Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Investor's Day of JSC "IDGC Holding"

335 views

Published on

2011

Published in: Investor Relations
  • Be the first to comment

  • Be the first to like this

Investor's Day of JSC "IDGC Holding"

  1. 1. Investor's Day of JSC "IDGC Holding" JSC "Lenenergo" Outcomes of 1H 2011 & Plans for 211 Moscow August 3, 2011
  2. 2. Disclaimer This presentation is not an offer or invitation to make offers (advertisement) in respect of purchase or subscription to securities of JSC "Lenenergo". Neither the presentation, nor any part hereof, nor the fact of its representation or distribution serve as the basis for entering into any agreement or taking any investment decision; therefore, the presentation should not be relied upon in this respect. This presentation may contain estimates. The estimates are not based on actual circumstances and include statements in respect of the intentions, opinions or current expectations of Lenenergo as regards the results of its activity, financial position, liquidity, prospects of growth, strategy and the industry, in which Lenenergo operates. Such estimates by their nature are characterized by presence of risks and uncertainty factors since they are related to the events and depend on the circumstances, which may fail to happen in the future. Lenenergo warns that the estimates are not a guarantee of the future parameters, and the actual results of JSC "Lenenergo" activities, its financial position and liquidity, as well as development of the industry, in which it operates, may significantly differ from those included in the estimates contained herein. Besides, even if the results of the Company's activities, its financial position and liquidity, as well as the development of the industry, in which it operates, correspond to the estimates contained herein, such results and events are not indicative of the results and events in the future. This presentation contains the information received from third parties besides the official information on JSC "Lenenergo" activities. This information has been received from the sources which are reliable in JSC "Lenenergo" opinion. Nevertheless, we do not guarantee the accuracy of such information which may be reduced or incomplete. All opinions and estimates contained herein reflect our opinion as at the date of publication and are subject to change without notice. JSC "Lenenergo" does not bear liability for the consequences of use of the opinions or estimates contained herein, or information incompleteness. JSC "Lenenergo" does not undertake obligations in respect of revision or confirmation of the estimates and evaluations, as well as in respect of updating of the information contained herein.
  3. 3. Sudakova Tatiana Gennadyevna Director on Economics JSC "Lenenergo"
  4. 4. Average number of JSC "Lenenergo" personnel as of 30.06.2011 amounted to 6,103 persons. in St.-Petersburg – 74.8% The Company’s share in electric power transmission as of 30.06.2011 90.85 % 9.15 % Ordinary shares 928,021,679.004 pcs Preferred shares 93,264,311 pcs Authorized capital of JSC "Lenenergo" – RUR 1,019,285,990.004 Structure of the Company’s share capital**, % from share capital Information on JSC "Lenenergo" shares Quotation lists MICEX B RTS А-2 Tickers Ordinary shares LSNG Preferred shares LSNGP Capitalization as of 30.06.2011, mln USD.* 680 in the Leningrad Region – 60.2% Service area, thousand sq.km 87.3 Region population, mln. people 6.2 JSC "LENENERGO" is a large distribution grid company (the operator of 0.4-110 kV networks), servicing the territory of St.-Petersburg and the Leningrad region. Main types of activity: services for electricity transmission and distribution over electric power grids; • technological connection of power receiving facilities (power plants) of businesses and individuals to the power grids Share of JSC "Lenenergo" in Saint-Petersburg and the Leningrad region in electric power transmission as of 30.06.2011 – 69,5% The structure of JSC "Lenenergo" includes 9 production branches in Saint-Petersburg and the Leningrad region. General Information on the Company * The calculation is made on the capitalization weighted average price on the MICEX exchange at the rate of the Central Bank on that date ** As of the closing date of the register 11.05.2011 50,31% 25,16% 8,76% 4,09% 2,75% 2,47% 0,96% 5,51% I.D.E.ELECTRICITY DISTRIBUTION INVESTMENTS 1 LIMITED (JSC "IES Holding") ENERGYO SOLUTIONS RUSSIA LIMITED (EOS Russia) RUSENERGO FUND LIMITED THE NORTHERN TRUST COMPANY JP MORGAN other The city of St.-Petersburg (CPMC) JSC "IDGC Holding" | 1 Major competitors: municipal electric network companies JSC "SPbES" (in St. Petersburg) and JSC "LOESK" (in LO)
