EquityStory.RS, LLC-News: OJSC Bashkirenergo / Key word(s): Quarter
Results
OJSC Bashkirenergo: Bashkirenergo Net Profit for 1Q 2011 is up 34% to
2.7 bln RUR in accordance with IFRS
07.06.2011 / 07:30
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Bashkirenergo Net Profit for 1Q 2011 is up 34% to 2.7 bln RUR in accordance
with IFRS
June 7, 2011, Ufa (Russian Federation, Republic of Bashkortostan) – OJSC
–Bashkirenergo– (MICEX, RTS: BEGY) – publishes consolidated financial
statements for three month ended 31 March, 2011 prepared in accordance with
IFRS.
KEY FINANCIAL RESULTS:
– The Company–s revenue for the first three months of 2011 up 25% to
23,153 mln RUR (814 mln USD) compared to the same period of 2010.
– Operating profit increased by 34% compared to first quarter of 2010
reaching 3,489 mln RUR (123 mln USD).
– OIBDA was 4,406 mln RUR (155 mln USD) or 27% higher than in the same
period last year.
– Net profit was up 34% to 2,744 mln RUR (97 mln USD) compared to first
quarter of 2010 results.
– OIBDA margin stayed at the level of 19%.
– As at March 31, 2011 the Company had no financial debt.
KEY OPERATING RESULTS:
– OJSC –Bashkirenergo– total power generation in the first three months
of 2011 was 6,377 mln kWh, gaining 1% from the first quarter of 2010.
– The capacity factor of OJSC –Bashkirenergo– power stations reached 70%
(an increase of 4 b.p. compared to first quarter of 2010).
– Heat output of the Company in the first three months was down 1% to
9,749 thousand Gcal compared to first quarter of 2010.
– The specific consumption of equivalent fuel in the first three months
of 2011 fell 1.6 g/kWh for electricity generation to 309.6 g/kWh, and 1
kg/Gcal for heat output to 141.7 kg/Gcal.
– Volumes of electricity transmission through distribution grid was up 2%
to 4,810 mln kWh with volumes of electricity transmitted through
transmission grid down 1% to 5,797 mln kWh.
– The transmitted electricity losses in the first quarter of 2011 was up
from 1.45% to 1,51% in the transmission grid, with distribution grid
losses increasing from 11.7% to 12.1%.
– Power supply to consumers in the first quarter of 2011 is up 14% to
5,892 kWh compared to the same period last year.
Andrey Makarov, the CEO of OJSC –Bashkirenergo– commenting the financial
results of the first three months of 2011 has stated: –The financial and
operational results of OJSC –Bashkirenergo– for the first three months of
2011 were beyond the Company–s management expectations. The rise in
electricity and capacity prices at the Wholesale electricity and capacity
market with the increase of power prices for final consumers drove the
Company to strong financial results in the first quarter. The constant
process of searching for ways to reduce fixed and variable costs paid back
by the increase in net margin from 11% to 12% in the first quarter of
2010–.
1Q RESULT OVERVIEW
The first quarter of 2011 saw the continuing upside trend at the Russian
power market as a result of the recovery of Russian economy after 2008-
2009 recession. The 1% growth of power generation and a 14% rise in retail
power sales of OJSC –Bashkirenergo– is a clear evidence of this. The rise
in power prices at the Karmanovskaya GRES delivery point of the wholesale
electricity market was the key reason for power output. However the
combined cycle generation at combined heat and power stations (CHP) also
grew 4.9% in the first three months of 2011 or 0.4% if to consider all
thermal stations. This is the outcome of the heat output optimization
process between boilers of LLC –BashRTS– and CHPs. Partially these measures
resulted in a reduction of specific consumption of equivalent fuel for
electricity generation and heat output at CHPs and consequently their
higher load.
On March 9, 2011 OJSC –Bashkirenergo– fully met all of its obligations
before the bondholders of third series corporate bonds listed at MICEX
which saw full redemption afterwards. As the result the Company has entered
the second quarter with no financial debt.
The Board of Directors of OJSC –Bashkirenergo– on March 31, 2011 adopted
the Regulation on dividends policy of OJSC –Bashkirenergo–. In accordance
with the abovementioned Regulation, the Board of Directors, in their
recommendations to the General Shareholders Meeting on the amount of
dividend payment, will take into consideration that the level of dividend
per share should not be below 10% of the amount net profit for the
financial year, as determined in the consolidated financial statements
prepared in accordance in IFRS.
Key Financial Performance Indicators, in mln RUR
Financial Indicators 1Q 2011 1Q 2010 Change %
Revenue 23,153 18,572 25%
Operating expenses (19,664) (15,975) 24%
Operating Profit 3,489 2,597 34%
EBIT margin, % 15% 14% 1 b.p.
