9M 2011 Operational & Financial Results of JSC "Lenenergo"

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9M 2011 Operational & Financial Results of JSC "Lenenergo"

  1. 1. 9M 2011Operational & Financial Results of JSC “Lenenergo”
  2. 2. DisclaimerThis 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 forentering 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 theintentions, opinions or current expectations of Lenenergo as regards the results of its activity, financial position, liquidity, prospects ofgrowth, strategy and the industry, in which Lenenergo operates. Such estimates by their nature are characterized by presence of risks anduncertainty 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, itsfinancial position and liquidity, as well as development of the industry, in which it operates, may significantly differ from those included inthe estimates contained herein. Besides, even if the results of the Companys activities, its financial position and liquidity, as well as thedevelopment of the industry, in which it operates, correspond to the estimates contained herein, such results and events are notindicative 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. Thisinformation has been received from the sources which are reliable in JSC “Lenenergo” opinion. Nevertheless, we do not guarantee theaccuracy of such information which may be reduced or incomplete. All opinions and estimates contained herein reflect our opinion as atthe date of publication and are subject to change without notice. JSC “Lenenergo” does not bear liability for the consequences of use ofthe 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 inrespect of updating of the information contained herein.
  3. 3. General Information on the Company JSC "LENENERGO" is a large distribution grid company (the operator of 0.4-110 kV The Company’s share on the market of electric power transmission networks), servicing the territory of St.-Petersburg and the Leningrad region. as of 30.09.2011 St.-Petersburg – 77.1% Leningrad region – 61.3% 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 Major competitors: municipal electric network companies JSC "SPbES" (St. individuals to the power grids Petersburg) and JSC "LOESK" (the Leningrad region) Share of JSC "Lenenergo" in Saint-Petersburg and the Leningrad region in electric power transmission as of 30.09.2011 – 71.3% The structure of JSC "Lenenergo" includes 9 operational units in Saint-Petersburg and the Leningrad region. Average number of JSC "Lenenergo" personnel as of 30.09.2011 amounted to 6,103 persons. Servicing area, thousand sq km 87.3 Region population, mln people 6.2 Authorized capital of JSC "Lenenergo" – RUR 1,019,285,990.004 Structure of the Company’s share capital**, % from share capital JSC "IDGC Holding"Preferred shares93,264,311 pcs JSC "Lenenergo" shares Quotation lists 50,31% 9.15 other % MICEX Stock Exchange B 5,51% THE NORTHERN TRUST COMPANY RTS Stock Exchange А-2 0,96% JP MORGAN 2,47% Tickers RUSENERGO FUND LIMITED 2,75% 90.85 4,09% % Ordinary shares LSNG ENERGYO SOLUTIONS RUSSIA LIMITED (EOS Russia) Preferred shares LSNGP 8,76% I.D.E.ELECTRICITY DISTRIBUTION INVESTMENTS 1 LIMITED (JSC "IES Holding") Ordinary shares Capitalization 440 25,16% 928,021,679.004 pcs as of 30.09.2011, mln USD* * The calculation is made on the capitalization weighted average ** As of the closing date of the register The city of St.-Petersburg price on the MICEX exchange at the rate of the Central Bank on 11.05.2011 (CPMC) that date | 1
