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DGAP-News: Bashkirenergo publishes financial results for 6 months of 2011
ID: 474681
(firmenpresse) - EquityStory.RS, LLC-News: OJSC Bashkirenergo / Key word(s): Half Year
Results
Bashkirenergo publishes financial results for 6 months of 2011
06.09.2011 / 10:45
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Bashkirenergo publishes financial results for 6 months of 2011
September 6, 2011, Ufa (Russian Federation, Republic of Bashkortostan) -
OJSC 'Bashkirenergo' (MICEX, RTS: BEGY, ISIN: RU0009044242) - publishes
consolidated financial statements for six month ended 30 June, 2011
prepared in accordance with IFRS.
Following the decision approved by the Board of Directors of OJSC 'BE' to
sell electricity retail business, all operations of LLC ESKB were presented
in a separate line of the consolidated statement of comprehensive income
'Profit from the discontinued operations' in compliance with IFRS. As a
result, operations of sales and purchases of electricity and capacity
between the companies of the Group and LLC ESKB were reflected in revenue
and operational expenses in the consolidated financial statements.
Considering the fact that before January 1, 2011 OJSC 'Bashkirenergo' had
the status of the guaranteeing provider (retail company) with LLC ESKB
acting only as an agent, revenue and operational expenses for 2010 became
incomparable with 2011 results after reclassification of the LLC ESKB
results.
KEY FINANCIAL RESULTS:
- The Company's revenue for the first six months of 2011 is decreased by
6% to 29,385 mln RUR (1,027 mln USD) compared to the same period of
2010.
- Operating profit increased 24% year-over-year reaching 3,892 mln RUR
(136 mln USD).
- OIBDA was 5,627 mln RUR (197 mln USD) or 16% higher comparing the same
period last year.
- Net profit from continuing operations increased by 28% to 3,001 mln RUR
(105 mln USD) compared to 2010 results.
- Net profit for the period amounted to 3,332 mln RUR (116 mln USD)
increased by 40%.
- OIBDA margin changed from 16% to 19%.
- As at June 30, 2011 the Company's financial debt amounted to 2,433 mln
RUR, with debt/OIBDA ratio at the level of 0.43.
KEY OPERATING RESULTS:
- OJSC 'Bashkirenergo' total power generation in the first six months of
2011 was 11,476 mln kWh, gaining 4.3% year-over-year.
- The capacity factor of OJSC 'Bashkirenergo' power stations rose to 62%
(an increase of 5.6 b.p. compared to first six months of 2010).
- Heat output of the Company amounted to 13,956 thousand Gcal matching
the results of 2010.
- The specific consumption of equivalent fuel decreased by 2.5 g/kWh for
electricity generation to 316.7 g/kWh, and by 1 kg/Gcal for heat output
to 142.8 kg/Gcal compared to the same period last year.
- The transmitted electricity losses in the first six months of 2011
increased from 1.45% to 1.49% in the transmission grid, with
distribution grid losses increasing from 9.14% to 9.47%.
Andrey Makarov, CEO of OJSC 'Bashkirenergo' commenting the financial
results of the first six months of 2011 has stated: 'OJSC 'Bashkirenergo'
both in the second quarter and in the first six months of 2011 demonstrated
strong financial and operational results. Despite this year solid financial
performance of LLC ESKB the management and main shareholders of OJSC
'Bashkirenergo' forecast that electricity and heat generation and
transmission businesses are to become the Company's main profit making
activities. This position was declared in the Company's Strategy, adopted
by the Board of Directors on August 31, 2011. I also consider the adopted
in the Strategy measures of making the heat business profitable by 2013
will make a positive contribution to financial results and the Company's
value in the nearest future.'
RESULTS OVERVIEW
The second quarter of 2011 brought substantial increase of the OJSC
'Bashkirenergo' power output with an 8% growth of power generation to the
same period last year, providing for a 4% rise of power output in the first
six months of 2011. The Unified Power System of the Russian Federation in
the first half of the year increased its power generation by only 1,8% with
OJSC 'Bashkirenergo' share in the total Russian power output reaching
2,19%.
The rise in power prices at the Karmanovskaya GRES delivery point of the
wholesale electricity market as well as the hike in power output by
Pavlovskaya hydroplant due to the water inflow at the Pavlovskaya water
reservoir were the main reasons for the growth in electricity production.