  5. 5. 28 439 27 672 29 095 14 714 12 434 25 571 27 372 19 094 20 828 26 088 34 201 18 727 1540 3 258 3 806 1 209 5 566 8 190 10 356 4746 Key results of the Company’s performance in 1H 2011 Unit 2008 2009 2010 1H 2011 Installed capacity MVa 19 365,5 19 901,4 20 740,5 21 123,0 OTL 0.38-110 kV by circuits km 39 084,6 39 285,9 39 418,8 39 484,8 OTL 0.38-110 kV on line km 35 966,5 36 148,2 36 273,6 36 283,2 Cable lines 0.38-110 kV km 16 730,9 17 650,7 18 622,3 18 626,5 Substations 35-110 kV pcs (MVa) 368 (12 818) 370 (13 084) 372 (13 466) 373 (13 546) Transformer substations 6-35 kV pcs (MVa) 13 646 (6 548) 13 909 (6 818) 14 361 (7 275) 14 517 (7 578) Assets of JSC "Lenenergo" Capitalization (MICEX), RUR mln EBITDA, RUR mln Revenue, RUR mln Net profit, RUR mln Productive supply, mln kWh 2008 2009 2010 1H 2011 Dynamics of key indicators of JSC "Lenenergo" | 2 + 7.0% + 31.1% + 26.4% + 16.8% + 5.1%
  6. 6. 228 79 56 27 34 29 32 28 22 5 9 156 77 38 19 22 19 19 17 11 4 6 ХолдингМРСК МОЭСК МРСКЦентра Ленэнерго МРСКЦиП МРСКУрала МРСКВолги МРСКСибири МРСКС-З МРСКСК МРСКЮга 30.12.2010 30.06.2011 0 5 10 15 20 25 30 35 40 45 50 - 10 000 20 000 30 000 40 000 50 000 60 000 Суммарная капитализация АО average АП average RURRUR mln 0,00 5,00 10,00 15,00 20,00 25,00 30,00 35,00 0,00 500,00 1000,00 1500,00 2000,00 2500,00 3000,00 3500,00 4000,00 MICEX MICEX PWR average АО ЛЭ 22 908 24 060 24 755 28 108 27 416 27 372 28 477 28 332 26 719 24 958 21 881 19 094 июл.10 авг.10 сен.10 окт.10 ноя.10 дек.10 янв.11 фев.11 мар.11 апр.11 май.11 июн.11 Securities of JSC "Lenenergo" in 2010-2011 31.12.2010 30.06.2011 ∆,% MICEX 1687.99 1666.59 -1.3 MICEX PWR 3435.32 2725.01 -20.7 average OS LE 25.95 16.91 -34.8 Dynamics of JSC "Lenenergo" securities in 2010-2011 Capitalization of JSC "Lenenergo" in 2010-2011, RUR mln* Dynamics of MICEX, MICEX PWR and ordinary shares of JSC "Lenenergo" in 2010-2011 In 1H 2011 the Company’s shares traded in the general downward trend with DGCs and the industry index, reflecting investors' lack of confidence due to the uncertainty of the tariff regulation Year Dividends on OS, RUR Dividends on PS, RUR Accrued dividends, RUR thousand for 2008 no 1,6508 153 962 for 2009 no 3,4933 325 804 for 2010 no 4,0804 380 559 ** In accordance with the Charter of JSC "Lenenergo" dividends are accrued on preferred shares of type A in the amount of 10% of net profit for the completed fiscal year Capitalization*, RUR mln 2008 2009 2010 2010/2009, % MICEX 12 434 25 571 27 372 +7,0 % RTS 11 739 25 703 27 516 +7,1% on MICEX SE Price as of 30.06.2011, RUR LSNG (MICEX) 16.91 LSNGP (MICEX) 36.79 Dividends of JSC "Lenenergo" for 2008-2010, RUR mln** Dynamics of DGCs’ capitalization in 1H 2011 (MICEX), RUR mln* RURp.p. | 3 Totaled capitalization Ordinary shares Proffered shares IDGCHolding MOESK IDGCofCenter IDGCofCenterand Volga IDGCofVolga IDGCofUrals Lenenergo IDGCofNorth-West IDGCofSouth IDGCofSiberia IDGCofNorth Caucasus * Calculation is executed by an average price at the MICEX Average OS LE
  7. 7. Key parameters of RAB regulation of JSC "Lenenergo" in 2011-2015 Key RAB indicators, RUR mln Saint Petersburg Leningrad Region JSC "Lenenergo" Total amount of invested capital 106 792 70 931 177 723 Residual value of invested capital as at 01.01.2011 53 290 25 267 78 557 Amount of capital expenditure considered for the purposes of tariff regulation, 2011-2015 52 062 17 331 69 393 Rate of return on invested capital –old capital, % 2011 6% 6% 6% 2012 9% 9% 9% 2013 and further 11% 11% 11% Rate of return on invested capital – new capital, % 2011-2012 12% 12% 12% 2013 and further 11% 11% 11% Time period of recovery of invested capital, years 35 35 35 Adjusted tariff decision Approved long-term parameters 2011 2012 2013 2014 2015 2015/ 2010 In St.