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DGAP-News: Bashkirenergo publishes its Q1 2012 IFRS financial results
ID: 648055
(firmenpresse) - EquityStory.RS, LLC-News: OJSC Bashkirenergo / Key word(s): Quarter
Results
Bashkirenergo publishes its Q1 2012 IFRS financial results
29.05.2012 / 16:50
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Bashkirenergo publishes its Q1 2012 IFRS financial results
May 29, 2012, Ufa (Russian Federation, Republic of Bashkortostan) - OJSC
'Bashkirenergo' (MICEX, RTS: BEGY, ISIN: RU0009044242) - publishes
consolidated financial statements for Q1 2012 prepared in accordance with
IFRS.
To comply with Russian legislation, on March 26, 2012 the Company's Board
of Directors had a meeting where the main terms and conditions of OJSC
'Bashkirenergo' reorganization were accepted for further approval at the
extraordinary General Meeting of Shareholders which will take place on June
20, 2012.
Shareholders are proposed to make a decision on reorganization of OJSC
'Bashkirenergo' to be performed in the form of a spin-off resulting in the
establishment of two companies: generating company called Open Joint-Stock
Company 'Bashenergoactiv' (JSC Bashenergoactiv) which will obtain the
shares of LLC 'Bashkir Generation Company', LLC 'Bashkir Heat Distribution
Grid', and LLC 'CCGT CHPP-5', and power grid company called Joint Stock
Company 'Bashkirian Power Grid Company' (JSC 'BPGC').
Simultaneously with the spin-off, JSC Bashenergoactiv is to merge with Open
Joint Stock Company 'INTER RAO UES' (JSC 'INTER RAO UES').
In connection with the above matter and in accordance with the rules for
preparation of IFRS statements, financial results of the generating sector
for Q1 2012 were presented separately as results of the discontinuing
operation.
KEY FINANCIAL RESULTS:
- The revenue from continuing operations declined by 8.5% to RUB 2,905
million compared to Q1 2011.
- Operating profit was RUB 631 million, up 38.7% YoY.
- OIBDA from continuing operations was RUB 973 million or 30% higher than
similar of the previous year.
- Profit and comprehensive income for 3 months of 2012 decreased by 50%
YoY and amounted to RUB 1,363 million mostly due to reduction of profit
from the discontinuing operation.
- Profit from continuing operations, showing the result of power grids,
grew by 58% YoY and reached RUB 537 million in Q1 2012. Profit from
discontinuing operation, representing the result of power generation,
reduced by 65.5% YoY to 826 mln RUB.
- The Company's debt/OIBDA ratio was at the level of 0.9 as of April 31,
2011.
KEY OPERATING RESULTS:
- OJSC 'Bashkirenergo' total power generation reduced by 1% YoY to
6,310.81 mln kWh.
- The capacity factor of OJSC 'Bashkirenergo' power stations was at a
level of 68.68% (decrease of 0.72 p.p. compared to Q1 2011).
- Heat output of the Company amounted to 9,694.8 thousand Gcal,
insignificantly reduces by 0.6% YoY.
- In Q1 2012 the specific consumption of equivalent fuel decreased by 2.8
g/kWh for electricity generation to 306.8 g/kWh, and by 1.3 kg/Gcal for
heat output to 140.4 kg/Gcal compared to the similar period of the
previous year.
- The transmitted electricity losses in the transmission grids reduced to
1.43% versus 1.54% in Q1 2011, distribution grid losses reduced from
12.01% to 10.99% YoY.
Andrey Makarov, CEO of OJSC 'Bashkirenergo' commented on the Company's
activity in Q1 2012: 'The first quarter of 2012 was pretty tough for the
power sector, as well as for OJSC 'Bashkirenergo'. Decrease of prices on
the wholesale market for electricity and capacity which started at the
beginning of 2012 on the back of measures taken by the government aimed at
stabilization of electricity prices brought the Company's financial
indicators under pressure. Present situation creates the challenge for the
Company on improvement of operating and financial efficiency, which the
Company meets pretty successfully. At the same time, OJSC 'Bashkirenergo'
keeps working on its reorganization and resolves related issues at the
present time. The Company stayed vertically-integrated for a long time
possessing generating assets, distribution and transmission grids.
Activities carried out on Company's reorganization are already reflected in
IFRS report for the 1st quarter. Thus, financial results of the generating
sector were represented separately as discontinuing operation. The final
decision on Company's spin-off resulting in the establishment of separate
generating and grid businesses, as well on general parameters of the
reorganization will be taken by the General Shareholders' Meeting on June
20».
