Page 187 - RusRPTMay21

· Consolidated revenue fell 5% y/y (to $1.99bn) and EBITDA fell 5% y/y (to $0.88bn; 44% margin)
· This suggests improvement vs the previous quarter and an increase in revenue and EBITDA in constant currency (+4%), which, in consolidated numbers, was offset by weaker local currencies vs $
· In local currencies, there was sequential improvement in the largest country units, including in Russia. In Russia, total revenue returned to growth (+1% y/y in ruble terms), mostly driven by an increase in handset sales (+24%) and fixed-line revenue (+8%); mobile service revenue still fell 2% (slight improvement vs -4% in 4Q20). This was not enough yet to allow for EBITDA rise (dropped 5%)
· Consolidated net income grew 21% y/y (to $0.13bn) helped by a drop in interest costs
· Equity FCF for 1Q21 stood at around zero (negative $0.01bn vs positive $0.1bn in 1Q20) with CapEx pre-IFRS 16 at 21% revenue (up y/y from 18%)
· Guidance for 2021 – tweaked up a notch to mid-single-digit revenue and EBITDA growth (on constant FX) vs previous low/mid. CapEx intensity was reiterated at 22-24%.
9.2.10 Utilities & renewables corporate news
Enel Russia's 1Q21 results were significantly better than analysts had expected, driven by strict cost control and a reserves release. However, underlying profit was still on a downward trend as coal-fired capacity was offloaded and DPM-driven profitability of gas-fired capacities expired from the beginning of the year.
With no dividends for 2020, due to their postponement to 2023, we do not believe the market is likely to pay attention to the consensus beat. We maintain our Hold recommendation, based on an ETR of 8% to a 12-month Target Price of RUB 0.85. The stock is an example of how the green transformation utilities require can bring short-term difficulties for financial viability.
1Q21 – Better than expected due to costs control. Enel Russia's downward EBITDA trend in 1Q21 was a well-anticipated event, but the numbers exceeded our conservative forecasts. Total revenues increased 2% YoY to RUB 12,289mn, driven by the slump of capacity revenues as DPM ending for both CCGT units was fully offset by production growth of 15% YoY and electricity price recovery. Adjusted EBITDA decreased 26% YoY, printing RUB 2,451mn. However, that significantly – by 43% – exceeded our expectations due to a reserves release and robust cost control during the quarter. In 1Q20, Enel
187 RUSSIA Country Report May 2021 www.intellinews.com