-Petersburg 16% 32% 24% 20% 15% 2,2 times In the Leningrad Region 14% 28% 22% 32% 37% 3,1 times Gain in electricity transmission tariff* in 2011-2015, % In compliance with the requirements of the RF Government Decree dated 27.12.2010 No.1172 on the growth limitation of the average one-rate tariff on the subject of the Russian Federation for transmission of electric power by an amount not exceeding 15% relative to the level of 2010. The regulatory authorities have reviewed previously approved tariffs for JSC "Lenenergo" for 2011 downwards. Currently the issue on the further adjustments in the long-term tariff projections is considered. In the absence of any scenario conditions to determine the parameters of regulation at present time, forecasts for 2012-2015 have not been formed. From January 01, 2011 JSC "Lenenergo" transited to long-term system of Regulatory Asset Base (RAB) | 4
  8. 8. Adjustment parameters of the tariff decision for 2011 Parameters of RGR and average tariffs for electricity transmission for 2011 prior and after adjustment: Indicator St.-Petersburg Leningrad region 2010 2011 2011 adjusted Deviation 2011 adjusted / 2011 2010 2011 2011 adjusted Deviation 2011 adjusted / 2011 Controllable expenses 2 030 2 723 2 723 - 1 713 2 384 2 384 - Non-controllable expenses 10 394 12 754 12 348 -406 6 388 9 407 9 459 52 Payment of JSC "FGC UES" 2 928 3 876 3 765 -111 1 900 2 433 2 575 142 Services of ANO 2 689 3 664 3 437 -227 2 763 4 612 4 532 -80 Losses in JSC "Lenenergo" grids 3 321 3 713 3 713 - 1 166 1 903 1 903 - Lost income 1 189 286 286 - 226 0 0 - Other non-controllable expenses 268 1 214 1 146 -68 333 459 449 -10 Repatriation of capital 1 638 3 051 3 051 - 1 095 2 027 2 027 - ROE 614 3 268 3 268 - 270 1 556 1 556 - Smoothing 0 -2 194 -3 117 -923 0 -3 476 -3 691 -215 Total required gross revenue 14 675 19 601 18 273 -1 329 9 465 11 897 11 734 -163 Productive electricity supply, mln kWh 18 389 18 475 18 475 - 9 809 10 651 10 651 - Average electricity transmission tariff, cop./kWh 85,6 106,1 98,9 -7,2 96,5 111,7 110,2 -1,5 Gain to the previous year, % 24% 16%* 16% 14% * Reduction of tariffs in accordance with the RF Government Decree № 1172 dated 27.12.2010 was conducted to provide a level of growth rate for electricity transmission tariffs of 2011 to the tariffs of 2010 no higher than 15%. In St.-Petersburg the average tariff of JSC "Lenenergo" exceeds a predetermined level in connection with the use of tariffs from 01.05.2011 (taking into account the fact that for 4 months there was acting a tariff, an increase of which significantly exceeds 15%, the average annual growth rate was formed higher than 15%). Indicator St.-Petersburg Leningrad region 2011 2011 adjusted deviation 2011 2011 adjusted deviation Revenue from transmission 19 688 18 124 -1 597 11 874 11 431 -443 Costs of transmission 19 130 18 809 -485 14 028 13 760 -312 Federal factors 12 580 12 004 -658 9 484 9 108 -417 Own costs 6 550 6 805 174 4 545 4 652 105 Costs of revenue 858 813 -1 924 1 058 110 Profit tax 228 231 3 147 148 1 Net profit -527 -1 729 -1 114 -3 225 -3 535 -242 RUR mln The expected financial performance on electricity transmission considering the adjustments: Loss on transmission is associated with the following factors: -application of smoothing mechanism under the RAB procedure, which involves the removal of economically viable revenue of the organization in the current period and its recovery in subsequent years; - incomplete accounting of the fees for reimbursement of costs of regulated organizations in tariffs (service fee of JSC "FGC UES", the cost of electricity losses). RUR mln | 5
  9. 9. Overview of planned financial performance of JSC "Lenenergo" for 2011 * Adjusted net profit is used for calculation of ROE ** Debt as at the end of the period is calculated as debt under loans and credits (line 510 + line 610 of the balance sheet) Indicator Unit 2010 2011 Plan adjusted Δ в % 2011 adjusted /2010 Book value of assets RUR mln 88 700 99 631 12,3% Net assets RUR mln 51 897 51 914 0,03% Equity RUR mln 51 759 51 785 0,1% ROE* % 7,8% 1,07% -86,3% Revenue from sales of products, including: RUR mln 34 201 37 889 10,8% - from services on electric power transmission RUR mln 23 873 29 555 23,8% - from services on technological connection RUR mln 10 164 8 161 -19,7% - from other activities