Page 157 - RusRPTDec21

Buy.
9mo21 – in line. Enel Russia’s 9mo21 results came in line with our expectations, affected by end of the DPM revenues for gas-fired assets and the delay of the first wind farm. The financials were favourably affected by 21% y/y production growth, a 15.5% y/y uptick of the RSV price, Azov wind farm DPM, finance expense slide and 1Q21 savings. Revenues increased 10% y/y. Adj EBITDA was RUB5,613mn, 3% above our forecasts and in line with the consensus. Net income grew 18% y/y in 3Q21 and declined 22% y/y to RUB2,451mn in 9mo21 – in line with our expectations and 3% below consensus. Capex stood at RUB15.6bn, net debt grew to RUB25.9bn, leverage was at 3.5x.
Conference call.
The Business Plan guidance was reiterated (RUB7.5bn EBITDA, RUB3.0bn net income).
Management notes the progress with the Kola wind farm. Nevertheless, the new COVID-19 outbreak and the unfavourable weather conditions are causing challenges to the commissioning on 1 May 2022 (while capex can increase), but the update is to come closer to FY21.
Dividend expectations were confirmed before the next strategy day: RUB3bn for 2021, 65% of IFRS net income for 2022, along with RUB3bn on top (postponed from 2020). With the probable further delays of Kola, we believe the RUB3bn postponed dividend payable in 2023 is under threat, as delay could create excessive leverage. We see no material risks for 2021 RUB3bn payment, though.
Company reiterated interest in renewables and is looking to undertake projects that create shareholder value.
On 16 November, Fortum disclosed that it would supply solar energy in the Orenburg region and in Bashkortostan to Uralkali through a bilateral agreement. The involved solar farms are the Bugulchanskaya solar farm (15MW, Bashkortostan), the Grachevskaya solar farm (10MW, Orenburg region) and the Pleshanovskaya SPP solar farm (10MW, Orenburg region), with a total capacity of 35MW. Fortum is actively involved in green bilateral contracts: in the last 1.5 years, the company has signed agreements with MMK, Novatek, Shekinoazot, Procter & Gamble, Baker Hughes and now Uralkali. At this stage, the green premiums remain limited at 2-5%; at the same time, this is due to progress further and to bring extra profitability, while Russian industrial consumers continue the race to secure the green and low carbon energy to improve Scope 2 emissions.
Unipro 9mo21 IFRS results – slightly below expectations. Unipro benefited from production growth, RSV prices uptick, expired DPM payments at its gas-fired units being replaced by Berezovskaya 3 DPM payments and the write-offs reduction. Revenues printed at RUB63,723mn, 16% higher y/y. Adj EBITDA was up 14% y/y to RUB21,954mn, 2% lower than our estimates due
157 RUSSIA Country Report December 2021 www.intellinews.com