TGC-1 Releases the 3M 2014 Results

26.05.2014

OJSC TGC-1 releases its abbreviated interim unaudited consolidated Financial Statements for the 3 months period, ended March 31, 2014 prepared in accordance with International Financial Reporting Standards (IFRS).

Consolidated Statement of Comprehensive Income Highlights (mn RUR)

3M 2013

3M 2014

Revenue

22,427

21,971

Operating Expenses

(17,390)

(17,477)

Operating Profit

5,037

4,494

EBITDA*

6,733

6,170

Profit for the Period

3,425

3,136

* EBITDA is calculated as Operating profit + Depreciation of PP&E + Amortization of intangible assets and investment property

Consolidated TGC-1 revenue for 3M 2014 totaled 21,971 mn RUR, decreasing thus by 2.0% year-on-year. Revenue structure reflects the following dynamics:

 -      Revenue from electricity sales decreased by 3.7% and totaled 7,607 mn RUR on the back of lower electricity demand and lower sales at the “day-ahead” market;

 -      Revenue from capacity sales decreased by 3.5% to 3,783 mn RUR on the back of decreased capacity volume, sold at CCO, and lower average capacity price under CSA;

 -      Revenue from exports decreased by over twice to 215 mn RUR due to unfavorable market environment at Nord Pool;

 -      Revenue from heat sales totaled 10,257 mn RUR and grew by 2.3%, resulting from increased heat tariffs in 2H 2013.

 Operating expenses for the 3 months of 2014 (with account to Government grants for Murmanskaya CHP of 314 mn RUR and Other operating income of 138 mn RUR) grew by 0.5% year-on-year, up to 17,477 mn RUR.

 Variable costs were decreased by 2.1%, up to 12,704 mn RUR. That was reasoned by the following factors:

 -        Decreased fuel costs due to lower electricity production at CHP;

 -        Growth of Heat transmission expenses resulting from transit of heat for Hibinskaya Heating Company and increased tariff for heat transmission contract with Apatitenergo;

 -        Decrease in expenses for electricity, capacity and heat purchases on the back of lower electricity consumption and exports.

 In spite of decreased taxes other than income tax, on the account of downside correction of the property tax amount for previous periods, fixed costs grew by 20.2% to 3,549 mn RUR mainly due to the following factors:

 -        Increase of repairs and maintenance costs on the back of planned repairs of PP&E;

 -        High basis effect of 1Q 2013 on “Loss/(Gain) on Disposal of PP&E” item due to PP&E gain under compensational agreements for indemnification of damages caused during repair and construction works to OJSC “Heating Grid of St. Petersburg”;

 Amortization & depreciation decreased by 1.2%, to 1,676 mn RUR.

 Operating profit for 3M 2014 decreased by 10.8% year-on-year totaling 4,494 mn RUR. EBITDA amounted to 6,170 mn RUR, which corresponds to 8.4% decrease year-on-year.

 According to the Financial Statements the Profit and Total comprehensive income for the period  decreased by 8.4%, amounting to 3,136 mn RUR.

 Full OJSC TGC-1 3M 2014 results under IFRS can be found at the corporate website in the “Reports” section.