  4. 4. Key results of the Company’s performanceAssets of JSC "Lenenergo" Unit 2008 2009 2010 9M 2011Installed capacity MVa 19,365.5 19,901.4 20,740.5 21,127.0OTL 0.38-110 kV by circuits km 39,084.6 39,285.9 39,418.8 39,616.9OTL 0.38-110 kV on line km 35,966.5 36,148.2 36,273.6 36,428.4Cable lines 0.38-110 kV km 16,730.9 17,650.7 18,622.3 18,627.1Substations 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) 14,533 (7,581)Dynamics of key indicators of JSC "Lenenergo" 2008 2009 2010 9M 2011 25,571 + 7.0% 27,372 12,434 14,026 Capitalization (MICEX), RUR mln 26,088 + 31.1% 34,201 20,828 26,910 Revenue, RUR mln + 26.4% 10,356 5,566 8,190 6,416 EBITDA, RUR mln 3,258 3,806 + 16.8% 1,540 1,192 Net profit, RUR mln 28,439 27,672 + 5.1% 29,095 21,154 Productive supply, mln kWh | 2
  5. 5. Securities of JSC "Lenenergo" in 2010-2011 Dynamics of JSC "Lenenergo" securities in 2010-2011 Capitalization of JSC "Lenenergo" in 2010-2011, RUR mln* 28 108 27 416 27 372 28 477 28 332 26 719 24 958 21 881 60 000 50,00 19 094 20 047 17091 45,00 14026 50 000 40,00 40 000 35,00 30,00 30 000 25,00 окт.10 ноя.10 дек.10 янв.11 фев.11 мар.11 апр.11 май.11 июн.11 июл.11 авг.11 сен.11 20,00 20 000 15,00 10,00 Capitalization*, RUR mln 2008 2009 2010 2010/2009, % 10 000 5,00 MICEX SE 12,434 25,571 27,372 +7.0 % - 0,00 RTS SE 11,739 25,703 27,516 +7.1% Dynamics of DGCs’ capitalization for 9M 2011 (MICEX), RUR bln* Суммарная АО average Ordinary shares АП average shares Proffered Totaled capitalization капитализация 228 MICEX SE Price as of 30.09.2011, RUR 30.12.2010 LSNG (MICEX) 12.99 LSNGP (MICEX) 21.44 30.09.2011 94 79 72 Dynamics of MICEX, MICEX PWR and ordinary shares of JSC "Lenenergo" in 2010-2011 56 33 27 34 29 32 28 14 20 15 16 14 22 9 5 2 9 4 p.p. RUR 4000,00 35,00 Сибири Центра Ленэнерго МРСК С-З МРСК Урала Волги МОЭСК МРСК ЦиП МРСК СК МРСК MOESK IDGC of Center Lenenergo Volga IDGC of Center and IDGC of Urals IDGC of Volga IDGC of Siberia Caucasus IDGC of North IDGC of South IDGC Holding IDGC of North-West Холдинг МРСК Юга МРСК МРСК 3500,00 МРСК 30,00 3000,00 25,00 2500,00 20,00 2000,00 15,00 1500,00 1000,00 10,00 * Calculation is executed by an average price at the MICEX 500,00 5,00 0,00 0,00 Dividends of JSC "Lenenergo" for 2008-2010, RUR mln** Accrued dividends, Year Dividends on OS, RUR Dividends on PS, RUR RUR thousand MICEX MICEX PWR Average OSАО ЛЭ average LE for 2008 no 1.6508 153,962 30.09.2010 30.09.2011 ∆,% In 3Q 2011 the Company’s shares traded in the for 2009 no 3.4933 325,804 general downward trend with DGCs and the for 2010 no 4.0804 380,559MICEX 1440.30 1366.54 -5.12 industry index, reflecting investors lack ofMICEX PWR 3294.35 2089.77 -36.56 confidence due to the uncertainty of the tariff ** In accordance with the Charter of JSC "Lenenergo" dividends are accrued on preferredaverage OS LE 23.57 12.99 -44.88 regulation shares of type A in the amount of 10% of net profit for the completed fiscal year | 3
  6. 6. Overview of key financial results of JSC "Lenenergo" for 9M 2011. Forecast for 2011 Δ, % 2011 plan Indicator Unit 9M 2010 9M 2011 9M 2011 / adjusted* 9M 2010Book value of assets RUR mln 86,066 92,806 7.8% 99 668Net assets RUR mln 50,306 52,341 4.0% 52 051Equity RUR mln 50,165 52,341 4.3% 51 922 **ROE % 4.51% 2.20% -51.2% 1.34%Revenue from sales of products, including: RUR mln 23,172 26,910 16.1% 37 889- from services on electric power transmission RUR mln 16,160 21,015 30.0% 29 555- from services on technological connection RUR mln 6,894 5,774 -16.2% 8 161- from other industrial activity RUR mln 118 121 3.2% 174Cost of goods sold RUR mln 19,244 23,339 21.3% 34 045EBITDA RUR mln 6,872 6,416 -6.6% 7 696Profit on sales RUR mln 3,927 3,571 -9.1% 3 