Page 162 - RusRPTNov21

quarter, while COGS was up 7.7% y/y to RUB15.6bn. The company reported a loss from sales of RUB141mn in 3Q21 vs. a RUB525mn loss from sales in 3Q20. The bottom line came in positive at RUB24mn vs. a net loss of RUB469mn in 3Q20. Electricity consumption in UES of Volga was up 3.5% y/y to 25mn MWh in 3Q21, which explains in part the strong growth on the company’s top line.
Unipro reported quite strong 3Q21 RAS results 28 October. The improvements in the company’s financials were mostly due to the favorable pricing environment, as well as to the decent operating results for the quarter. The company saw its revenue increase 26.8% YoY to RUB 22.1bn in 3Q21 primarily because of the supportive pricing environment, with prices in the European part of Russia up 18.9% YoY and the KOM price up c. 20% YoY. Electricity generation also surged 11.6% YoY to 9.9mn MWh. Additionally, revenue from the capacity delivery agreements (CDA) for Unit 3 of Berezovskaya GRES should have offset the negative impact from the expiration of CDAs for Surgut GRES-2, Yaiva GRES and Shatura GRES. UPRO’s profit from sales was up 41.9% YoY to RUB 5.4bn in 3Q21, resulting in a 30.9% YoY rise in net income to RUB 4.3bn.
It seemed Enel Russia was finally on track to deliver on its ESG-friendly strategy: no coal-fired assets are in the portfolio, the Azov wind farm launched in May 2021, and a second wind project, Kola, in the Murmansk region, is due for launch in 2022. However, management has said Kola is facing challenges due to a new COVID-19 outbreak and weather conditions. Although management has reiterated both its profitability and dividend guidance, and the 9.8% DY for 2021F is secured, we see risks to the elevated 18.5% yield for 2022F (which includes the postponed dividend for 2020), as it is highly dependent on the commissioning of the second wind farm and capex. Our unchanged 12-month Target Price of RUB1.00 implies an ETR of 25% and a Buy recommendation. 9mo21 – in line with expectations. Enel Russia’s 9mo21 IFRS results came well in line with our expectations (affected by the well flagged end of the DPM revenues for two gas-fired assets and the delay launching the first wind farm), and proved the recovery of net income, as we had anticipated. The financials were favourably affected by the impressive operating results, with 21% y/y production growth in 9mo21, a 15.5% y/y uptick of the RSV price in the regions of Enel Russia's operation, the operation of the Azov wind farm from 1 May 2021, and the favourable moderation of finance expenses on top of the 1Q21 savings. Thus, the company reported RUB35,148mn of revenues in 9mo21, a 10% y/y increase, in line with our and Bloomberg consensus estimates. Total costs climbed 17.5% y/y, with fuel cost growth of 28% y/y due to higher production, personnel costs adding 6% y/y, manageable costs flat and non-manageable costs rising 8% y/y. Adjusted EBITDA printed at RUB5,613mn, 3% above our forecasts and in line with the consensus. Net finance expenses stood at negative RUB147mn in 9mo21 (vs. negative RUB971mn in 9mo21), implying net income grew 18% y/y in 3Q21 and declined 22% y/y to RUB2,451mn in 9mo21 – fully in line with our expectations and 3% below consensus. Capex stood at RUB15.6bn, vs. net debt growth to RUB25.9bn, and thus leverage was at 3.5x – excessive at face value, but manageable once the Murmansk plant comes online and starts contributing its profits to the group.
162 RUSSIA Country Report November 2021 www.intellinews.com