RUR mln 164 174 6,1% Cost of goods sold RUR mln 27 488 33 994 23,7% EBITDA RUR mln 10 356 7 572 -26,9% Profit on sales RUR mln 6 713 3 895 -42,0% Profit before taxes RUR mln 5 282 1 350 -74,5% Net profit RUR mln 3 806 555 -85,4% EBITDA margin % 30,3% 20,0% -34,0% DEBT/EBITDA ** - 2,13 3,16 48,9% Debt as at the end of the period*** RUR mln 14 733 28 406 92,8% Net debt RUR mln 14 405 27 481 90,8% Ratio of equity and borrowed funds - 1,4 1,08 -22,7% Leverage % 22,2% 35,4% 59,9% Ratio of receivables and payables - 0,46 0,56 21,2% | 6 IMPORTANT: projections are formed in accordance with the adjusted business plan of JSC "Lenenergo" for 2011-2015 (considering the revise of tariffs for 2011 and results of 1H 2011), and may be adjusted by the Company
  10. 10. 7 598 12 290 9 854 14 050 14 468 7 860 8 661 10 715 7 467 2 592 2011E * 2012E* 2013E* 2014E* 2015E* Новое строительство ТПиР Long-term investment program of JSC "Lenenergo" for 2011-2015 RUR mln, net of VAT 2011 2012 2013 2014 2015 Investments, 2011-2015 JSC "Lenenergo" 15 633 20 951 20 569 21 517 17 060 95 730 Re-equipment and reconstruction 7 598 12 290 9 854 14 050 14 468 58 260 New construction and expansion 8 035 8 661 10 715 7 467 2 592 37 294 RUR mln, net of VAT 2011 2012 2013 2014 2015 Investments, 2011-2015 JSC "Lenenergo", including: 15 633 20 951 20 569 21 517 17 060 95 730 Saint Petersburg 11 206 15 321 15 822 17 244 14 418 74 011 Leningrad Region 4 427 5 630 4 747 4 273 2 642 21 719 Parameters of the Investment program of JSC "Lenenergo" for 2011-2015 (CAPEX) 2011 2012 2013 2014 2015 Power input, MVA 744,4 1 406,4 1 374,8 2 153,8 1 242,5 Power input, km 1 443,7 1 399,1 1 006,4 944,7 738,6 Growth of power, MVA 455,6 754,0 692,8 1 528,4 736,0 Growth of power, km 866,0 568,9 541,5 372,7 244,5 Plans for 2011-2015 are presented in accordance with the adjusted investment program for 2011-2015, which is approved by JSC "IDGC Holding". | 7 The adjusted IP for 2011-2015 on St.-Petersburg is approved in the executive bodies of St.-Petersburg The adjusted IP for 2011-2015 on the Leningrad region is on the approval in the executive bodies of the Leningrad region RUR mln, net of VAT 2011 2012 2013 2014 2015 Investments, total IP adjusted 15 633 20 951 20 569 21 517 17 060 95 730 IP approved 22 652 20 950 20 569 21 517 15 512 102 796 Deviation, % -40,0% 0,0% 0,0% 0,0% 10,0% -6,9% Adjustments of the Investment Program of JSC "Lenenergo" in 2011 Following the adjustment , in the Investment Program for 2011 there were: -excluded items of development of the distribution network, not secured by a funding source (provision by funds of the third additional issue of shares was planned); - reduced the amounts of the property income of applicants on the basis of obligations under technological connection The adjustment of the Investment Program is not associated with the adjustment of the tariff decision for 2011 Re-equipment and reconstruction New construction and expansion
  11. 11. 0 5 000 10 000 15 000 20 000 25 000 2011 2012 2013 2014 2015 Передача электроэнергии Плата за технологическое присоединение Прочие нетарифные источники Sources of financing JSC "Lenenergo" investments in 2011-2015 Sources of financing the investments in 2011-2015, RUR mln, VAT included 15 633 20 951 20 569 21 517 17 060 20% 6% In the adjusted Investment program for 2011-2015, the main financing sources are formed (94%) at the expense of the electricity transmission tariff – 74%, and at the expense of payment for technological connection – 20%. The rest 6% will be formed at the expense of non-tariff sources, including part of proceeds from the planned placement of additional issue of shares will be directed for the financing of investment activity 70 833 19 337 5 509 RUR 95,730 mln The payment for technological connection is formed taking into account a2 times decrease in the payment rates from 01.01.2011 due to exclusion of the investment component for development of the existing grid infrastructure (clause 23.2 of the Federal Law No.35-FZ dated 26.03.2003 "On Electric power industry") | 8 9 791 12 126 15 133 18 768 15 065 4 148 5 647 4 800 2 749 1 994 1 695 3 178 636 2011 2012 2013 2014 2015 Передача электроэнергии Плата за технологическое присоединение Прочие нетарифные источники IMPORTANT: projections are formed in accordance with the adjusted business plan of JSC "Lenenergo" for 2011-2015 (considering the revise of tariffs for 2011 and results of 1H 2011), and may be adjusted by the Company 74% Electric power transmission Payment for technological connection Other non-tariff sources Electric power transmission Payment for technological connection Other non-tariff sources
