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Key Indicators of Adjusted Business Plan
for 2014 and Forecast for 2015-2018
This presentation is not an offer or invitation to make offers (advertisement) in respect of purchase or subscription to securities of Lenenergo. Neither the presentation, nor any part hereof, nor the fact of its representation or distribution serve as the basis for entering into any agreement or taking any investment decision; therefore, the presentation should not be relied upon in this respect. This presentation may contain estimates. The estimates are not based on actual circumstances and include statements in respect of the intentions, opinions or current expectations of JSC Lenenergo as regards the results of its activity, financial position, liquidity, prospects of growth, strategy and the industry, in which Lenenergo operates. Such estimates by their nature are characterized by presence of risks and uncertainty factors since they are related to the events and depend on the circumstances, which may fail to happen in the future. Lenenergo warns that the estimates are not a guarantee of the future parameters, and the actual results of Lenenergo activities, its financial position and liquidity, as well as development of the industry, in which it operates, may significantly differ from those included in the estimates contained herein. Besides, even if the results of the Company's activities, its financial position and liquidity, as well as the development of the industry, in which it operates, correspond to the estimates contained herein, such results and events are not indicative of the results and events in the future. This presentation contains the information received from third parties besides the official information on Lenenergo activities. This information has been received from the sources which are reliable in Lenenergo opinion. Nevertheless, we do not guarantee the accuracy of such information which may be reduced or incomplete. All opinions and estimates contained herein reflect our opinion as at the date of publication and are subject to change without notice. Lenenergo does not bear liability for the consequences of use of the opinions or estimates contained herein, or information incompleteness. Lenenergo does not undertake obligations in respect of revision or confirmation of the estimates and evaluations, as well as in respect of updating of the information contained herein.
Disclaimer
Company Overview
Assets
Unit 2011 2012 2013
Installed capacity MVA 21,427 21,952 23,059
Overhead TL 0.4-110 kV
on circuit km 39,783 40,053 40,408
Overhead TL 0.4-110 kV
on line km 36,587 36,859 37,214
Cable lines 0.4-110 kV km 19,554 20,400 21,156
Substations 35-110 kV Pcs
(MVA)
373 (13,742)
377 (1,969)
379 (14,570)
Transformer substations
6-35 kV
Pcs
(MVA))
14,770 (7,686)
15,025 (7,983)
15,531 (8,489)
Key Indicators
* Excluding assets of generation
Unit 31.12.2011 31.12.2012 31.12.2013
Productive
electricity supply mln kWh 28,975 30,007 29,613
Connected capacity MW 321 523 371*
Revenue RUB mln 36,958 36,273 39,902
EBITDA RUB mln 8,522 9,733 11,279
Net profit RUB mln 1,367 1,042 425
CAPEX (deployment) RUB mln 15,061 14,891 18,729
Personnel people 5,975 6,007 6,181
LENENERGO is the largest electricity distribution grid company (the operator of 0.4-110 kV networks), servicing the territory of St. Petersburg and the Leningrad Region. It is a natural monopoly which tariffs are set by regulating authorities – Federal Tariff Service (FTS) and regional regulators (REC)
Main types of activity: • electricity transmission and distribution services • technological connection of new consumers to grids
The share of Lenenergo in the electricity transmission market
(estimated) as of 31.12.2013 – 65.7%
The territory of service: St. Petersburg and the Leningrad Region
Major competitors: in St. Petersburg – JSC SPbES, in the Leningrad Region – JSC LOESK
Service territory
87.3 thousand km
Region’s population
6.2 mln people
Forecast _RAS_2014 | 1
53.41%
26.57%
7.15%
2.24% 3.40%
2.10%
5.14%
JSC Russian Grids
St. Petersburg (CPMC)
JSC IDGC of Ural
ENERGYO SOLUTIONS RUSSIA (CYPRUS) LIMITED
RUSENERGO FUND LIMITED
Citigroup Global Markets Limited
others
Share Capital and Organizational Structure
JSC Russian Grids The city of St. Petersburg (CPMC) Minority shareholders
Russian Federation ** as of the last closing date of the shareholder register – 23.12.2013
Share Capital Structure of Lenenergo**, % of ordinary shares
Organization Structure of Lenenergo
* On September 10, 2013 an additional issue of Lenenergo shares
with a possibility of placing 926,876,304 additional shares was registered.
