles.

Consolidated statement of financial position

Total assets increased by 7.9 billion rubles (1.1%), amounting to 758.9 billion rubles.

Following the results of H1 2020, the Group's total assets increased due to the accumulation of the cash flow from operating activities. At the same time, the amount of accounts receivable decreased, in relation to, among other things, construction of Primorskaya TPP for LLC Kaliningrad Generation.

Equity increased by 28.5 billion rubles (5.2%), amounting to 581.3 billion rubles.

Equity growth resulted from the recognition of net profit for the reporting period and was partially offset by the effect of distribution of dividends to shareholders.

Total loans and borrowings decreased by 8.3% to 3.0 billion rubles. Leasing obligations including the share in the joint ventures increased by 0.8 billion rubles and amounted to 58.3 billion rubles.

Total loans and borrowings of the Group decreased by 0.3 billion rubles (8.3%) to 3.0 billion rubles as a result of diverging effects from borrowings and repayment of those borrowed funds.

Growth in lease-related obligations by 0.8 billion rubles (1.3%), with regard to the size of holdings in JVs, was mainly associated with leasing equipment of unit No.4 at Pregolskaya TPP, which was additionally put into operation in H1 2020.

The ratio of long-term debt to short-term debt as of June 30, 2020 amounted to 25.7% against 74.3% (on December 31, 2019 – 14.3% against 85.7%).

2 TGK-11 Group is represented by thermal power generating companies JSC TGK-11 (Omsk) and JSC Tomsk Generation, and heat distribution network operators JSC Tomsk RTS and JSC Omsk RTS.


Next material:

PJSC Inter RAO and the administration of the Kostroma Region signed a cooperation agreement
Consolidated
financial statements
prepared according to
IFRS
1H 2020
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 30.9 GW of installed power generation capacity.

www.interrao.ru