  12. 12. Overview of financial performance of JSC "Lenenergo" in 1H 2011 Indicator Unit 1H 2010 1H 2011 Δ , 1H 2011/1H 2010 Book value of assets RUR mln 85 586 90 652 5,9% Net assets RUR mln 49 715 52 420 5,4% Equity RUR mln 49 574 52 420 5,7% ROE* % 3,29% 2,24% -31,9% Revenue from sales of products, including: RUR mln 15 896 18 727 17,8% - from services on electric power transmission RUR mln 11 292 14 908 32,0% - from services on technological connection RUR mln 4 525 3 740 -17,4% - from other activities RUR mln 79 79 1,0% Cost of goods sold RUR mln 13 276 16 185 21,9% EBITDA RUR mln 4 696 4 746 1,1% Profit on sales RUR mln 2 620 2 542 -3,0% Profit before taxes RUR mln 2 242 1 797 -19,8% Net profit RUR mln 1 620 1 209 -25,4% EBITDA margin % 29,5% 25,3% -14,2% DEBT/EBITDA ** - 2,97 3,35 15,7% Debt as at the end of the period*** RUR mln 13 954 15 882 13,8% Net debt RUR mln 12 014 15 344 27,7% Ratio of equity and borrowed funds - 1,38 1,37 -0,4% Leverage % 22,0% 23,3% 5,9% Ratio of receivables and payables - 0,63 0,42 -32,8% * Adjusted net profit is used for calculation of ROE ** Debt as at the end of the period is calculated as debt under loans and credits (line 510 + line 610 of the balance sheet) | 9
  13. 13. 9,97 10,33 10,71 10,76 10,45 9,96 9,87 9,14 2008 2009 2010 2011 2012 2013 2014 2015 16 835 14 493 2 342 1 940 17 126 14 714 2 413 1 915 Отпуск в сеть Полезный отпуск Общие потери в сетях Потери в сетях ОАО "Ленэнерго" 1ПГ 2010 1ПГ 2011 Electric power transmission of JSC "Lenenergo" in 1H 2011 Dynamics of indicators of electric power transmission on JSC "Lenenergo" grids in 1H 2010 – 1H 2011, Mln kWh Indicators Supply to grid, Mln kWh Productive supply, Mln kWh Total losses in grids Losses in JSC "Lenenergo "grids 1H 2010 1H 2011 1H 2010 1H 2011 Mln kWh % Mln kWh % Mln kWh % Mln kWh % 1H 2010 1H 2011 1H 2010 1H 2011 JSC "Lenenergo", including: 16 834,5 17 126,2 14 492,6 14 713,6 2 341,9 13,91 2 412,6 14,09 1 940,4 11,53 1 915,3 11,18 Saint Petersburg 10 577,4 10 885,1 9 244,2 9 422,5 1 333,2 12,60 1 462,6 13,44 1 220,7 11,54 1 256,2 11,54 Leningrad Region 6 257,1 6 241,1 5 248,4 5 291,1 1 008,7 16,12 950,0 15,22 719,7 11,50 659,1 10,56 +1,73% +1,52% +3,02% -1,29% 28 439 27 672 29 095 29 421 2008 2009 2010 2011 план Dynamics of productive supply, Mln kWh Dynamics of losses in JSC "Lenenergo" grids, % The Company is implementing the Program on reduction of electricity losses in networks, according to which a target level of electricity losses in networks of JSC "Lenenergo" in 2015 is 9.1% Losses in JSC "Lenenergo" grids are significantly lower the losses in the adjacent network organizations The growth of the planned level of losses in 2011 compared to 2010 by 0.05% is associated with the growth of technological losses of electricity (load loss), which is caused by a significant increase in supply to grid | 10 Supply to grid Total losses in gridsProductive supply Total losses in JSC "Lenenergo" grids 1H 2010 1H 2011 Plan
  14. 14. 4 441 1 522 6 351 2 471 Заключено договоров Закрыто договоров 1ПГ 2010 1ПГ 2011 Technological connection of JSC "Lenenergo" in 1H 2011 In 1H 2011 the main demand for technological connection accounts for the Leningrad region - 77% of the contracts concluded (in 1H 2010 - 89%). The number of contracts closed in 1H 2011 is distributed by subjects almost equally, whereas in 1H 2010 69% of closed contracts were in the LR. Number of fulfilled obligations for 12 months of 2010 amounted to 4,173 contracts on the power of 645.3 MW and the amount of RUR 10,164 mln (net of VAT). Plan of obligations' fulfillment on TC in 2011 is 3,650 contracts for a total capacity of 356 MW ​​and for the amount of RUR 8,161 mln (net of VAT). The plan for 2011 is formed taking into account the expected reduction in entering of the property for property contracts. 