IR Releases

JSC Lenenergo published financial statements for FY 2012 under RAS

Formation of revenues and financial result

Sales revenues following the results of 12 months 2012 made RUB 36,273 mln and relative the similar period of the last year decrease in revenues totaled RUB 736 mln, or 2.0 %. Decrease in revenues occurred at the expense of rendering of grid connection services (- RUB 1,029 mln, or -12.4 %). Revenues from electric power transmission thus increased by RUB 290 mln (+1.0 %).

In 2011 revenues under contracts of grid connection to electric networks of JSC Lenenergo made RUB 8,311 mln (w/o VAT). The structure of revenues is presented as follows: 75 % (RUB 6,238 mln) make monetary contracts and 25 % (RUB 2,073 mln) – contracts with a property component on which an applicant for payment of grid connection transfers the created property. In 2011 works on connection of LLC Gazprom Invest West for the sum of RUB 2,309 mln that makes 37 % in annual revenues under monetary contracts are performed.

In 2012 revenues under contracts of grid connection made RUB 7,282 mln. In comparison with the previous period the total amount decreased by 12.4 %. Thus, performance under monetary contracts (without works on connection of LLC Gazprom Invest West) exceeded the indicator of 2011 by 38 % and made RUB 5,428 mln. Revenues under contracts with a property component decreased relative 2011 by 10.5 % and made RUB 1,854 mln.

The increase in revenues on electric power transmission (by 1 %) is caused by growth of productive supply by 1,032 mln kWh, or by 4 % for this period.

Revenues from other industrial activity slightly exceed the level of last year and make RUB 175 mln (growth by RUB 3 mln, or 1.7 %).

Cost of rendered services following the results of 12 months 2012 totaled RUB 32,830 mln, growth relative 12 months of the previous year made RUB 1,072 mln, or 3.4 %, at the expense of growth of depreciation charges (+ RUB 1,177 mln, or 23.1 %).

Gross profit of JSC Lenenergo following the results of 12 months 2012 decreased by RUB 1,809 mln, or 34.4 % relative the similar period of 2011 and made RUB 3,443 mln.

Net profit of the Company following the results of 12 months 2012 totaled RUB 1,234 mln. Deterioration of financial result relative the similar period of 2011 made RUB 183 mln, or 12.9 %. The main influence was rendered by a decrease in revenues from rendering of grid connection services and growth of cost of services.

Formation of EBITDA

EBITDA characterizing a cash flow generated by the Company before payment of taxes and interest, following the results of 12 months 2012 made RUB 10,221 mln and relative the similar previous reporting period increased by RUB 1,591mln, or 18.4 %.

RUB mln

The increase in EBITDA as at 31.12.2012 concerning its value for 12 months 2011 occurred mainly at the expense of growth of balance of other operations.

Growth of balance of other income and expenses (by RUB 2,223 mln) occurred due to:

- growth of income from the revealed non-metered and non-contractual electricity consumption (by RUB 820 mln net of expenses on the agent’s commission) and interest receivable (by RUB 239 mln).

- decrease in expenses on creation of a reserve on doubtful debts (by RUB 518 mln) and a reserve on other conditional liabilities (by RUB 366 mln), the sums of losses of past years revealed in the reporting period (RUB 215 mln).

Growth of EBITDA was accompanied by increase in the following components: depreciation and accrued interest. Thus net profit and profit tax were reduced.

Decrease in net profit is caused by growth of cost of services of the Company and decrease in revenues relative similar previous reporting period.

Decrease in accrued profit tax (by RUB 24 mln, or 2.5 %) occurred in the conditions of profit reduction before taxation.

Growth of accrued depreciation is caused by a gain of fixed assets at the expense of commissioning of objects during implementation of the investment program of the Company, and at the expense of revaluation of fixed assets made on 31.12.2011.

Increase in the sum of interest payable is associated with that for the reporting period charge of interest was made for a large sum of principal debt, and also with the growth of interest rates.

The share of EBITDA in revenues (EBITDA margin) increased by 4.9 percentage points and made 28.18 %. As a whole, the given change of the indicator is positively characterized from a viewpoint of assessment of the Company’s financial condition.

Credit portfolio and debt position

The increase in the sum on loans and credits taking into interest made RUB 796 mln (+2.9 %). The credits were involved for financing of investment activity of the Company, including for financing of works on renovation of cable lines in St. Petersburg and construction of a distributive network.

The average rate on credits in 12 months 2012 made 8.26 % that is higher than its value for the similar period of previous year on 0.46 percentage points.

Gain of Net debt was higher than growth of the sum on loans and credits at the expense of decrease in the cash balances for the period end (by RUB 3,633 mln, or 53.5 %). Short-term financial investments thus made RUB 2,266 mln (for the end of 2011 were absent).

Higher rate of a gain of EBITDA, in comparison with growth of Net debt, led to decrease in Net debt/EBITDA from 2.34 in 2011 to 2.19 in the current year.

Investment activity

Capital investments in 2012 totaled RUB 14,891 mln that is by RUB 170 mln, or for 1 % below the indicator of 2011 (RUB 15,061 mln).

For reference:

JSC Lenenergo is the largest distribution grid company (the operator of networks 0.4-110 kV), serving the territory of St. Petersburg and the Leningrad Region.

JSC Lenenergo share in the market of St. Petersburg and the Leningrad region in electric power transmission as at 31.12.2012 – 70.3 %

Accounting reporting of JSC Lenenergo is available on the Company website at:
http://www.lenenergo.ru/shareholders/fin_reports/