RusHydro announces 1H 2014 IFRS results

EBITDA growth is related to moderate growth of operating expenses, favorable pricing conditions on the “day-ahead” market, improvement of DRSK financial results due to extension of ‘last mile’ agreements.

In the 1st half of 2014, the Group’s net profit increased by 97.2% to RUB 21,336 mn compared to RUB 10,818 mn for the same period of the previous year. Adjusted net profit in the reporting period amounted to RUB 24,334 mn, a 5.6% increase as compared to the same period of the previous year. The difference between the reported and adjusted profit is attributed mainly to the following non-cash effects (before the income tax):

     accrual of impairment of fixed assets in the amount of RUB 1,696 mn;
     accrual of impairment of accounts receivable in the amount of RUB 1,446 mn resulting from analysis of past due receivables and estimation of their collectability;
     impairment of financial assets available for sale in the amount of RUB 450 mn, including shares of JSC INTER RAO UES in the amount of RUB 257 mn due to decline in their market value.

Key indicators of RusHydro Group’s financial position

As of June 30, 2014, the Group's assets increased by RUB 31,368 mn to RUB 883,414 mn against the comparable figure as at December 31, 2013. Change in assets is primarily attributable to increase in fixed assets of the Group increase in cash and cash equivalents on the banks accounts, decrease in short-term deposits value and increase in accounts receivable.

As a result of acquisition of 3.39% of the Company’s own shares via a swap for 25% minus 1 share stake in JSC Krasnoyarskaya HPP between JSC Hydroinvest, 100% subsidiary of RusHydro, and JSC Eurosibenergo, investment in an associate JSC Krasnoyarskaya HPP as of June 30, 2014, has been reclassified to non-current assets classified as held for sale. The transaction was closed in July 2014.

As at the end of the reporting period the Group's liabilities increased by RUB 14,954 mn from December 31, 2013, to RUB 270,293 mn. Change in the liabilities was mainly a result of obtaining a long-term loan from European Bank for Reconstruction and Development (EBRD) in the amount of RUB 3,530 mn in January 2014, and a long-term loan in the amount of RUB 2,776 mn secured from Sberbank in April, 2014, to finance current operating, financial and investment activities of the Company, and a short-term loans secured from Gazprombank, Sberbank. VTB Bank and Alfa-bank.

Events after the reporting date

     In July RusHydro Group acquired 3.39% of its own shares. The stake was obtained by JSC Hydroinvest, 100% subsidiary of RusHydro, via a swap for 25% minus 1 share stake in JSC Krasnoyarskaya HPP with JSC Eurosibenergo. No cash was involved in the transaction.
     In August the Company’s Board of Directors elected Mikhail Poluboyarinov as Chairman of the Board, Viktor Danilov-Danilyan as Deputy Chairman of the Board and formed new composition of the Board’s committees.