Within the scope of government-backed measures to reduce electricity prices
for ultimate consumers the State tariffs committee of the Republic of
Bashkortostan retroactively revised the tariffs for electricity
transmission in 2011. However the tariffs revision had little if any effect
on the Company's financial results for the six months of 2011.
On June 15, 2011 OJSC 'Bashkirenergo' and OJSC 'Power Machines' signed an
agreement to cease all the mutual legal claims in accordance with which
OJSC 'Bashkirenergo' settled all the payments amounting to 2,113 mln RUR
for the gas-turbine, steam-gas, and generator equipment produced for SGU
CHP-5 in Ufa.
The Annual General Shareholders Meeting of OJSC 'Bashkirenergo', assembled
on June 24, 2011 decided to distribute 1,085 mln RUR in form of dividends,
and 472 mln RUR to transfer for investment projects. OJSC 'Bashkirenergo'
fully met its obligation by paying all the dividends in due course of 0.944
RUR per ordinary share and 2.01 RUR per one preference share.
The AGM also elected the new Board of Directors with 8 members representing
JSFC 'Sistema', three members representing INTER RAO UES, one member from
the Ministry of Energy of Russia, and one member from minority
shareholders.
Key Financial Performance Indicators, in mln RUR
2nd quarter 6 monthsKey Operating Results
Change. Change
Indicator 2011 2010 % 2011 2010 %
Revenue 12,537 12,725 -1% 29,385 31,302 -6%
Operating expenses (11,489) (12,147) -5% (25,493) (28,168) -9%
Operating Profit 1,048 578 81% 3,892 3,134 24%
Profit before income tax 1,032 568 82% 3,864 3,115 24%
Income tax expenses (253) (234) 8% (863) (771) 12%
Profit from continuing
operations 779 334 133% 3,001 2,344 28%
(Expenses)/ profit from
discontinued operations (187) 7 -2771% 331 40 728%
Profit for the period 592 341 74% 3,332 2,384 40%
OIBDA 1,869 1,428 31% 5,627 4,847 16%
OIBDA margin 15% 11% 4 b.p. 19% 16% 3 b.p.
EBIT margin 8% 5% 3 b.p. 13% 10% 3 b.p.
Net margin 5% 3% 2 b.p. 11% 8% 3 b.p.
2nd quarter 6 monthsREVENUE
Change Change
Indicator 2011 2010 % 2011 2010 %
Installed electric capacity, MW 4,267 4,456 -0,6% 4,261 4,489 -0.6%
(average)
Installed heat capacity, Gcal/h 13,275 13,630 -2,6% 13,275 13,630 -2.6%
(average)
Electricity generation, mln kWh 5,099 4,699 9% 11,476 11,005 4%
Heat output, thousand Gcal 4,207 4,137 2% 13,956 13,964 0%
Electric capacity factor, % 55% 48% 6,5 62% 56,4% 5.6
b.p. b.p.
Specific consumption of 326 330 -4% 317 319 -1%
equivalent fuel for electricity
generation, g/kWh
Specific consumption of 146 147 -1% 143 144 -1%
equivalent fuel for heat output,
kg/Gcal
Distribution grid losses, % 6.21% 5.99% 0,22 9.47% 9.14% 0,34
b.p. b.p.
Transmission grid losses, % 1.42% 1.43 - 0,01 1.49% 1.45% 0,04
b.p. b.p.
Revenue reduction in the statements for the six months of 2011 is result of
reclassification of all operations of LLC ESKB into the separate line
'Profit from the discontinued operations' due to the decision made to sell
the retail company.
The financial result of 2011 became incomparable with 2011 even with
reclassification of LLC ESKB results since before January 1, 2011 OJSC
'Bashkirenergo' had the status of a guaranteeing provider (retail company)
with LLC ESKB acting as a retail agent.
OPERATING EXPENSES
The decision to sell the retail company mostly impacted amount of purchased
electricity and capacity which decreased by 70% to 1,992 mln RUR (70 mln
USD), and the electricity transmission costs showing a 119% growth to 1,137
mln RUR (40 mln USD).
Fuel costs for 6 months of 2011 representing 54% of total operating
expenses increased 12% to 13,783 mln RUR (482 mln USD) and were driven by
a 15% gas price indexation, as well as by a 4% rise in power output by
thermal power plants. The slower growth pace of fuel costs compared to gas
price hike is explained by the reduction in specific consumption of
equivalent fuel.