OIBDA 4,406 3,461 27%
OIBDA margin, % 19% 19% 0,4%
Profit before income tax 3,483 2,588 35%
Profit for the period 2,744 2,041 34%
Net margin, % 12% 11% 1 b.p.
CAPEX (financing) 790 494 60%
Key Operating Results
Operating Indicators 1Q 1Q Change
2011 2010 %
Installed electric capacity, MW 4,248 4,456 -5%
Installed heat capacity, Gcal/h 13,255 14,599 -9%
Electricity generation, mln kWh 6,377 6,306 1%
Heat output, thousand Gcal 9,749 9,827 -1%
Electric capacity factor, % 69.5% 65.5% 4 b.p.
Specific consumption of equivalent fuel for 309.6 311.2 -1%
electricity generation, g/kWh
Specific consumption of equivalent fuel for heat 141.7 142.2 0%
output, kg/Gcal
REVENUE
Revenues from electricity and capacity, which comprise the major part of
the consolidated revenues (76% of total revenue) saw a 39% growth in the
first quarter of 2011 up to 17,633 mln RUR (620 mln USD). Heat sales
revenues (21% of total revenue) gained 4% to 4,767 mln RUR (168 mln USD).
The total consolidated revenue from electricity, capacity, and heat sales
for the first three months of 2011 reached 23,153 mln RUR (814 mln USD)
exceeding by 25% the result of first three months of 2010.
Consolidated revenue structure, mln RUR.
1Q Share in 1Q Share in Change
2011 revenue % 2010 revenue,% %
Revenue 23,153 100% 18,572 100% 25%
Electricity and
capacity 17,633 76% 12,643 68% 39%
Heat energy 4,767 21% 4,602 25% 4%
Other revenue 753 3% 1,327 7% -43%
The main factors of revenue growth in first quarter of 2011 compared to
first quarter of 2010 were:
– Separate access of generating capacities and LLC ESKB to the wholesale
electricity and capacity market;
– Growth of electricity sales at the wholesale electricity and capacity
market;
– New electricity transmission tariffs which cover investments to the
grid;
– Increase in retail fixed margins.
OPERATING EXPENSES
Consolidated operating expenses of OJSC –Bashkirenergo– grew 24% in first
quarter of 2011 up to 19,664 mln RUR (692 mln USD). Variable costs
represented the major part, or 77%, of total Operating expenses amounting
to 15,073 mln RUR (530 mln USD). They mainly consisted of fuel costs (42%
of total expenses), expenses on purchased electricity (34% of total
expenses) as well as on water usage. Total variable costs hiked 30% to
first three months of 2011.
Fuel costs which increased by 9% to 8,294 mln RUR (292 mln USD) were driven
by a 15% gas price indexation, as well as by the boost in electricity
output by thermal power stations by 1%. The slower pace of growth of fuel
costs to gas price increase is explained by the reduction in specific
consumption of equivalent fuel.
Expenses on purchased electricity showed the biggest increase of 70% up to
6,642 mln RUR (234 mln USD) mostly due to separate record keeping of LLC
ESKB purchases of electricity and capacity at the wholesale market
Fixed costs which represented 23% of overall operating expenses totaled
4,591 mln RUR (161 mln USD), growing 5% compared to first quarter of 2010.
Staff costs being the largest item of fixed costs (11% of total operating
expenses) rose by 10% against the first quarter of 2010 to 2,224 mln RUR
(78 mln USD).
Repair and maintenance together with costs of materials and spare parts (3%
of operating expenses) lost 5% to first quarter of 2010 amounting to 509
mln RUR (18 mln USD) mostly due to a 30% cut in expenditure on repairs and
maintenance.
Other operating expenses fell 60% to 235 mln RUR (8 mln USD).
Structure of operating expenses, mln RUR.
1Q Share in 1Q Share in Change
2011 revenue % 2010 revenue,% %
Fuel 8,294 42% 7,615 48% 9%
Purchase of electricity 6,642 34% 3,900 24% 70%
Water usage 137 1% 74 0% 85%
Variable costs 15,073 77% 11,589 73% 30%
Staff costs 2,224 11% 2 025 13% 10%
Depreciation 917 5% 864 5% 6%
Materials and spare parts 181 1% 260 2% -30%
Repair and maintenance 328 2% 275 2% 19%
Power transmission costs 333 2% 263 2% 27%
Charity 95 0% 96 1% -1%
Taxes, other than income tax 99 1% 102 1% -3%
(profit)/ loss on disposal of
property, plant and equipment (70) 0% 34 0% -306%
Change in provision for tax and
legal contingencies (64) 0% (491) -3% -87%
Rent 34 0% 24 0% 42%
Change in allowance for
doubtful receivables 259 1% 362 2% -28%
Change in allowance for
impairment of inventories 20 0% (13) 0% -254%
Other operating expenses 235 1% 585 4% -60%
Fixed costs 4,591 23% 4,386 27% 5%
Operating expenses 19,664 100% 15,975 100% 23%
FINANCIAL POSITION
As of the balance sheet date, the total assets of OJSC –Bashkirenergo–
amounted to 62,526 mln RUR (2,199 mln USD).