Authorized Capital of Lenenergo, pcs (RUB)
Authorized capital 1,228,325,624.08
Ordinary shares* 1,135,061,313.08
Preferred shares 93,264,311
PRODUCTION UNITS (ELECTRICITY TRANSMISSION)
JSC Lenenergo
CJSC Tsarskoselskaya Energy Company (96.95%)*
CJSC Kurortenergo (98.13%)*
CJSC Lenenergospetsremont (100%)*
SUBSIDIARIES BRANCHES
* – from the authorized capital
electricity transmission services, technological connection
design and construction work in the field of power supply
Management of objects under construction
Service branch
JSC Energy Service Company Lenenergo (100%)*
energy services, services in energy saving and energy efficiency
53.41% (+ 7.15% - share of JSC IDGC of Ural) 26.57% 12.87% Vyborg power networks Gatchina power networks Kingisepp power networks St-Petersburg high-voltage power networks Novaya Ladoga power networks Suburban power networks Tikhvin power networks Cable network
JSC Energouchet (40%)*
manufacturing, installation and maintenance of energy measuring devices
Forecast _RAS_2014 | 2
High voltage grids (FSK) LENENERGO
Third-party grid organizations (TGOs)
Electricity trading companies
End users Generation
wholesale electricity market
Major TGOs in the region: in SPb – JSC SPbES, in LR – JSC LOESK
• Independent electricity trading companies • Guaranteeing suppliers: JSC PSK, LLC RSK-Energo,
LLC Rusenergosbyt, LLC Energy Holding • Direct consumers – participants of wholesale and
retail electricity markets
Payment of losses in Lenenergo networks
TGK-1, OGK-6, NW GRES, LAES, etc.
Consolidated revenues system*
electricity fee purchase of electricity
electricity transmission
fee
electricity transmission fee
electricity
electricity electricity
0.4-110 kV grids 0.4-10 kV grids > 220 kV grids
electricity
*RGR of TGOs and RGR of FGC comprise RGR of Lenenergo
Transmission services
Distribution grid company
electricity transmission fee
Market share of TGOs
.
.
.
Branch of FSK UES – MES of North-West
Wholesale electricity market
34%
Lenenergo Business Model: Cash and Electricity Flows
Forecast _RAS_2014 | 3
• The investment program included in the adjusted business plan is under approval in the Ministry of the Power Industry of the Russian Federation. The investment program is agreed by executive authorities and approved by Public expert advisory boards of the Tariff Committees of St. Petersburg and the Leningrad Region (February 2014)
• The plan of measures to prolong the tariff regulation period until 2019 has been developed
2014
Plan
(initial)
2014
Plan
(adjusted)
2014F
adjusted/
2014F initial
%
Revenue, including: 47,546 48,184 1,3%
- From electricity
distribution services 39,196 39,834 1,6%
- From technological
connection services 8,183 8,183 0,0%
- Other 167 168 0,6%
Costs 40,290 41,370 2,7%
Gross profit 7,256 6,814 -6,1%
Profit before taxes 4,292 4,454 3,8%
Net profit 2,649 2,763 4,3%
For reference:
ROE, % 3.45% 3.62% 0,17 p.p.
EBITDA 16,862 16,862 0,0%
EBITDA margin, % 35.5% 35.0% -0,5 п.п.