844Profit before taxes RUR mln 3,118 1,913 -38.6% 1 474Net profit RUR mln 2,211 1,192 -46.1% 693EBITDA margin % 29.7% 23.8% -19.6% 20.3%DEBT/EBITDA - 3.23 3.93 21.6% 3.10 ***Debt as at the end of the period RUR mln 13,878 18,674 34.6% 28 406Net debt RUR mln 13,627 17,458 28.1% 27 404Ratio of equity and borrowed funds - 1.40 1.29 -7.4% 1.09Leverage % 21.7% 26.3% 21.3% 35.4%Ratio of receivables and payables - 0.56 0.41 -26.5% 0.56• Forecasted indicators are formed in compliance with the adjusted Business plan of JSC “Lenenergo” for 2011 (taking into account the revise of tariffs for 2011 and results of 1Q2011** 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) | 4
  7. 7. Electric power transmission of JSC "Lenenergo" for 9M 2011 Supply to grid, Productive supply, Total losses in grids Losses in JSC "Lenenergo” grids mln kWh mln kWhIndicators Mln Mln Mln Mln % % % % 9M 2010 9M 2011 9M 2010 9M 2011 kWh kWh kWh kWh 9M 2010 9M 2011 9M 2010 9M 2011JSC "Lenenergo", including: 23,874 24,246 20,856 21,154 3,017 12.6 3,092 12.8 2,496 10.5 2,444 10.1Saint Petersburg 15,024 15,408 13,279 13,521 1,746 11.6 1,887 12.2 1,582 10.5 1,600 10.4Leningrad Region 8,849 8,838 7,578 7,633 1,271 14.4 1,205 13.6 913 10.3 844 9.6Dynamics of indicators of electric power transmission on JSC "Lenenergo" grids for 9M Dynamics of productive supply, mln kWh2010 – 2011, mln kWh 29,095 29,421 28,439 27,672 +1.56% +1.43% 2008 2009 2010 Plan 2011 план Losses in JSC "Lenenergo" grids are 23,874 24,246 significantly lower the losses in the Dynamics of losses in JSC "Lenenergo" grids, % adjacent network organizations 20,856 21,154 10.7 10.6 10.3 10.0 +2.49% -2.08% 2008 2009 2010 Plan 2011 план 3,017 3,092 2,496 2,444 The Company is implementing the Program on reduction of electricity losses in grids, according to which a target level of Supply to grid Отпуск в сеть Productive supply Полезный отпуск Общиеlosses in в сетях Total потери grids Потери в сетяхin Total losses ОАО electricity losses in the grids of JSC "Lenenergo" in 2015 is 9.1% JSC "Lenenergo" "Ленэнерго" grids 9 мес. 2010 9M 2010 99M 2011 мес. 2011 | 5
  8. 8. Technological connection of JSC "Lenenergo" for 9M 2011 Contracts concluded Contracts closed The Leningrad region shows the main Region demand for technological connections for pcs MW pcs MW pcs MW pcs MW 9M 2011 – 75.5% of the total contracts 9M 2010 9M 2011 9M 2010 9M 2011 concluded (for 9M 2010 – 88.5%).JSC "Lenenergo" 7,790 394.8 10,040 297.7 2,718 455.7 3,941 208.6 The main number of contracts closed for 9MSaint Petersburg 896 126.6 2,459 119.7 873 335.9 1,555 101.5 2011 also accounts for the Leningrad Region – 60.5% (for 9M 2010 – 69%).Leningrad Region 6,894 268.2 7,581 178.0 1,845 119.8 2,386 107.1Outcomes of technological connection of JSC "Lenenergo" for 9M 2010 – 2011, pcs (MW) + 29% For 9M 2011 more contracts were concluded and closed as compared to the 10,040 same period of the last year, but the overall capacity on the contracts concluded 7,790 + 45% and contracts closed declined. The excess of capacity (in MW) on performed 297.7 obligations for 9M 2010 over 9M 2011 is caused by the performance in 2010 of a MW significant share of property obligations. 394.8 3,941 Reduction in the total capacity at the simultaneous increase in the number of MW 2,718 contracts for 9M 2011 is also associated with an increase in the number of 208.6 455.7 MW contracts concluded for the capacity of up to 15 kW MW Contracts concluded Contracts closed заключено договоров закрыто договоров 9 мес. 2010 9M 2010 9 мес. 2011 9M 2011 Execution of overdue obligations on TC for 9M 2011 Structure of revenues from TC for 9M 2010 - 2011, RUR mln Share, % Share, % RUR mln share, % 9M 2010 9M 2011 (9M 2010) (9M 2011)Revenues from TC, including 5,774 100 Revenues from TC, incld. 6,894 100% 5,774 100%On existing contracts Execution on monetary 426 8 1,971 28.6% 4,467 77.4%(term of services after 01.01.2011) contractsOn overdue contracts Execution on property 5,348 92 4,923 71.4% 1,307 22.6%(term of services prior to 01.01.2011) contracts | 6
