Page 106 - RusRPTJun20

9.1.10 ​Utilities sector news
The Russian energy ministry expects the utility sector to lose from RUB600bn to RUB700bn ($9.8bn) due to the coronavirus (COVID-19) epidemic ​and the moratorium on penalties on the delayed utility bills. As coveredby​bneIntelliNews,​ thegovernmenthasallowedhouseholdsand SMEs to skip paying the utility bills without accruing penalties, seen as having negative effects on the cash flows of the utility sector​. The ministry now argues that the moratorium should only remain in place until May 31 to limit the adverse effects on the industry. The revenues already were down by 7% in April and down by 12% in the heat energy sector, the deputy minister, Yury Manevich, estimated, as cited by Reuters. Out of the RUB36bn of missing revenues in April, RUB27bn were on missed collections and RUB9bn due to lower consumption.
Kommersant r​ eports that the government is considering a plan to reduce the duration of the moratorium on penalties and fines ​for the non-payment of communal services from ‘until the year-end’ to ‘the month, following the month in which social distancing measures are lifted in the region’. According to the paper, the amended law is to be adopted by mid-May. This is the key breakthrough in tackling the potentially devastating nonpayment issue in Russian utilities, which we estimated previously could have led to more than RUB1tn of cash gaps and debt requirements. As a result, should Russia move onto a trajectory of a mid-May scaling back in social distancing measures, a major portion of non-payments might well dissolve by the end of the second quarter, significantly limiting the damage to cash flows and the working capital expansion for utilcos. This would not lead to a complete resolution of the non-payment issue, though. Small and medium enterprises, which are currently experiencing significant economic pressure, need to be in sufficient financial health to return to timely electricity bill settlement. However, non-payments from regulated consumers (such as households and budget consumers), which we forecast could have accounted for three quarters of total
106​ RUSSIA Country Report​ June 2020 ​ ​www.intellinews.com