Fixed costs which represent 33% of total operating expenses amounted to
8,299 mln RUR (290 mln USD). During the six months ended 30 June, 2011 it
decreased by 3% mostly due reduction of provisions for tax and legal
contingencies and allowances for doubtful receivables.
Staff costs being the largest item of fixed costs (17% of total operating
expenses) rose by 7% against the first six months of 2010 to 4,210 mln RUR
(147 mln USD).
Repair and maintenance together with costs of materials and spare parts (6%
of operating expenses) were 1% lower than in the same period last year
amounting to 1,441 mln RUR (50 mln USD) mostly due to a 34% cut in
expenditure on material and spare parts.
Other operating expenses dropped by 51% to 570 mln RUR (20 mln USD).
FINANCIAL POSITION
As of the balance sheet date, the total assets of OJSC 'Bashkirenergo'
amounted to 63,162 mln RUR (2,250 mln USD).
The share of non-current assets exceeded 84% of total assets and amounted
53,060 mln RUR (1,890 mln USD), while the share of current assets was 16%
or 10,103 mln RUR (360 mln USD). During the first six months of non-current
assets increased by 3% as a result of 7% increase in property, plant and
equipment due to new commissioning and increase of construction
in-progress. The expected disposal of LLC ESKB would lead to the reduction
of current assets by 2,453 mln RUR (87 mln USD) and current liabilities by
1,474 mln RUR (52 mln USD).
Capital and reserves made up 82% of the total equity and liabilities
amounting to 52,091 mln RUR (1,855 mln USD). By the end of the six months
of 2011 the Company's financial debt increased to 2,433 mln RUR (87 mln
USD) mainly due to a three-year loan for the construction of a new power
station SGU CHP-5 obtained from Sberbank. As at December 31, 2011 financial
debt of the Company amounted to 160 mln RUR.
The free cahsh flow dropped by 28% to 2,442 mln RUR (85 mln USD) mostly due
to CAPEX increase by 179%. It is also worth mentioning a 1,211 mln RUR (86
vln USD)increase of trade and other payables positively impacting the FCFF.
CAPITAL EXPENDITURE
Investment programs in the first six months of 2011 increased by 179% and
amounted to 3,735 mln RUR, compared to the same period last year.
On April 27, 2011 Zauralskaya CHP saw the commissioning of a GTES-16PA (on
the basis of a jet engine) a 16 MW power unit with a water-heating
boiler-utilizer 19.5 Gcal/h of heat capacity.
On April 29 the Board of Directors approved the decision to resume the
construction of the SGU CHP-5 in Ufa (440 MW, 290 Gcal/h) with the total
project cost of 14 bln RUR. The commissioning of the new capacities is
planned in 2013.
June 23, 2011 saw a successful completion of comprehensive testing of the
new SGU-60 unit at CHP-2 of Ufa which resulted in the permission to launch
the unit into production. With this commissioning the electric capacity of
the CHP-2 of Ufa will increase by 47 MW, and the heat capacity will rise by
35 Gcal/h. From Septrmber 1, 2011 the new unit started the power and
capacity supply to the Wholesale electricity and capacity market.
EVENTS AFTER THE REPORTING DATE
The Russian Government by its decision from 18.08.2011 set up the price-cap
for capacity price at the Competitive selection of capacity for 2012 at the
level of 2011.
On September 2, 2011 the Board of Directors of JSC 'RusHydro' summed up the
negotiation process by deciding to approve the deal of purchasing the LLC
'Energeticheskaya Sbytovaya Kompaniya Bashkortostana' part of the Group
OJSC 'Bashkirenergo'. The deal is expected to be finalized in September
2011.
The sale of the retail company of the Bashkirenergo Holding is mostly
dictated by the legislation requirement obliging to separate generation,
distribution and retail businesses. Moreover, shareholders and the Company
management having considered the limited growth potential of the retail
business in the environment where major power consumers gain access to the
wholesale electricity and capacity market decided to concentrate its
efforts to develop with electricity and heat generation and transmission
businesses.
OUTLOOKS
According to the management forecast the OJSC 'Bashkirenergo' 2011
financial results beat last year's results, subject to high of electricity
prices at OREM.
The sale of retail business would not seriously influence the profits of
the Company since mot if it is generated by the sales of power and capacity
to OREM along with its transportation. In the liberalized electricity
market financial and operational results of this activities are not
dependent on the control over retail business.
