Page 173 - RusRPTSept21

R3.7bn above the consensus) and net income was up 96% y/y at R18.9bn (exceeding the consensus forecast by 39%).
The key contributor to the y/y increase in consolidated EBITDA in 2Q21 was InterRAO's trading business, which accounted for 31% of the EBITDA growth in absolute terms. The company benefited from higher electricity exports (mainly to Finland and the Baltic countries) and solid price growth on the Nord Pool exchange (prices almost doubled y/y). In addition, the foreign assets division posted higher revenues amid a tariff increase in Georgia. In the domestic market, the company's financial performance was driven by higher power and heat output (up 20% and 5% y/y, respectively), stronger electricity prices in the first price zone (up 16% y/y), a number of CSAs reaching the period of higher capacity payments and an increase in the client base of InterRAO's supply companies. InterRAO's net cash position decreased from R233.6bn as of March 31 to R177bn, mainly due to the acquisition of 11 engineering companies in the quarter (for R37bn, excluding debt).
Below are the key highlights from the conference call:
· InterRAO guided 2021 EBITDA at R155bn (up 20% y/y), 9% above our forecast.
· The company raised its electricity exports target for this year from 15 kWh to 19bn kWh, which is close to the 2019 level (19.3 kWh).
· The capex guidance for 2021 was reiterated at R50.0bn (including VAT), which would mean a 46% y/y increase.
· As during the 1Q21 conference call, the company confirmed that it expects to serve as a contractor for the Vostok Oil project, at least for the first stage. This will not require investment from its own balance sheet. However, InterRAO's contract leaves open the possibility that it could become an investor at some point in the future.
· The management again confirmed that the government decree calling for state companies to distribute 50% of adjusted net income in dividends does not apply to InterRAO. The company will continue to pay out 25% of net income.
173 RUSSIA Country Report September 2021 www.intellinews.com