Debt/EBITDA 2.92 2.70 -
CAPEX (deployment) 25,864 25,864 0,0%
Key indicators of the adjusted business plan in comparison with its initial version
Key parameters of the business plan adjustment for 2014
• The adjusted business includes tariff decisions for 2014
Revenue in the adjusted business plan exceeds the initial level by 1.3%, cost - by 2.7%, net profit - by 4.3%
• The plan of measures on compensation of lost income has been developed by results of adoption of tariff decisions for 2014
Key factors of changes in net profit in the adjusted business plan: increase in revenue from electric power transmission services due to the growth of an average tariff for electric power transmission and the growth of income from identified non-contractual electricity consumption in the volume exceeding the cost growth, and a drop in the share of interest payable due to the credit portfolio reduction
On April 11, 2014 (Minutes # 30 of 16.04.2014) the Board of Directors of JSC Lenenergo made the decision to approve the adjusted business plan of the Company including the investment program for 2014 and to take into consideration forecasted indicators for 2015-2018
Grounds for Business Plan Adjustment
Forecast _RAS_2014 | 4
16,862
Further work with third-party grid organizations regarding not recognitions of the volume of rendered services (absence of confirmed rights for operated assets, calculations for the actual capacity, lack of metering devices on the borders of balance accessory)
During implementation of measures to compensate EBITDA drop the following performance is provided:
• Targets for the cost management program to reduce the cost of services of one unit of power equipment concerning the level of 2012 approved by the
Resolution # 100r of 22.10.2013 • Profitability of the Company’s activities, including from rendering services in electric power transmission • Debt/EBITDA does not exceed 3
14,415
+ 2,446
Revenue growth by RUB 644 mln
Income growth by RUB 442 mln
Expenses decrease by RUB 530 mln
Expenses decrease by RUB 877 mln
EBITDA Adjusted for Tariff Decisions
16,862
-2,446
EBITDA in Initial Business Plan 2014
Impact of Approved Tariff Decisions
EBITDA in Adjusted Business Plan 2014
Impact of Measures to Compensate
EBITDA Drop
Planned Measures to Compensate EBITDA Drop
Work with the regulator on adjustment of the maintenance rate from 01.07.2014 in St. Petersburg to bring the considered capacity balance in compliance with the balance approved by FTS of Russia
Work on the income increase from identified non-contractual electricity consumption
Reduction of purchasing electricity price taking into account actual dynamics for the fourth quarter of 2013
Total measures: RUB 2,493 mln
Expected EBITDA growth: RUB 2,446 mln*
* taking into account the growth of expenses for JSC FGC UES
services by RUB 47 mln
RUB mln
Measures to Compensate EBITDA Drop by Results of Tariff Regulation in 2014
Forecast _RAS_2014 | 5
CAPEX, RUB mln
EBITDA, RUB mln, EBITDA margin, %
Costs, RUB mln Revenue, RUB mln
Net profit, RUB mln
Dynamics of Key Indicators for the Last 5 Years
Net assets, RUB mln
51 627 56 144
76 225 76 341 82 195
2010 2011 2012 2013 2014 П
34 201 36 958 36 273 39 902
48 184
2010 2011 2012 2013 2014 П
27 758 31 758 32 830
36 429 41 370
2010 2011 2012 2013 2014 П
10 022 8 522
9 733 11 279
16 862
29% 23% 27% 28%
35%
2010 2011 2012 2013 2014 П
3 535
1 367 1 042
425
2 763
2010 2011 2012 2013 2014 П
15 813 15 061 14 891 18 729
25 864
2010 2011 2012 2013 2014 П
2012 2013
2014
adjusted
BP
Δ %
2014F/2013
Net assets 76,225 76,341 82,195 8%
Revenue, including: 36,273 39,902 48,184 21%
- From electricity
transmission services 28,816 33,207 39,834 20%
- From technological
connection services 7,282 6,515 8,183 26%
- Other 175 180 168 -7.0%
Costs 32,830 37,429 41,370 14%
Gross profit 3,443 3,473 6,814 96%
Profit before taxes 1,962 1,444 4,454 208%
Net profit 1,042 425 2,763 550%
For reference:
ROE, % 2.08% 0.27% 3.62% 3.35 p.p.
EBITDA* 9,925 11,279 16,862 49.0%
EBITDA margin, % 27.36% 28.3% 35.0% 6.7 p.p.
Debt/EBITDA 2.86 2.96 2.70 -
CAPEX (deployment) 14,891 18,729 25,864 38%
Key Indicators of the Adjusted Business Plan of Lenenergo for 2014
RUB mln
* Hereinafter the indicator is calculated in accordance with the methodology applied at formation of the business plan: EBITDA = Net profit + Income tax + Amortization + (Interest payable - Interest receivable)
Key Financial Indicators for 2014 under the Adjusted Business Plan
F F
F F
F F
Forecast _RAS_2014 | 6
27,172 27,222 28,176 28,307 29,211
11.36% 11.18% 10.92% 10.51% 10.18%
2010 2011 2012 2013 2014 П
645
321
523
371
609
2010 2011 2012 2013 2014 П
Target indicator of electricity losses by the end of 2018 –
8.68% to total
supply to network
Dynamics of Productive Supply (mln kWh) and Losses (%) in Comparable Conditions Dynamics of Connected Capacity, MW
Electricity Distribution Services
Index 2012 2013 2014F 2014F/ 2013,%
Productive supply of electric power, mln kWh 30,007 29,613 29,211 -1.4%
Productive supply of electric power, mln kWh (in comparable conditions)**
28,176 28,307 29,211 3.2%
Electricity losses in grids, % 10.37% 10.11% 10.18% 0.07 p.p.
