Page 155 - RusRPTFeb23

9.2.10 Utilities & Renewables corporate news
The main stages of power unility Rosseti's reorganisation have been completed, Russia's direct stake in the authorized capital of the merged company is 75.000048%, the company said in a statement late on January 10. “As a result of the reorganisation, the Russian Federation's direct share in the authorized capital of the merged company Rosseti is 75.000048%. It was achieved, among other things, through the redemption of a part of shares in Federal Grid Company–Rosseti previously held by Rosseti, a public joint stock company,” the statement read. Information about the operation termination of Rosseti, as well as Far Eastern Energy Management Company, was entered into the Unified State Register of Legal Entities from January 9, 2023, the company also said. In July 2022, state-owned power grid operator Rosseti and its subsidiary Federal Grid Company of Unified Energy System (FGC UES) approved a merger on the basis of FGC UES. The subsidiary was to incorporate Rosseti, DVEUK, Tomsk Trunk Grids, and Kuban Trunk Grids.
Russian utility OGK-2 published its 4Q22 operating results. Gross electricity output increased 2.5% y/y to 12,785mn kWh in 4Q22, while gross heat output rose 6.5% y/y to 1,708k Gcal. Gross electricity output in 2022 was down 2.6% y/y, with heat output down 2.2%. After two consecutive weak quarters, OGK-2's gross electricity output rebounded in 4Q22 - output grew 2.5% y/y after dropping 13.2% in 3Q22 and 12.9% in 2Q22. We assume that this owed to the completion of planned maintenance at certain facilities and more preferable weather conditions. OGK-2's electricity output dynamics were better than those of the United Power System (UPS) - the company posted a 2.5% y/y increase in output in 4Q22, while the UPS posted a 0.7% decrease. However, due to a weak 2Q22 and 3Q22, OGK-2 underperformed the UPS in 2022 - its output was down 2.6% y/y last year, while the output of the UPS was up 0.7%. Nonetheless, OGK-2's gross electricity output in 2022 exceeded our forecast by 4.8%, and we now see upside to our 2022 financial forecasts. All in all, we see the 4Q22 operating results as strong. We have a BUY recommendation for the stock, which offers upside of 16.7% and a dividend yield of 16.4% in 2023 (for the payments for 2022).
Mosenergo published its 4Q22 operating results. Gross electricity output increased 2.3% y/y to 18,330mn kWh in 4Q22, while gross heat output fell 1.8% y/y to 30,330k Gcal. Gross electricity output in 2022 was up 0.8% y/y, with heat output down 4.2%. After a weak 3Q22, Mosenergo's gross electricity output rebounded in 4Q22 - its output grew 2.3% y/y after dropping 2.9% y/y in 3Q22. We assume that this owed to more favorable weather conditions. Mosenergo's electricity output dynamics were better than those of the United Power System (UPS) - the company posted a 2.3% y/y increase in output in 4Q22, while the UPS posted a 0.7% decrease. With the strong 4Q22 results, the company's electricity output growth last year was in line with that of the UPS - Mosenergo's output was up 0.8% y/y last year, while the output of the
155 RUSSIA Country Report February 2023 www.intellinews.com