Page 170 - RusRPTApr21

imply some downside to our estimate of VEON’s equity FCF for 2021.
9.2.10 Utilities & renewables corporate news
Enel Russia reported its 4Q20 IFRS results 16 March. The results disclosed declines on the top and bottom lines during the quarter, as well as a drop in EBITDA. The company saw revenue drop 8.1% y/y to RUB12bn after electricity generation dropped 5.6% y/y to 5.2mn MWh during the quarter. Fluctuations in electricity prices in the European part of Russia (-2.3% y/y) in 4Q20 put additional pressure on the top line. As a result, electricity sales were down 9.8% y/y to RUB7.2bn, capacity sales were down 2.7% y/y to RUB3.7bn and heat revenue was down 13.3% y/y to RUB0.7bn in 4Q20. Revenue was almost in line with our expectation (-0.7%) but 1.7% y/y lower than Bloomberg estimates. ENRU saw EBITDA drop 25.6% y/y to RUB1.7bn in 4Q20. The company’s FY20 EBITDA came in at RUB9bn, lower than forecast in ENRU’s updated strategy (RUB9.9bn), 7.3% lower than our expectation and 6.5% y/y below Bloomberg consensus. The core reason for the weaker-than-expected results is the recognition in 4Q20 of a RUB0.6bn impairment from construction in progress. Net income was down 46.7% y/y to RUB0.5bn in 4Q20 but up 4.1x to RUB3.6bn in FY20. The bottom line came in RUB1bn below the company’s guidance for the year, and the final figure for 2020 was 29.9% and 22.6% weaker than our estimate and Bloomberg consensus.
RusHydro was discussing the scheme for financing the second line of Pevek-Bilibino. According to Roman Berdnikov, a member of RusHydro’s Board, RusHydro opposes the additional share issue and is in talks with the Ministry of Finance about joint financing with the government with no decision having been made yet. At the same time, according to Deputy Minister of Energy Evgeny Grabchak, in an interview with RIA Novosti, MinFin is assessing the possibility of RusHydro financing the project from its own funds. According to RusHydro, the line could cost RUB 17.7bn, with the first stage of construction initially expected to start in 1Q21. This line is expected to supply Bilibino from the floating nuclear station as well as provide electricity to the consumers of the Chaun-Bilibino energy power centre and the Baimsk ore zone.
CEO of Enel Russia Stephane Zweguintzow confirmed that the company was aiming to commission its Azov and Kolsk wind projects in June 2021 and May 2022, respectively. The company is assessing the possibility of applying to the Market Council to reduce the fines for the delays further. Along with that, management noted the possibility of expanding the renewables portfolio by acquiring already operating assets, but construction from scratch is the preferred option that the company has been undertaking (and is looking for). At the same time, the company does not intend to acquire thermal generation assets. Besides, in line with its parent company Enel, Enel Russia is assessing green hydrogen projects at its renewable capacities, and the current discussions with Rosnano are at the pre-feasibility stage, according to
170 RUSSIA Country Report April 2021 www.intellinews.com