183,8 MW + 43% Outcomes of technological connection of JSC "Lenenergo" in 1H 2010 – 1H 2011, pcs (MW) 4 173 3 650 2010 2011 план Contracts closed, pcs (MW) + 62,4% 224,1 MW 155,0 MW327,9 MW Region Contracts concluded Contracts closed pcs MW pcs MW pcs MW pcs MW 1H 2010 1H 2011 1H 2010 1H 2011 JSC "Lenenergo" 4 441 224,1 6 351 183,8 1 522 327,9 2 471 155,0 Saint Petersburg 486 71,9 1 437 68,4 472 260,9 1 038 70,6 Leningrad Region 3 955 152,2 4 914 115,3 1 050 66,9 1 433 84,4 645,3 MW 356,0 MW RUR mln share, % Revenue from TC, including 3 740 100% On existing contracts (term of services after 01.01.2011) 1 898 51% On overdue contracts (term of services prior to 01.01.2011) 1 842 49% Revenue from TC, RUR mln 10 164 8 161 Structure of revenue from TC in 1H 2011 Region Contracts closed pcs. MW pcs. MW 2010 2011 Plan JSC "Lenenergo" 4 173 645,3 3 650 356,0 St.-Petersburg 1 356 460,0 938 191 Leningrad region 2 817 185,3 2 712 165 Closure plan of contracts in 2011, pcs (MW) In 1H 2011 as compared to 1H 2010 the volume contracts concluded on the power of up 15 KW (more than 1500 pcs) increased, which resulted in reduction in total power, while increasing in the number of contracts. | 11 Contracts concluded 1H 2010 1H 2011 Contracts closed plan
  15. 15. 4 696 4 746 1ПГ2010 1ПГ2011 12 507 15 578 732 574 1ПГ2010 1ПГ2011 по передаче э/э по ТП 11 292 14 908 4 525 3 740 1ПГ2010 1ПГ2011 от передачи э/э от ТП Key financial indicators of JSC "Lenenergo" in 1H 2011 +17,8% +21,9% -3,0 % -25,4% +1,1% Generation of profits from sales and net profit, RUR mln EBITDA, RUR mln EBITDA margin, % 29,5% 25,3% | 12 15 896 18 727 71,0 % 28,5% 20,0% 79,6% Revenue by types of activity*, RUR mln +31.1% COGS by types of activity*, RUR mln 13 276 16 185+32.1% 94,2% 5,5% 96,2% 3,5% Costs of production and sales 1H 2010 1H 2011 1H 2011/ 1H 2010 Material expenditures 2 891 3 298* 14,1% Production work and services 5 476 7 538** 37,7% Payment for labor 1 099 1 298 18,1% Depreciation 2 000 2 455 22,8% Other costs 1 810 1 596 -11,8% Total 13 276 16 185 21,9% COGS structure * Material expenditures 3 298 Purchased electric power for compensation of losses 3 081 Purchased electric power for production and economic needs 53 Raw materials 164 15 896 13 276 2 620 1 620 18 727 16 185 2 542 1 209 Выручка от реализации Себестоимость Прибыль от реализации Чистая прибыль 1ПГ 2010 1ПГ 2011 **Production work and services 7 538 Services of contractors for maintenance and repair of equipment 181 Services of JSC "FGC UES" 3 130 Services of distribution grid companies 4 114 Other production services 113 Revenue growth for 6 months of 2011 compared to the same period of the previous year constituted 17.8%, or RUR 2,831 mln. Revenue growth on electric power transmission by 32%, or RUR 3,616 mln was associated with the increased rates for electrical networks maintenance (an increase of the average tariff for electric power transmission in 1H 2011 compared to the average rate for 1H 2010 amounted to: in St.-Petersburg - 141%, in the LO - 81%), as well as with a significant increase in the electric power transmission (220 mln kWh) and power (3,678 MW). At the same time revenue from technological connection for 6 months of 2011 compared to the same period the previous reporting year, fell by 17.4% (RUR 786 mln), which is associated with the decrease in revenues under property contracts. * Including other activities, the amount of revenue and COGS of which is less than 1% of the total sum The most significant changes in EBITDA for the reporting period with respect to 6 months of 2010 is associated with a decline in the structure of the indicator of the unit weight of net profit which decreased by 25.4%, and with the increase in the share of depreciation, which increased by 22.8%. Also the unit weight of profit tax decreased, and the share of accrued interest has increased. Sales revenue COGS Gross profit Net profit 1H 2010 1H 2011 1H 2010 1H 2011 1H 2011 1H 2010 1H 2011 from electricity transmission from TC from electricity transmission from TC 1H 2010
