Page 119 - RusRPTNov18

export (compared with the 5% growth of imports).
InterRAO CEO Boris Kovalchuk said on October 24 that the company is considering two options to partner with GE to localize gas turbine production. The first option would involve InterRAO obtaining Rostec's indirect stake in Russian Gas Turbines, a producer of 80 MW gas turbines, in which InterRAO has 25% and GE has 50%, with the remaining 25% owned by ODK, a Rostec subsidiary. InterRAO is currently seeking compensation from another structure of Rostec (Saturn) related to the repair of GTD-110 gas turbines installed at the Ivanovskiye CCGTs and could theoretically obtain ODK's stake in the JV as part of a settlement. The second option would involve creating a 50/50% JV with GE. InterRAO plans to use the localized equipment to participate in modernization tenders. The company will decide whether to purchase a license to produce the equipment in three to six months.
Mosenergo released its 9mo18 results under Russian Accounting Standards. Total revenues remained almost flat YoY, with growth of only 0.5%, while EBITDA slid 11% YoY to RUB 27,630mn. Net income printed at RUB 14,431mn, a drop of 19% YoY. The 3Q18 standalone data is negative: EBITDA was down 70% YoY at RUB 1,746mn, and the company reported a net loss of RUB 1,026mn, versus the profit last year, as the third quarter is traditionally weak for combined generators due to the mid-season lack of heat sales profits. The key takeaway is that, in line with our forecast, the company has started reporting a reduction in profitability (3Q18 net profit alone was RUB 1bn of net losses). This effect is going to continue being amplified in the next four quarters, we think, as more of the profitable DPM payments are set to expire. This has important implications for the investments case, in our view: we doubt that, ahead of the second massive investment cycle worth RUB 1.5tn and, coupled with the rapidly deteriorating profitability situation at Mosenergo, Gazprom (the controlling shareholder) would be eager to increase dividends at Mosenergo significantly. Bankers expect Mosenergo’s dividends for FY18F to deliver a 5.9% dividend yield and reiterate a Hold recommendation on the stock.
RusHydro released its 9mo18 operating results . Total electricity production printed at 99,618mn kWh, up 5.3% YoY, with a 5.1% YoY increase in the generation of hydro capacities (driven by water inflows) and 6.2% YoY growth from thermal capacities. In 3Q18, though, production at hydro capacities increased 4.3% YoY, compared with the 2.4% YoY upturn from thermal generation. In addition, the company reported electricity retail sales down 1.5% YoY to 14,706GWh. Heat sendout increased 4.6% YoY, reaching 19,574k GCal.
Unipro reported its 9mo18 operating results . Total electricity production printed at 32,832mn kWh, translating into an 8.3% YoY drop for 9mo18 (and 10.1% YoY for 3Q18 alone). Sendout was also down (8% YoY and 10.3% YoY, respectively). The company named System Operator dispatching, and maintenance works at Surgutskaya GRES, as the key reasons for the reduction. On the heat business side, production increased 3.1% YoY in 9mo18 to 1,460k GCal vs. the 6.1% growth in heat sendout.
FSK has released its 9mo18 RAS results. Total revenues printed at RUB 160,584mn, implying growth of 11.8% YoY, with the change of the accounting of the grid loss being the key driver. Apart from the volumes growth, grid connection revenues were still down, by 96% YoY, due to the timing and size
119 RUSSIA Country Report November 2018 www.intellinews.com