However the decision of the Government of to imply a zero growth of
capacity price for 2012 might have a negative impact on expected financial
results next year. Though the price on capacity in the Ural zone, not being
the zone with the price-cap set up by the Government, is still to be
determined by the Competitive selection of capacity for 2012.
OJSC BASHKIRENERGO AND SUBSIDARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2011 (UNAUDITED)
IN MILLIONS OF RUSSIAN ROUBLES
30/06/ 31/12/OJSC BASHKIRENERGO AND SUBSIDARIES
2011 2010
ASSETS
Non-current assets
Property, plant and equipment 50,826 47,675
Advances paid for acquisition of property, plant and
equipment 1,996 3,450
Inventories 168 183
Trade and other receivables 13 121
Other non-current assets 57 59
53,060 51,488
Current assets
Inventories 1,522 1,169
Trade and other receivables 2,576 2,658
Advances paid and prepaid expenses 381 427
Investments 28 42
Income tax prepaid 142 181
VAT recoverable and other taxes prepaid 1,726 1,272
Cash and cash equivalents 1,275 569
Assets classified as held for sale 2,453 -
10,103 6,318
TOTAL ASSETS 63,163 57,806
EQUITY AND LIABILITIES
Capital and reserves
Share capital 1,093 1,093
Treasury shares (282) (282)
Retained earnings 51,281 49,023
Equity attributable to owners of the parent company 52,092 49,834
Non-controlling interests - 285
TOTAL EQUITY 52,092 50,119
Non-current liabilities
Loans and borrowings 2,201 -
Employee benefit obligations 586 584
Deferred tax liabilities 1,418 1,549
Other non-current liabilities 249 81
4,454 2,214
Current liabilities
Loans and borrowings 232 160
Trade and other payables 2,414 1,203
Advances received from customers 1,026 2,230
Accrued expenses and provisions 458 935
Income tax payable 23 108
Other taxes payable 990 837
Liabilities directly associated with assets classified
as held for sale 1,474 -
6,617 5,473
TOTAL LIABILITIES 11,071 7,687
TOTAL EQUITY AND LIABILITIES 63,163 57,806
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED 30 JUNE 2011 (UNAUDITED)
IN MILLIONS OF RUSSIAN ROUBLES
Three months ended Six months endedOJSC BASHKIRENERGO AND SUBSIDARIES
June 30, June 30, June 30, June 30,
2011 2010 2011 2010
Revenue
Electricity and capacity 9,901 10,016 21,240 22,659
Heat energy 1,886 1,767 6,653 6,369
Other revenue 750 942 1,492 2,274
12,537 12,725 29,385 31,302
Operating expenses
Fuel (5,489) (4,677) (13,783) (12,292)
Purchase of electricity (869) (2,732) (1,992) (6,632)
Staff costs (2,092) (1,988) (4,210) (3,920)
Depreciation (821) (850) (1,735) (1,713)
Materials and spare parts (231) (385) (424) (644)
Repair and maintenance (665) (538) (1,017) (812)
Transmission of electricity (532) (255) (1,137) (518)
Charity (64) (207) (159) (303)
Water usage (134) (118) (282) (192)
Taxes, other than income tax (100) (102) (199) (203)
Rent 2 46 72 12
Loss on disposal of property,
plant and equipment 17 29 82 520
Change in provision for tax and
legal contingencies (33) (29) (70) (52)
Change in allowance for doubtful
receivables (87) 90 (46) (272)
Impairment of advances paid (3) 9 (23) 22
Other operating expenses (388) (440) (570) (1,169)
Operating profit 1,048 578 3,892 3,134
Finance income 1 - 1 -
Finance cost(17) (10) (29) (19)
Profit before income tax 1,032 568 3,864 3,115
Income tax (253) (234) (863) (771)
Profit from continuing
operations 779 334 3,001 2,344
(Losses)/ Profit from
discontinued operations (187) 7 331 40
PROFIT FOR THE PERIOD 592 341 3,332 2,384
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD 592 341 3,332 2,384
Attributable to:
Owners of the parent company 592 326 3,332 2,373
Non-controlling interests - 15 - 11
EARNINGS PER SHARE FROM
CONTINUING AND DISCONTINUED
OPERATIONS
Basic earnings per share (in
Roubles) 0.55 0.29 3.18 2.23
Diluted earnings per share (in
Roubles) 0.55 0.29 3.18 2.23
EARNINGS PER SHARE FROM
CONTINUING OPERATIONS
Basic earnings per share (in
Roubles) 0.73 0.28 2.86 2.14
Diluted earnings per share (in
Roubles) 0.73 0.28 2.86 2.14
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2011 (UNAUDITED)
IN MILLIONS OF RUSSIAN ROUBLES
Six months Six monthsOJSC 'Bashkirenergo' - is a major regional utility company in Russia,