Electricity losses in grids, % (in comparable conditions)**
10.92% 10.51% 10.18% -0.33 p.p.
Index 2012 2013 2014F 2014F/ 2013,%
Connected capacity, MW 523 371* 609 64%
Connections up to 15 kW, MW
49 62 199 221%
Technological Connection Services
* net of connection of generation assets to grids under 3 TC agreements with a total capacity of 400 MW
The size of connected capacity in 2014 will make 609 MW, 64% higher than in 2013. It is primarily associated with performance in 2014 of obligations under the technological connection agreement with FSUE Uniform Customer Group on the object Losevo-Kamennogorsk. Within implementation of the Plan of execution of current, accumulated and overdue obligations on technological connection the business plan provides for closing of the Company’s accumulated obligations up to 2016. Contracts up to 15 kW still prevail in the structure of obligations on the volume of connected capacity.
** Drop in productive electricity supply in 2014 is driven by termination of the “last mile” mechanism on the territory of St. Petersburg and the Leningrad Region on consumers directly connected to the grids of JSC FGC UES . The estimated volume of productive supply to consumers of “last mile” excluded from the balance of Lenenergo in 2014 will total 1,306 mln kWh. In comparable conditions the growth of productive supply by 3.2% is forecasted. Pursuant to the Program of energy saving and energy efficiency a drop in the share of electricity losses to total supply to network by 0.33 percentage points is planned
Key Operating Indicators for 2014 under the Adjusted Business Plan
F F
Forecast _RAS_2014 | 7
18.7%
6.0% 9.6% 9.6% 9.6% 9.6% 7.6%
30.6%
6.0% 12.5% 12.5% 12.5% 12.5% 10.5%
14,190 16,321 18,204 20,600 23,372 26,393 28,936
2013 2014 2015 2016 2017 2018 2019
22,852 26,676 29,728 34,301 39,610 45,702 52,711
2013 2014 2015 2016 2017 2018 2019
Subject of the Russian
Federation
Amount of invested capital,
RUB mln
Operating expenses Rate of return on old capital, %
Base level, RUB mln
Efficiency index, %
2012 2013 2014 2015 2016 2017 2018 2019
St. Petersburg 48,359 2,766 3% 1% 1% 1% 1% 1% 1% 1% 11%
Leningrad Region
23,865 2,468 3% 1% 1% 1% 1% 1% 1% 1% 11%
Tariff models are formed considering extension of the regulation period up to 2019 and in line with the forecast of social and economic development forecast of the Russian Federation prepared by the Ministry of Economic Development of Russia for 2014-2016 in which excess of the levels of tariff growth for electric power transmission in 2014-2019 set by the Russian Federation Government is admissible with a reservation for 2014 for St. Petersburg and the Leningrad Region, and is caused by large investment programs.
First regulatory period 2011 2012 2013 2014 2015 2016 2017 2018 2019
St. Petersburg Leningrad Region
Previously set
RAB «reboot»
Extension of the regulation period
Dynamics of Required Gross Revenues (RUB mln) and Tariff Growth Rate (%) for the Category “Other Consumers” in 2H
Approved Parameters of Tariff Regulation
RAB regulation
Growth of average joint operation tariff
17.5% 20.9% 9.5% 11.6% 11.8% 11.9% 11.0%
Growth of average joint operation tariff
-2.2% 17.4% 7.5% 9.0% 9.3% 9.3 % 8.3%
Tariff Regulation Framework
Forecast _RAS_2014 | 8
39,902 36,429
3,473 425
48,184 41,370
6,814 2,763
Выручка от реализации
Себестоимость Прибыль от реализации
Чистая прибыль
2013 2014 П
-6 446 -5 307
5 733 6 781
1 138 1 289
от прочей деятельности
от услуг по ТП
от услуг по передаче э/э
11,279
16,862
2013 2014 П
+21% +14% +96% +550%
+ 49%
EBITDA, RUB mln
EBITDA margin, %
28% 35%
EBITDA 16,862 100 %
Depreciation of FA&IA 9,898 59%
Interest payable – Interest receivable
2,510 15%
Income tax 1,691 10%
Net profit 2,763 16%
- =
425 2 763 +550%
Breakdown of Net Profit by Types of Activities, RUB mln
Net Profit 2014F
Factors of Planned Growth of Net Profit in 2014, RUB mln
Growth of planned revenue in 2014 by RUB 8,282 mln or 21% is primarily caused by increase in revenue from electricity transmission due to the growth of an average tariff.