  16. 16. Loan portfolio and debt position of JSC "Lenenergo" in 1H 2011 1H 2010 1H 2011 Δ , 1H 2011/ 1H 2010 Equity 49 574 52 420 5,7% Liabilities, including: 36 013 38 232 6,2% Long-term liabilities 13 757 12 203 -11,3% Short-term liabilities 22 255 26 029 17,0% Ratio of equity and borrowed funds 1,38 1,37 -0,4% Leverage 22,0% 23,3% 5,9% 1H 2010 1H 2011 Δ , 1H 2011/ 1H 2010 Long-term credits and loans, including: 12 797 9 710 -24,1% bonded loan (repayment in 2012) 6 000 -100,0% Short-term credits and loans*, including: 1 157 6 172 433,3% bonded loan (repayment in 2012) 6000 - Accounts payable** 20 852 20 519 -1,6% Equity structure, RUR mln Loan portfolio, RUR mln Key banks – partners of JSC "Lenenergo": JSC "Sberbank of Russia" JSC "Bank VTB North-West" JSC JSCB "Svyaz-bank" JSC JSB "ROSSIYA" * Liabilities on bonded loans of series 02 and 03 in the amount of RUR 6,000 mln as of 30.06.2011 was transferred in accordance with the requirements of the AS in the short-term liabilities in connection with the upcoming maturity in 2012. Debt position, RUR mln 7.9% Weight average rate of borrowing for 1H 2011 Agency Rating Assigned Moody’s Ba2 (forecast stable) November 2009 Moody’s Interfax Rating Agency (rating on national scale) Aa2.ru (forecast stable) November 2009 Credit rating Confirmed in March 2011 Plan of credit resources flow in 2011, RUR mln * Debt as at the end of the period is calculated as liabilities on the sum of main debt on loans (line 510 + line 610) | 13 ** The amount of aggregate (long-term and short-term) accounts payable is displayed. The share of short-term account payable (line 620 of balance sheet) amounts to 74.2% of short- term liabilities 14 562 16 977 3 325 28 214 Сальдо на 01.01.2011 Привлечение кредитов (выборка) Погашение кредитов Сальдо на 31.12.2011 Of these, RUR 7,842 mln - investment loans, RUR 5,610 mln - operating loans, RUR 3,525 mln - loans to refinance 1H 2010 1H 2011 Δ , 1H 2011/ 1H 2010 Debt / EBITDA 2.97 3.35 15.7% Debt as at the end of the period** 13,954 15,882 13.8% Net debt 12,014 15,344 27.7% Balance as of 01.01.2011 Attraction of credits (sample) Repayment on credits Balance as of 31.12.2011
  17. 17. Implementation of investment program of JSC "Lenenergo" in 1H 2011 The adjusted investment program for 2011 was approved by JSC "IDGC Holding" in the amount of capital investments - RUR 15,633 mln. The actual disbursement of capital investments 1H 2011 amounted to RUR 4,982 mln. JSC "Lenenergo" 1H 2010 1H 2011 1H 2011 / 1H 2010, % TOTAL 4 898 4982 2% Modernization and renovation 928 1997 115% New construction 3 970 2985 -25% Volume of capital investments, RUR mln net of VAT CAPEX, RUR mln 4 898 4 982 Parameters of the investment program, RUR mln Indicator St.-Petersburg Leningrad Region JSC "Lenenergo" 1H 2010 1H 2011 1H 2011/ 1H 2010 1H 2011 1H 2011/1H 2010, % 1H 2010 1H 2011 1H 2011/ 1H 2010, %1H 2010, % Disbursement, RUR mln net of VAT 4154 3440 -17% 744 1542 107% 4898 4982 2% Commissioning of fixed assets, RUR mln 3977 3316 -17% 490 498 2% 4467 3813 -15% Funding, RUR mln including VAT 5142 4298 -16% 1499 1436 -4% 6641 5734 -14% Power input , МVА 302 203 -33% 45 52 16% 347 255 -26% Power input, km 425 367 -14% 178 123 -31% 603 489 -19% Growth of power, MVA 295 176 -41% 44 39 -12% 339 214 -37% Growth of power, km 417 336 -19% 76 70 -8% 493 406 -18% | 14 928 1997 3 970 2985 1ПГ 2010 1ПГ 2011 ТПиР Новое строительство •205.96 MVA of transformer capacity /planned 160.87 MVA (128% to the plan), •338.54 km of OTL / planned 305 km (111% to the plan). Commissioning capacity in St.-Petersburg: •161.5 MVA of transformer capacity •254,74 km of OTL Commissioning capacity in the Leningrad region: •44.46 MVA of transformer capacity •83.8 км km of OTL In the reporting period the volume of commissioning capacity constituted: New constructionModerniza tion and renovation 1H 2010 1H 2011
  18. 18. Parameters of the additional issue of ordinary shares of JSC "Lenenergo" in 2011-2013 2011 2012 2013 2011-2013 Form of conduct Public offering Offering price weighted average price determined on the results of trading on the "MICEX" Stock Exchange for 3 months Volume of issue, RUR bln 3.98 4.97 0.99 9.94 Order of payment for shares Funds + property* At present JSC "Lenenergo" conducts corporate procedures to launch the additional issue of ordinary shares JSC "IDGC Holding" and the Administration of St.- Petersburg exercise their preemptive right to purchase shares in accordance with the existing proportion in ordinary shares of JSC "Lenenergo" * St.-Petersburg Government is involved in the additional issue by introducing property The target designation of funds is the Renovation program of 6-110 kV cable network in St.- Petersburg. 50,31% 25,16% 24,53% ОАО "Холдинг МРСК" Санкт Петербург Прочие RUR 2.4 bln Share of minor shareholders By achieving the following goals: The economic effect from implementation of the Renovation program of cable network in St.-Petersburg is the increase inprofitability of JSC "Lenenergo" | 15 - Improving power supply security - Reducing in networks depreciation - reducing in losses in networks IDGC Holding St.-Petersburg Other
