Page 124 - RusRPTMar19

production printed at 132.5bn kWh, implying a 1.7% y/y reduction with the load factor decreasing to 45.3%. At the same time, the total heat production printed at 41.7mn GCal, translating into 4.4% y/y growth driven by the weather conditions in the areas where it operates. Total supply volumes increased 4.3% y/y to 190.5bn kWh, giving the company a 17.7% share of the Russian market. Despite export levels falling 17.8% y/y, import operations saw growth of 17.2% y/y. On the RAS financials level, InterRAO holding company (which consolidates trading operations and dividends from subsidiaries) reported a 21% y/y upturn in the bottom line to RUB 18.8bn, while InterRAO’s electricity generation subsidiaries recorded 4% y/y growth in the bottom line to RUB 38.8bn. The largest supply company, Mosenergosbyt, recorded a 23% y/y slide in net income due to taxes and other costs lines. “The production data implies slight upside to our profitability estimates, positioning the company well to deliver on its RUB 110-115bn EBITDA guidance for FY18. We note that InterRAO’s RAS net income reflects exclusively the import-export operations and dividends lifted from subsidiaries (gencos, supply, international operations) levels, while being fully consolidated on the IFRS financials,” VTB Capital (VTBC) said in a note. “Thus, the key takeaway from the results is the absolute value of net income: RUB 18.9bn (under Russian corporate law, InterRAO’s dividends cannot exceed 100% of its RAS net income). And, according to our estimates, the reported bottom line is similar to what we expect to be a 25% of IFRS net income dividend payment. The bottom line is that InterRAO’s payout is to stay at 25%, despite potential expectations, and the dividend yield is unlikely to exceed 4.5%, in our view,” VTBC added
Russian utility OGK2 has released its FY18 operating results. Production was down 7% y/y to 58.9bn kWh, with certain plants seeing drops of 42% to 81% vs. 27+% growth at other selected power plants. The total heat sendout printed at 7,007th GCal, implying a 4% y/y increase, which can be explained by the weather conditions. “We believe that the operating results are relatively muted, though not unexpected (following the 9mo18 dynamics), with a sharp reduction in production at certain power plants and an overall deterioration in production. We do not anticipate any significant market reaction to the results and, in fact, on our numbers, the combination of factors along with the strong free market prices in 4Q18 suggest that the company’s FY18 IFRS results could slightly exceed our current expectations,” VTB Capital (VTBC) said in a note. “However, along with deleveraging and a 25% dividend payout, we expect the dividend yield not to exceed 4-5% for FY18, out of a strong 35% FCF yield.”
9.2.11 Metallurgy & mining corporate news
A number of Russian companies, including Uralkran, Energoavangard, Veza, Promtreydimpeks, South Ural Plant and Permglavsnab, signed contracts to supply equipment for the Tashkent Metallurgical Plant (TMZ), which is currently under construction, the press service of TMZ said in a statement. The plant, set to launch in December 2019, is set to cost €286mn. Russia’s MetProm has been selected as the general contractor for the construction of the TMZ. After reaching full capacity, the company will annually produce 500,000 tonnes of cold-rolled metal. Approximately 20% of the output will be exported to Iran, Turkey, Afghanistan, Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Ukraine, Latvia, Lithuania, Estonia, according to local media reports. SFI
124 RUSSIA Country Report March 2019 www.intellinews.com