Page 156 - RusRPTSept22

representative office in Russia by the end of the 2022 and cutting down all staff, including technical support teams, according to Kommersant daily citing unnamed sources. As followed by bne IntelliNews, after the departure of Nokia and Ericsson due to the fallout from the military invasion of Ukraine, the Russian TMT market is turning to Indian, Chinese and Israeli producers. According to Kommersant, Ericsson employs over 560 people in Russia and has a share of about 20% in the Russian telecom equipment market. The largest B2B clients in the country are MTS (Mobile TeleSystems, anchor asset of AFK Sistema investment conglomerate) and Tele2 (mobile operator controlled by state integrated telecom major Rostelecom). Analysts surveyed by the daily believe that mobile and network operators could face difficulties servicing their base stations and other critical infrastructure equipment should Ericsson completely shut down technical support.
9.2.10 Utilities & Renewables corporate news
Unipro released unaudited 1H22 results together with a management presentation and held a conference call. Numbers came strong, as was attested by RAS and operating results published previously. We highlight that 2Q22 adjusted EBITDA stood at Rb9.6bn (+21% y/y), while net profit was up 29% to Rb6.4bn. Results were particularly solid, due to a hike in power production, capacity and spot price increase and DPM payments at Berezovskaya. The company posted a non-cash impairment charge of Rb19.8b – linked to changing macroeconomic forecasts and geopolitical situation.
FSK released the swap rates for Rosseti ord/pref into FSK ord shares.
The rates are consistent with buyout price levels announced earlier – 0.09040/0.60580 Rosseti ords will be converted into 1 share of FSK, for prefs – the rate is 0.09040/1.27300. The unexpected announcement two weeks ago of consolidation of Rosseti into FSK led to some price spikes especially in Rosseti. The hikes were a bit perplexing, as we see few positive developments – 1) prospective growth in liquidity, 2) potential cost cutting at HQ level, due to a merger, otherwise, consolidation does not change the business model in power grids and does not make them more efficient.
Trading of Rosseti shares may be suspended prior to consolidation (this may occur around the end of the year), hence there could be a temporary break in liquidity for Rosseti’s existing shareholders. We also highlight that besides Rosseti, several other companies are going to be consolidated into FSK. We are particularly concerned about the valuation of DVEUK (at around Rb35bn), such a steep assessment presents a value dilution risk to minorities.
Finland's Fennovoima Oy, customer of nuclear power corporation Rosatom in the Hanhikivi-1 nuclear power plant project, has filed a €2bn lawsuit against the Russian company, Managing Director Joachim Specht
156 RUSSIA Country Report September 2022 www.intellinews.com