ended ended
June 30, 2011 June 30, 2010
OPERATING ACTIVITIES
Profit before income tax 4,195 3,155
Adjustments for:
Depreciation 1,735 1,713
Change in provision for tax and
legal contingencies (82) (520)
Change in provision for unused
vacations and bonuses (219) 23
Loss on disposal of property,
plant and equipment (72) (12)
Change in allowance for doubtful
receivables 44 272
Change in employee benefits (21) 24
Finance costs (1) -
Finance income 32 19
Other adjustments 23 (22)
Operating cash flow before
movements in working capital 5,634 4,652
Change in inventories (439) (10)
Change in trade and other
receivables (1,477) (669)
Change in advances paid and
prepaid expenses (184) (920)
Change in taxes receivable, other
than income tax (619) 508
Change in trade and other
payables 2,165 935
Change in advances received from
customers (248) (685)
Change in taxes payable, other
than income tax 220 120
Net cash provided by operations 5,052 3,931
Income tax paid (1,244) (656)
Interest paid (20) (34)
Net cash generated from operating
activities 3,788 3,241
INVESTING ACTIVITIES
Disposal of Special Purpose
Entities (158) -
Purchase of property, plant and
equipment (3,735) (1,338)
Proceeds from disposal of
property, plant and equipment 278 205
Purchase of investments (32) (374)
Proceeds from disposal of
investments 34 406
Withdrawal of deposits - -
Dividends and interest received (1) -
Net cash generated from/(used in)
investing activities (3,614) (1,101)
FINANCING ACTIVITIES
Dividends paid (1,075) (1,237)
Repurchaseof ordinary shares - (282)
Proceeds from loans and
borrowings 6,149 9,781
Principal repayments on loans and
borrowings (3,876) (10,414)
Net cash used in financing
activities 1,198 (2,152)
Net increase/(decrease) in cash
and cash equivalents 1,372 (12)
Cash and cash equivalents at
beginning of the period 569 598
Cash and cash equivalents of the
disposal group (666) -
Cash and cash equivalents at end
of the period 1,275 586
ranked 5 by installed electric capacity and 7 by installed heat capacity
among the Russian territorial generating companies. By the amount of heat
output OJSC 'Bashkirenergo' is among the 10 major heat producing companies
in the world. OJSC 'Bashkirenergo has a dominating position at the
electricity and heat market of the Republic of Bashkortostan, which is one
of the top-ten developed regions of Russia. The OJSC 'Bashkirenergo' owns
companies which produce electricity and heat, conduct their transmission to
consumers and organize sales. The Installed electric capacity is 4,265 MW,
the installed heat capacity is 13,273 Gcal/h.
Contacts :
Head of Investor RelationsStatements contained in this press release may contain forward-looking
OJSC 'Bashkirenergo'
Maxim Kochetkov
tel: + 7 (495) 228-07-74
+7 (963) 990-67-66
kochetkov(at)bashkirenergo.ru
information that reflects management's current view and estimates of future
economic circumstances, industry conditions, company performance, and
financial results. Any statements, expectations, capabilities, plans and
assumptions contained in this press release that do not describe historical
facts such as statements regarding the declaration or payment of dividends,
the direction of future operations, the implementation of principal
operating and financing strategies and capital expenditure plans, the
factors or trends affecting financial condition, liquidity or results of
operations are forward-looking statements and involve a number of risks and
uncertainties. There is no guarantee that these results will actually
occur. The statements are based on many assumptions and factors, including
general economic and market conditions, industry conditions and operating
factors. Any changes in such assumptions or factors could cause actual
results to differ materially from current expectations.
End of Corporate News
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Language: English
Company: OJSC Bashkirenergo
Kommsomolskaya st,126
450096 Ufa
Russia
Phone: + 7 (347) 269-43-59
E-mail: secr(at)iap.bashkirenergo.ru
Internet: www.bashkirenergo.ru
ISIN: RU0009044242
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