2013 2014 П
+6,627
2,763
+1,655
-4,738
-203
-331
-672
425
Revenue from TC, other revenues
Growth of controllable
costs
Income tax growth
Net Profit 2013
Net profit margin
5.7%
Net profit margin
1.1%
The planned net profit for 2014 is primarily formed at the expense of profit from technological connection and income from identified non-contractual electricity consumption. Growth of net profit by x6.5 times to the level of 2013 is planned for 2014.
In comparison with initial in the corrected Business plan the revenue increased by 1,3% that is caused by growth of revenue from electricity distribution by 1,6% in connection with growth of a rate on the maintenance of networks across St. Petersburg from II HY for 27% in relation to the I HY. When updating the Business plan for 2014 the indicator of EBITDA didn't change.
Gross Profit and Net Profit Generation, RUB mln
Growth of revenue from electricity
transmission
Growth of uncontrollable
costs
Interest, other income and
expenses
from other activities from grid connection from electricity transmission
Sales revenue Costs Sales profit
Net profit
F
F
F
Forecast _RAS_2014 | 9
Financial Result Formation Plan for 2014
39,902 48,184 +21% 36,429 41,370 +14%
Factors of Growth of Uncontrollable Expenses in the Adjusted Business Plan for 2014
1.4% -9.4%
33,207 39,834
6,515 8,183
2013 2014 П
от услуг по передаче э/э от услуг по ТП
35,903 40,809
437 496
2013 2014 П
2014F initial
2014F Adjusted
2014 Adjusted/
2014 Initial,%
Uncontrollable expenses: 31,822 32,903 3% Purchased electricity to compensate losses 6,026 6,089 1%
Services of FGC UES on e/e transmission 6,514 6,642 2%
Services of other DGCs on e/e transmission 9,385 10,274 9%
Depreciation of fixed and intangible assets 9,898 9,898 0%
12.3 12.47 11.14
2012 2013 2014 П
Costs of services of other DGC’s on electric power transmission increased by RUB 889 mln (9%) are formed according to the approved tariff decision for 2014, and consider disagreements regarding application in calculations of the actual or declared capacity in connection with the choice of a tariff type (one-rate or double-rate) due to the lack of confirmed the rights for operated assets.
Performance of the Costs Management Program Revenue by Types of Activities*, RUB mln
Costs by Types of Activities*, RUB mln
Breakdown of Costs, RUB mln
* Including other business activities, revenue and costs of which are less than 1% of total amount
from grid connection
from electricity transmission
Planned overall effect of the costs management
program in 2014: RUB 1,365 mln
Unit Costs Per 1 C.U. in 2012 Prices, RUB thousand, Growth Rate, %
Within implementation of the requirements of the Grid Complex Development Strategy of the Russian Federation (RF Government Decree # 511-r of 03.04.2013)
Revenue and Expenses Formation Plan for 2014
F F
F
2013 2014 F 2014 F/ 2013.,
%
Uncontrollable expenses: 28,165 32,903 17% Purchased electricity to compensate losses 5,415 6,089 12% Services of FGC UES on e/e transmission 6,715 6,642 -1% Services of other DGCs on e/e transmission 7,774 10,274 32% Depreciation of fixed and intangible assets 8,261 9,898 20% Controllable expenses: 8,265 8,467 2% Personnel costs (Payroll, UST, pension fund fees) 3,981 4,214 6% Material costs 574 626 9% Industrial services 1,460 913 -37% Taxes and fees referred to expenses 500 796 59% IT, telecommunication 449 466 4% Rent 422 547 30% Other expenses 879 905 3% Total costs 36,429 41,370 14%
Forecast _RAS_2014 | 10
21,325 17,337 2,808
35,854
11,895
2,201
4,796
9,300
кредитный портфель на 01.01.2014
привлечение погашение кредитный портфель
на 31.12.2014
Операционные кредиты
Инвестиционные кредиты
40%
9%
36%
15% Сбербанк
Банк Россия
Облигационные займы
Новые кредиты
- +
Average Rate
8.94%
Credits and Loans (RUB mln), Debt/EBITDA
33,219
19,538
7,603
45,154
Total size of loans and credits, as well as net debt will increase in 2014 in comparison with 2013 due to the raise of credits and loans to fund the large-scale investment program. Thus when adjusting the business plan for 2014 the total size of loans and credits decreased in comparison with the initial one by 7%.