  9. 9. Key financial indicators of JSC "Lenenergo" for 9M 2011 Generation of profits from sales and net profit, RUR mln EBITDA, RUR mln The decline in EBITDA for 9 +21.3% -46.1% months of 2011 was caused by +16.1% -9.1 % -6.6% the increase in the negative balance of other income and 26,910 6872 expenses (excluding interest 23,172 23,339 payable) – by RUR 790 mln, while 19,244 6416 the value of EBIT (profit obtained as the difference between revenues and costs less 3,927 3,571 9 мес.2010 9M 2010 99M 2011 мес.2011 amortization) increased by a 2,211 1,192 smaller amount - RUR 333 EBITDA margin, % mln(4.8%) Выручка отrevenue Sales реализации COGS Себестоимость Прибыль от profit Gross реализации Чистая profit Net прибыль 29.7% 23.8% 99M 2010 мес.2010 9 9M 2011 мес.2011 Revenue by types of activity*, RUR mln COGS by types of activity*, RUR mln COGS structure, RUR thousand Indicator 9M 2010 9M 2011 Δ in % 23,172 +16.1% 26,910 19,244 +21.3% 23,339 Controllable costs 3,511,882 3,744,803 6.6% 21.5% 5,774 867 Material expenditures 888,039 898,924 1.2% 29.8% 993 3.7% 6,894 5.2% Wage fund 1,641,889 1,888,625 15.0% Other costs 981,953 957,254 -2.5% 21,015 22,417 16,160 18,198 96.0% Non-controllable costs 15,732,327 19,594,415 24.5% 78.1% 94.6% 69.7 % Purchased power for 3,468,293 3,805,472 9.7% 9M 2010 9M 2011 9M 2010 9M 2011 compensation of losses 9 мес.2010 9 мес.2011 9 мес.2010 9 мес.2011 Services on electric power from electricity поfrom electricity передаче э/э по ТП TC отtransmission э/э передачи отfrom TC ТП from transmission over grids of 3,828,002 5,898,019 54.1% transmission* Including other activities, the amount of revenue and COGS of which is less than 1% of the total sum adjacent DGCs Payment for services of JSC 3,664,189 4,536,880 23.8% Revenue growth of the Company for the 9 months of 2011 as compared to the same period of the previous “UES FGC” reporting year constituted 16.1%, or RUR 3,739 mln. Depreciation 3,049,897 3,739,324 22.6% The revenue growth on electric power transmission amounted to 30.0%, or RUR 4,855 mln. The growth of the Leasing payments 1,215,678 900,474 -25.9% revenue was associated with the increased rates for electric power transmission (the increase of the average tariff for 9M 2011 as compared to 9M 2010 amounted to: in St.-Petersburg - 37%, in the Leningrad region - 20%). At the Other costs 506,270 714,247 41.1% same time the revenue from technological connection for the 9 months of 2011 as compared to the same period of the previous reporting year decreased by 16.2% (RUR 1,120mln), which is associated with the decrease in TOTAL costs 19,244,209 23,339,218 21.3% revenues under property contracts. | 7