RESULTS OVERVIEW
Price cutting on the wholesale market for electricity and power which
started at the beginning of 2012 year affected the power output of
'Bashkirenergo'. In the first quarter of 2012 the Company's power plants
produced 1% less of electric power than during similar period of the
previous year. In the meantime level of transmitted electricity losses
reduced significantly, by 102 b.p. in distribution grids and by 11 b.p. in
transmission grids. Such decline resulted from applying system approach to
planning and implementation of activities aimed at losses reduction.
The total Russian power output comprised 298.2 bln kWh in Q1 2012 up 2.9%
YoY, and the UPS Urals total power output increased by 1.8% amounting to
71.2 bln kWh. The OJSC 'Bashkirenergo' share in All-Russian power output
reached 2.11% and in the UPS Urals amounted to 8.86%.
Heat output for 3 months of 2012 reduced to 9,694.8 Gcal or by 0.6%
comparing with the similar period of the previous year due to a decrease in
demand from a large consumer and increase of the outside air average
temperature by 2.2º?.
Decrease in specific consumption of equivalent fuel for electricity
generation (-2.8 g/kWh YoY) and heat output (-1.3 kg/Gcal YoY), as well as
control over the fixed costs substantially contributed to the financial
results of OJSC 'Bashkirenergo'. Decline of fuel consumption rate was
conditioned by measures aimed at improvement of energy efficiency and
integration of modern and energy conserving equipment.
Key Financial Performance Indicators, in mln RUB
ChangeKey Operating Results
Indicator 3M 2012 3M 2011 %
Revenue 2,905 3,178 -9%
Operating expenses (2,274) (2,723) -16%
Operating Profit 631 455 39%
Profit before income tax 630 453 39%
Income tax expenses (93) ,(114) -18%
Profit/(losses) from continuing operations 537 339 58%
Profit from discontinuing operations 826 2,404 -66%
PROFIT AND COMPREHENSIVE INCOME 1,363 2,743 -50%
OIBDA 973 748 30%
OIBDA margin 22,5% 16% 6,5?.?.
Indicator ChangeREVENUE
3M 3M
2011 2010 %
Installed electric capacity, MW (average) 4,303 4,266 0.9%
Installed heat capacity, Gcal/h (average) 13,111 13,281 -1.3%
Electricity generation, mln kWh 6,310.81 6,376.86 -1%
Heat output, thousand Gcal 9,694.8 9,749 -0.6%
Electric capacity factor, % 68.68 69.5 -0.82%
Specific consumption of equivalent fuel for 306.8 309.6 -2.8
electricity generation, g/kWh
Specific consumption of equivalent fuel for heat 140.4 141.7 -1.3
output, kg/Gcal
Distribution grid losses, % 10.99% 12.01% 1.02 p.p.
Transmission grid losses, % 1.43% 1.54% -0.11 p.p.
Revenue declined by 8.5% from RUB 3,178 million in Q1 2011 to RUB 2,905
million in Q1 2012. The main factors affected revenue were price cutting on
the wholesale market for electricity and power, reduction of electricity
generation and decline of electric power sales on retail market.
OPERATING EXPENSES
The structure of operating expenses in Q1 2012 IFRS report do not include
power generating activity due to the fact that result of this segment is
accounted in a separate line 'profit from the discontinuing operation'.
Thus, compensation of losses to a guaranteeing supplier representing 36% of
expenses reduced by 26% YoY and amounted to RUB 816 million owing to
decline of prices for electric power losses. Staff costs (34.78% of
operating expenses) rose by 1.4% YoY to RUB 791 million. Depreciation grew
16.7% YoY and reached RUB 342 million (15% of operating expenses). Other
operating expenses (14% of operating expenses) were cut down by 40% YoY to
RUB 325 million.
Therefore, profit before tax grew by 39% YoY and reached RUB 630 million as
a result of power grid operating expenses decline by 16.5% YoY (to RUB
2,274 mln).
PROFIT FROM DISCONTINUING OPERATION
Profit from discontinuing operation, representing result of power
generating, was RUB 826 mln as of March 31, 2012 or 65% less than the
similar of the previous year. Such change was caused by decrease in sales
and price cutting on the wholesale market for electricity and power,
decline of heat output related with the higher temperature of the outside
air in comparison with the previous year and decrease in demand from a
large consumer.
FINANCIAL POSITION
As of the balance sheet date, the total assets of OJSC 'Bashkirenergo'
amounted to RUB 70,129 million increasing by 7.8% from the beginning of the
year. Power generating assets were recorded in a separate line 'assets from
discontinuing operation' which influenced the structure of assets in Q1
2012 IFRS report.
Hence, share of non-current assets reduced to 26% and amounted to RUB
18,126 million, while share of current assets grew to 74% comprising RUB
52,003 million.
The 50% decline to RUB 1,752 million in trade and other receivables was
mainly driven by receipt of payment for power provided in 2011.