14,405 20,197 22,360 23,722 43,904 Net debt, RUB mln
1.40 2.36 2.25 2.10 2.60 Net debt/EBITDA
=
14,733
26,993 27,789 33,376
45,600 1.43
3.15 2.80 2.96 2.70
2010 2011 2012 2013 2014 П
Bonded Loans Parameters
Placed Issue in 2014
Bonded Loans Series 04
Exchange Bonds Series BО-01
Exchange Bonds
Volume RUB 3 bn RUB 3 bn RUB 10 bn
Rate, % 8.5 % 8.25%
Placement date 24.04.2012 17.04.2013
Maturity date 1820th day 1092th day
Term of offer 3 years without offer 3 years
Circulation period
5 years 3 years 10 years
In 2013 Prospectus of exchange bonds issues of four series was registered at par value of RUB 20 bn with a circulation period of 10 years
Planned Credit Portfolio Structure for the end of 2014
Sberbank
Bank of Russia
Bonded loans
New credits
Planned ratio Debt/EBITDA Is not exceeding the recommended level (3)
Agency Rating Assigned
Moody’s Ba2
(outlook – stable) Nov. 2009
Moody’s Interfax Rating Agency (rating on the national scale
Aa2.ru
(outlook – stable) Nov. 2009
Credit Rating
Confirmed in February 2014
Plan of Credit Resources Flow in 2014, RUB mln*
Raised Credit Portfolio as of 01.01.2014
Repaid Credit Portfolio as of 31.12.2014
Operating credits Investment credits
* on the sum of principal debt w/o accrued interest
Loan Portfolio and Debt Position Formation Plan for the end of 2014
F
Forecast _RAS_2014 | 11
1.5 5.7 8.1 8.1 11.0 7.4
0.9 1.2
2.2 5.6 3.3
1.8 5.5
2.0
11.6
16.3 15.1
12.8 7.9 5.7
4.0
3.0
5.3 4.7
8.9 8.9 11.1
22.4
2013 2014 П 2015 П 2016 П 2017 П 2018 П 2019 П
Прочие
Технологическое присоединение
Программы особой важности*
Новое строительство
Техническое перевооружение и реконструкция
Funding Sources of the Long-Term Investment Program, RUB mln with VAT
2013 2014F 2015F 2016F 2017F 2018F 2019F
Capital investments, RUB bn w/o VAT
18.7 25.9 30.0 28.4 24.5 24.2 24.3
Capacity input, МVA
907 1,992 2,508 2,781 2,758 1,729 1,757
Capacity input, km
1,846 2,604 2,591 3,133 1,949 2,320 2,943
* Program of Renovation of cable lines 6-110 kV in St. Petersburg, implementation of measures to prepare for the World football championship in Russia in 2018
19.3 32.2 34.2 33.8 29.6 29.6 29.4
2013 2014F 2015F 2016F 2017F 2018F 2019F
Own sources 4,992 12,813 13,748 12,208 12,205 12,813 20,411
Depreciation 1,903 5,809 6,463 7,100 7,791 8,450 9,110
Net profit 0 0 0 0 0 0 6,929
Other own sources 3,089 2,348 1,888 0 0 0 0
Additional issue of shares 1,770 993 0 0 0 0 0
Calculations with property 1,306 1,355 1,888 0 0 0 0
Lost income 12 0 0 0 0 0 0
VAT 2,533 4,656 5,398 5,108 4,414 4,364 4,371
Raised funds 11,820 19,360 20,486 21,582 17,372 16,815 8,959
Borrowings (credits and loans) 7,032 14,898 14,298 15,300 14,369 14,262 5,252
Advances on technological connection 4,788 4,462 5,624 5,692 3,003 2,553 3,707
Budget funding 0 0 564 590 0 0 0
Investment program, TOTAL 19,345 32,173 34,234 33,790 29,578 29,628 29,370
The investment program included in the structure of the adjusted business plan is now under approval in the Ministry of the Power Industry of the Russian Federation. The investment program is agreed by executive authorities and approved by Public expert advisory boards of the Tariff Committees of St. Petersburg and the Leningrad Region (February 2014). On 04.04.2014 public hearings of the draft of the long-term investment program were carried out at the Open Government of the Russian Federation. The program is approved and recommended for the statement. Funding sources of the investment program for 2014-2019 are calculated on the basis of tariff models across St. Petersburg and the Leningrad Region formed according to the forecast of social and economic development of the Russian Federation for 2014-2016, developed by the Ministry of Economic Development of the Russian Federation and considering the need of implementation of large-scale investment programs.