  19. 19. Federal budget for 2011 LENENERGO RUR 1 bln RUR 2 bln Quarter 2-3 Quarter 4 2011 IDGC HOLDING ST.-PETERSBURG Property MINOR SHAREHOLDERS INVESTORS LENENERGO LENENERGO 1 2 3 RUR 2 bln to Share Capital RUR 975 mln Monetary funds Quarter 4 2011 Quarter 4 Quarter 1 2011-2012 2012 preemptive right public offering 2011 Additional issue of ordinary shares of JSC "Lenenergo" in 2011 After placing the issue Shareholder Volume of acquisition, RUR Volume of acquisition, pcs From share capital, % IDGC Holding 2 000 000 009 102 564 103 50.31 St.-Petersburg 999 999 078 51 282 004 25.16 Minor shareholders and investors 975 225 791 50 011 579 4.43 Other shareholders 0 0 20.11 50,31% 25,16% 4,43% 20,11% Холдинг МРСК Город СПб Акционеры и инвесторы Прочие акционеры Parameters of the additional issue of ordinary shares in 2011 Plan-schedule of placing the additional issue of ordinary shares in 2011 | 16 IDGC Holding St.-Petersburg Shareholders and investors Other shareholders
  20. 20. Low liquidity of the Company's ordinary shares A large proportion of income from technological connection, which investors prefer to null in the forecasts due to its instability The unfair dividend policy, entailing redistribution of value from holders of ordinary shares to holders of preferred shares A low investor interest in the distribution grid complex due to the uncertainty regarding the tariff regulation and prospects for RAB Concerns and comments To build a financial model of the Company for a five-year period it is necessary to wait for a policy decision of regulators regarding the rates of growth and the future of RAB-regulation Following the implementation of the additional issues of ordinary shares in 2011- 2013 by public subscription, the amount of shares in free float will increase, thus resulting in the increase of securities' liquidity In accordance with the approved Business plan of the Company for 2011-2015, the share of revenue from the services of technological connection is reduced, reaching 9% in 2015 (in 2011 the plan is 22%). It is assumed that starting from 2014, profit from electricity transmission services will be positive Feasibility of financing the Investment program by the funds received from the additional issues of ordinary shares Funds received from the additional issues of ordinary shares in 2011-2013 will be directed to the implementation of the target program – renovation of the cable network in St.-Petersburg. The program is federal in nature, therefore for its implementation the funds are sent from the federal budget (through the participation of JSC"IDGC Holding"), as well as the funds of the city budget (through participation of the CPMC, SPb). Funding for the target program is carried out by means of additional shares as a direct budget subsidies for a JSC is impossible Factors, limiting the investment demand Comment of the management of JSC "Lenenergo" | 17 Key factors to address this issue is the approval by the Russian government of the strategy of JSC "IDGC Holding" and the distribution-grid complex of Russia, as well as achieving by the Company a sufficient level of profits for distribution between shareholders. The Company is planning to decide the issue of the existing imbalance in the dividend policy while respecting the legitimate rights of all shareholders
  21. 21. THANK YOU FOR YOUR ATTENTION!
  22. 22. JSC "Lenenergo" 196247, Russia, St.-Petersburg, Constitution Square,1 Head of Department for Corporate Governance Andrey S. Smolnikov Tel./ fax +7 (812) 595 31 76 Smolnikov.AS@nwenergo.com Investor Relations Ulyana E. Davydova Tel. +7 (812) 494 39 06 Fax +7 (812) 494 37 34 ir@lenenergo.ru Davydova.UE@nwenergo.com www.lenenergo.ru CONTACTS

×