Capital and reserves as of March 31, 2012 made up 81.3% of the total equity
and liabilities amounting to RUB 57,076 million, up 3% from the beginning
of the year. Liabilities of discontinuing operation became the largest
liability (RUB 9,027 million), along with deferred tax liabilities (RUB 970
million) and trade and other payables (RUB 970 million), comprising 12.8%,
1.4% and 1.4% of capital and liabilities respectively.
CAPITAL EXPENDITURE
Investment program of Q1 2012 reduced by 31% in comparison with the
previous year and amounted to RUB 546 million.
Nevertheless, construction of CCGT CHPP-5 with capacity of 440 MW and 290
Gcal/h continued. The expected term of CHPP-5 putting into operation is
2014 year.
The activity on efficiency improvement of all business segments is also
continued.
Implementation of automation system of centralized control (ASCC) in
Bashkir distribution grids continued. LLC 'BashRTS' has putted into use
ASCC in 11 large central heating units of Ufa. The ASCC was also
implemented in 2 large heating units of Neftekamsk. This project will make
it possible to cut operation expenses, improve economic indicators ofheating units, minimize human factor in technological processes and improve
equipment reliability.
Renovation of heat production facilities on OJSC Bashkirenergo enterprises
was in progress in Q1 2012 as well.
LLC 'BsshRES' extensively implements large project on installation of
automated system of energy accounting, and as a result 6,312 watthour
meters were installed in dozens of settlements by the beginning of April.
Only in February of 2012 economic benefit from new metering devices on the
retail market was RUB 1,247 thousands.
EVENTS AFTER THE REPORTING DATE
On April 27, 2012 the Board of directors of OJSC Bashkirenergo recommended
the Annual General Meeting of Shareholders to distribute the Company's net
profit in accordance with the FY2011 results amounting to RUB 6,664,990
thousand (less previously paid interim dividends for 9M results amounting
to RUB 1,005,310 thousand). Total dividend payout by the FY 2011 results on
A type preferred shares was recommended in amount of RUB 382,967 thousand,
so dividends on each A type preferred share will comprise RUB 8.57. Taking
into account previously paid interim dividends by 9M results in amount of
RUB 0.92 per each share, the final payment will comprise RUB 7.65 per each
A type preferred share.
OUTLOOKS
It is expected that growing rates of electricity prices shall be materially
lower than in 2011. Readjustment of tariffs will start from July 1, 2012.
The Federal Tariff Service stipulated 6% growth of tariffs for population
(or 3% year average) and 15% for other consumers (or 7.5% year average).
The set KOM prices for the 2012 capacity being 4% lower than in this year
makes the management take even more cost cutting measures of the fixed
costs in order to maintain the generation business margins.
On December 30, 2012 the State Committee on tariffs of RB determined
long-term regulation characteristics and established tariffs 5-year ahead
for OJSC 'BSK' This will make it possible to forecast financial results
with high degree of reliability.
It is expected revenue decline in 2012 against target indicators due to
retirement of property rented by LLC 'BashRTS' and changes in regulations
of the wholesale market.
At the beginning of 2012 five of six power-generating units at
Karmanovskaya hydro electric power plant (branch of OJSC 'Bashkirenergo')
were elected by the System Operator of the Unified Power System in the
competitive procedure and got the right to participate in the standard
primary frequency control. This will make it possible to improve
profitability of operations in the wholesale market for electricity and
power for both power plant and Company as the whole.