Long-Term Investment Program (Funding), RUB bn net of VAT Capital Investments and Capacity Input
Key challenges of the large-scale investment program: • renovation of the Company’s network assets • execution of obligations on technological connection, including to the preferential category of consumers • implementation of the Renovation Program of cable lines 6-110 kV in St. Petersburg (using federal budget funds received during the additional issue of JSC Rusgrids) • implementation of innovative projects and energy efficiency programs • creation of technological infrastructure to ensure functioning of competitive electricity and capacity markets
Long-term Investment Program for 2014-2019
Forecast _RAS_2014 | 12
2013 2014F 2015F 2016F 2017F 2018F 2019F
Other
Technological connection
Special programs*
New construction
Re-equipment and reconstruction
Net profit annually grows from 2014 to 2018 due to approach of the second half of the first regulation period in which smoothing is compensated - the loss arising in the first half of the first period of regulation is compensated.
Forecasted revenue, RUB mln
RUB mln
Forecasted EBITDA,RUB mln and EBITDA margin,%
Forecasted net profit, RUB mln
Consecutive growth of EBITDA is caused by essential increase in revenue net of costs (w/o amortization). Increase in revenue is thus driven by increase in revenue from rendering of services in electric power transmission. Debt/EBITDA ratio (credit potential) for 2013-2018 does not exceed 3 and decreases by the end of the first period of regulation.
2013 2014F 2015F 2016F 2017F 2018F
Revenue, including: 39,902 48,184 57,357 61,367 67,730 74,745
- from electricity transmission 33,207 39,834 44,498 51,832 60,123 70,059
- from technological connection 6,515 8,183 12,683 9,352 7,415 4,485
- from other activities 180 168 177 184 192 200
Costs 36,429 41,370 43,882 47,252 51,198 54,960
Gross profit 3,473 6,814 13,474 14,115 16,532 19,785
Profit before tax 1,444 4,454 8,454 8,282 9,833 12,256
Net profit 425 2,763 5,960 5,834 7,067 8,999
Net profit (loss) from e/e transmission -6,446 -5,307 -3,935 -1,535 1,337 5,691
EBITDA 11,279 16,862 24,827 26,945 30,833 35,399
ROE,% 0.27% 3.62% 7.12% 6.51% 7.47% 8.97%
Debt 33,376 45,600 60,082 71,112 78,661 81,465
Net debt 23,722 43,904 59,440 70,258 78,010 80,830
Debt/EBITDA 2.96 2.7 2.4 2.6 2.6 2.3
39,902 48,184
57,357 61,367 67,730 74,745
2013 2014 П 2015 П 2016 П 2017 П 2018 П
11,279 16,862
24,827 26,945 30,833
35,399
28% 35% 43% 44% 46% 47%
2013 2014 П 2015 П 2016 П 2017 П 2018 П
425
2,763
5,960 5,834 7,067
8,999
2013 2014 П 2015 П 2016 П 2017 П 2018 П
33,376 45,600
60,082 71,112 78,661 81,465
3.0 2.7
2.4 2.6 2.6 2.3
2013 2014 П 2015П 2016П 2017П 2018П
Forecasted debt, RUB mln and Debt/EBITDA
Forecast _RAS_2014 | 13
Key Financial Indicators of Lenenergo under the Business Plan for 2013-2018
2013 2014F 2015F 2016F 2017F 2018F 2013 2014F 2015F 2016F 2017F 2018F
2013 2014F 2015F 2016F 2017F 2018F 2013 2014F 2015F 2016F 2017F 2018F
JSC Lenenergo 1, Constitution Sq, St. Petersburg , Russia 196247 Head of Department for Corporate Governance and Shareholders Relationship Andrey Smolnikov Т./F. +7 (812) 595 31 76 [email protected]
Investor Relations Ulyana Davydova T. +7 (812) 494 39 06 F. +7 (812) 494 37 34 [email protected] [email protected]
www.lenenergo.ru
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