  10. 10. Loan portfolio and debt position of JSC "Lenenergo" for 9M 2011 Equity structure, RUR mln Credit resources flow for 9M 2011, RUR mln Δ, % 18,503 9M 2010 9M 2011 9M 2011/ 14,562 9M 2010 7,266Equity 50,165 52,341 4.3% 3,325Liabilities, including: 35,901 40,465 12.7%Long-term liabilities 13,532 15,008 10.9% Остаток на Привлечение Attraction of Возврат заемных Остаток наShort-term liabilities 22,369 25,458 13.8% Balance as of Repayment on Balance as of 31.12.2010 г. заемных средств и средств и выплата % credits and 30.09.2011 г.Ratio of equity and liabilities 1.40 1.29 -7.4% 31.12.2010 credits 30.09.2011 начисление % accrualLeverage 21.7% 26.3% 21.3% •RUR 12,503 mln – long-term liabilities on the sum of main debt; Loan portfolio, RUR mln •RUR 6,000 mln – short-term liabilities on the sum of main debt on bonded loans of series 02 and 03, transferred in the structure of short-term liabilities in compliance with RAS: up Δ, % to their maturity there is less than a year; 9M 2010 9M 2011 9M 2011/ •RUR 171 mln – the sum of accrued interests on long-term and short-term credits and 9M 2010 loans. Long-term credits and loans, including: 12,486 12,503 0.1% bonded loan (maturity in 2012) 6,000 - - Short-term credits and loans*, including: 1,392 6,171 343.3% Key banks - partners Weight average rate of bonded loan (maturity in 2012) - 6,000 - of JSC "Lenenergo": borrowings for 9M 2011 Accounts payable** 20,948 20,214 -3.5% SBERBANK OF RUSSIA * Liabilities on bonded loans of series 02 and 03 in the amount of RUR 6,000 mln as of 30.09.2011 BANK VTB SAINT PETERSBURG was transferred in accordance with the requirements of the AS in the short-term liabilities in connection with the upcoming maturity in 2012. JSCB SVYAZ-BANK 7.8% JSB ROSSIYA ** The amount of aggregate (long-term and short-term) accounts payable is displayed. Debt position, RUR mln Credit rating Δ, % Agency Rating Assigned 9M 2010 9M 2011 9M 2011/ Ba2 9M 2010 Moody’s November 2009 (forecast stable)Debt / EBITDA 13,878 18,674 34.6%Debt as at the end of the period** 2,02 2.91 44.1% Moody’s Interfax Rating Agency Aa2.ru November 2009 13,627 17,458 28.1% (rating on national scale) (forecast stable)Net debt*Debt as at the end of the period is calculated as the sum of long-term and short-term liabilities plus Confirmed in March 2011liabilities on accrued but not paid interests | 8
  11. 11. Implementation of investment program of JSC "Lenenergo" for 9M 2011The adjusted investment program for 2011 was approved by JSC "IDGC Holding" in the amount of capital investments - RUR 15,633 mln. The actualdisbursement of capital investments for 9M 2011 amounted to RUR 8,062 mlnParameters of the investment program, RUR mln St.-Petersburg Leningrad Region JSC “Lenenergo” Δ, % Δ, % Δ, % Indicator 9M 2011 / 9M 2011 / 9M 2011 / 9M 2010 9M 2011 9M 2010 9M 2010 9M 2011 9M 2010 9M 2010 9M 2011 9M 2010Disbursement, RUR mln net of VAT 7,962 5,702 -28% 1,706 2,361 38% 9,668 8,062 -17%Commissioning of fixed assets, RUR 6,709 4,523 -33% 1,064 2,903 173% 7,773 7,426 -4%mlnFunding, RUR mln including VAT 8,589 6,743 -21% 2,266 2,405 6% 10,855 9,149 -16%Power input , МV 404 290 -28% 176 91 -48% 580 381 -34%Power input, km 618 505 -18% 239 375 57% 857 880 3%Growth of power, MVA 384 254 -34% 105 63 -40% 489 317 -35%Growth of power, km 590 472 -20% 175 228 30% 765 700 -8% Volume of capital investments for 9M 2010 and 2011, RUR mln (net of VAT) CAPEX, RUR mln 9,668 8,062 Δ, % 9M 2011 / JSC “Lenenergo” 9M 2010 9M 2011 9M 2010 6,837 5,143 TOTAL 9,668 8,062 -17% Modernization and renovation 1,918 2,917 52% 1,918 2,917 New construction 6,837 5,143 -25% 99M 2010 мес. 2010 99M 2011 мес. 2011 Other 913 2 -99.8% M&C ТПиР Новое construction New строительство | 9
  12. 12. CONTACTSJSC "Lenenergo"196247, Russia, St.-Petersburg, Constitution Square,1Head of Department for Corporate GovernanceAndrey S. SmolnikovTel./ fax +7 (812) 595 31 76Smolnikov.AS@nwenergo.comInvestor RelationsUlyana E. DavydovaTel. +7 (812) 494 39 06Fax +7 (812) 494 37 34ir@lenenergo.ruDavydova.UE@nwenergo.comwww.lenenergo.ru

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