OJSC BASHKIRENERGO AND SUBSIDARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF MARCH 31, 2012 AND DECEMBER 31, 2011 (UNAUDITED)
IN MILLIONS OF RUSSIAN ROUBLES
31/03/ 31/03/OJSC BASHKIRENERGO AND SUBSIDARIES
2012 2011
ASSETS
Non-current assets
Fixed assets 18,039 52,213
Advances paid for acquisition of property, plant and
equipment 62 1,332
Inventories - 156
Trade and other receivables 3 9
Other non-current assets 22 59
18,126 53,769
Current assets
Inventories 303 1,300
Trade and other receivables 1,749 3,531
Advances paid and prepaid expenses 1,443 270
Investments - 2,006
Income tax prepaid 808 244
VAT recoverable and other taxes prepaid 207 960
Cash and cash equivalents 171 2,953
Assets on discontinuing operation 47,322 -
52,003 11,264
TOTAL ASSETS 70,129 65,033
EQUITY AND LIABILITIES
Capital and reserves
Share capital 1,093 1,093
Treasury shares (282) (282)
Retained earnings 56,265 54,902
Equity attributable to owners of the parent company 57,076 55,713
Non-controlling interests - -
TOTAL EQUITY 57,076 55,713
Non-current liabilities
Loans and borrowings - 2,265
Employee benefit obligations 236 625
Deferred tax liabilities 970 918
Other non-current liabilities 292 241
1,498 4,049
Current liabilities
Loans and borrowings - 3
Trade and other payables 970 2,312
Advances received from customers 640 1,036
Accrued expenses and provisions 453 847
Income tax payable - 29
Other taxes payable 465 1,044
Liabilities on discontinuing operation 9,027 -
11,555 5,271
TOTAL LIABILITIES 13,053 9,320
TOTAL EQUITY AND LIABILITIES 70,129 65,033
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2011 (UNAUDITED)
IN MILLIONS OF RUSSIAN ROUBLES
3 months 3 monthsOJSC BASHKIRENERGO AND SUBSIDARIES
ended ended
March 31, March 31,
2012 2011
Revenue
Electricity and capacity 2,831 3,104
Heat energy - -
Other revenue 74 74
2,905 3,178
Operating expenses
Compensation of losses to quarantining supplier (816) (1,106)
Staff costs (791) (780)
Depreciation (342) (293)
Repair and maintenance of equipment and grid (136) (230)
Materials and spare parts (44) (59)
Purchase of electricity and heat (35) (28)
Fuel (21) (23)
Taxes, other than income tax (9) (6)
Rent (7) (8)
Change in provision for tax and legal
contingencies 26 4
Change in provision for doubtful debts - (1)
Charity - (95)
Loss on disposal of property, plant and
equipment - -
Other operating expenses (99) (98)
(2,274) (2,723)
Operating profit 631 455
Finance income 4 2
Finance cost (5) (4)
Profit beforeincome tax 630 453
Income tax (93) (114)
Profit from continuing operations 537 339
Profit from discontinuing operations 826 2,404
TOTAL PROFIT AND COMPREHENSIVE INCOME FOR THE
PERIOD 1,363 2,743
Attributable to:
Owners of the parent company 1,363 2,743
Non-controlling interests - -
EARNINGS PER SHARE FROM CONTINUING AND
DISCONTINUING OPERATIONS
Basic and diluted earnings per share (in
Roubles) 1.29 2.57
EARNINGS PER SHARE FROM CONTINUING OPERATIONS
Basic and diluted earnings per share (in
Roubles) 0.49 0.25
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED MARCH 31, 2012 (UNAUDITED)
IN MILLIONS OF RUSSIAN ROUBLES
3 months 3 monthsOJSC 'Bashkirenergo' - is a major regional utility company in Russia,
ended March ended March
31, 2012 31, 2011
OPERATING ACTIVITIES
Profit before income tax 1,746 3,483
Adjustments for:
Depreciation 913 917
Change in provision for tax and
legal contingencies (28) (64)
Change in provision for unused
vacations and bonuses 9 49
Loss/(income) on disposal of
property, plant and equipment 2 (70)
Change in allowance for doubtful
receivables (50) 233
Income from the disposal of a
subsidiary 13 11
Finance income (40) (5)
Finance losses 1 10
Other adjustments
Operating cash flow before movements
in working capital 2,566 4,564
Change in inventories (320) (223)
Change in trade and other
receivables (1,164) (4,772)
Change in advances paid and prepaid
expenses (1,236) (133)
Change in taxes receivable, other
than income tax (28) (330)
Change in trade and other payables (717) 2,561
Change in advances received from
customers 1,420 (528)
Change in taxes payable, other than
income tax 159 1,075
Net cash provided by operations 680 2,214
Income tax paid (368) (844)
Interest paid - (8)
Net cash generated from operating
activities 312 1,362
INVESTING ACTIVITIES
Purchase of property, plant and
equipment (546) (790)
Proceeds from disposal of property,
plant and equipment - 269
Disposal of Special Purpose
Entities - (158)
Purchase of investments - (37)
Proceeds from disposal of
investments - 38
Interest on deposits 40 5
Net cash used in investing
activities (506) (673)
FINANCING ACTIVITIES
Dividends paid - -
Buy-back of ordinary shares - -
Proceeds from loans and borrowings - 2,790
Principal repayments on loans and
borrowings - (2,950)
Net cash received from (used in)
financing activities - (160)
Net increase/(decrease) in cash and
cash equivalents (194) 529
Cash and cash equivalents at
beginning of the period 2,953 569
Cash and cash equivalents classified
as disposal group (2,588) -
Cash and cash equivalents at end of
the period 171 1,098
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. The Installed electric capacity is 4,295 MW, the installed heat
capacity is 13,141 Gcal/h.
Contacts:
Head of Corporate CommunicationsStatements contained in this press release may contain forward-looking
OJSC 'Bashkirenergo'
Luiza Lesnaya
Tel: + 7 (347) 269-42-28
+ 7 (985) 160-97-76
lesnaya(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
End of News EquityStory.RS, LLC News-Service
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