The share of non-current assets exceeded 82% in the asset structure and
totalled 51,025 mln RUR (1,689 mln USD), while the share of current assets
was 18% or 11,502 mln RUR (405 mln USD). The first three months of 2011 saw
the 82% rise in current assets due to a 163% increase of trade and
receivables as the result of generating capacities and the retail company
accessing thewholesale market. For the same reasons the advances received
from customers grew 188% to 3,461 (122 mln USD) in the first quarter of
2011.
Capital and reserves represented 84% of the total equity and liabilities
amounting to 52,577 mln RUR (1,849 mln USD).
By the end of the third quarter of 2011 the share of current liabilities
was 12% or 7,751 mln RUR (273 mln USD), while the non-current liabilities
had the share of 4% or 2,198 mln RUR (77 mln USD).
As at March 31, 2011 the Company had no financial debt.
CAPITAL EXPENDITURE
The capital expenditure in the first quarter of 2011 grew 60% to 790 mln
RUR, compared to the same period last year.
On March 1, 2011 a STGU-25 power unit with nominal capacity of 22.5 MW was
commissioned at the UFA CHP-1. In the second quarter on April 27 another
power unit of 16MW and 88 Gcal/h of capacity saw commissioning at
Zauralskaya CHP.
EVENTS AFTER THE REPORTING DATE
On April 29, 2011 the Board of Directors of OJSC –Bashkirenergo–
recommended to the AGM to allocate 1,085 mln RUR or 39% of net profit to
dividend payment, and 472 mln RUR to finance investment projects. Subject
to AGM approval the dividend payment to an ordinary share would be 0.944
RUR (2% dividend yield), and 2.01 RUR to preference share (4% dividend
yield).
On the same day the Board of Directors took the decision to renew the
construction of the SGU CHP-5 in Ufa (440 MW, 290 Gcal/h) with the project
expense of 14 bln RUR (5,4 bln RUR is already financed). The commissioning
of the CHP-5 is expected in 2013. This project is planned to be financed
through loans and borrowing taking advantage of low interest rates the
fixed income market can offer now.
On May 6, 2011 announced the reorganization of OJSC –Sistema-Invest–, a
subsidiary of JSFC –Sistema–, by merging into it CJSC –Bashkir Integrated
Energy Systems–, CJSC –UNKH-EnergoInvest–, CJSC –UNPZ-EnergoInvest– and
CJSC –Novoil-EnergoInvest–, which together owned 50.17% of ordinary shares
of OJSC –Bashkirenergo– (47.87% of its charter capital).
On May 17, 2011, a state-owned INTER RAO UES completed its placement of
additional shares through which it gained control over 22,23% of OJSC
–Bashkirenergo– ordinary shares from a state-owned –FGC UES–, JSC.
OUTLOOK FOR 2011
According to the management forecast the OJSC –Bashkirenergo– 2011
financial results beat last year–s results, subject to growing of
electricity prices at OREM.
The spin-off of grid assets is supposed to be completed by the end of 2011.
The management is preparing its proposals for the Board of Directors and
the General Shareholders Meeting.
The Company–s IFRS consolidated financial statements can be found at the
Company–s web-site at:
http://www.bashkirenergo.ru/investor/financial%20reports/IFRS/
OJSC –Bashkirenergo– – is a major regional utility company in Russia,
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 4 248 MW,
the installed heat capacity is 13 255 Gcal/h.
Contacts :
Head of Investor Relations
OJSC --Bashkirenergo--
Maxim Kochetkov
tel: + 7 (495) 228-07-74
+7 (963) 990-67-66
kochetkov@bashkirenergo.ru
Statements contained in this press release may contain forward-looking
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 orpayment 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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07.06.2011 Dissemination of a Corporate News, transmitted by
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Language: English
Company: OJSC Bashkirenergo
Kommsomolskaya st,126
450096 Ufa
Russland
Phone: + 7 (347) 269-43-59
E-mail: secr@iap.bashkirenergo.ru
Internet: www.bashkirenergo.ru
ISIN: RU0009044242
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