IDGC of Centre has published its audited consolidated financial statements under International Financial Reporting Standards (IFRS) for the year ended 31 December 2016

IDGC of Centre has published its consolidated financial statements for 2016 in accordance with IFRS. Consolidated revenues of the Company for the period amounted to 86,3 bln RUB, including from electric energy transmission — 83,6 bln RUB, from grid connection — 1,4 bln RUB and other revenue — 1,3 bln RUB. Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to 17,9 bln RUB. Profit/(loss) for the period rose by 3,9 bln RUB and amounted to 4,8 bln RUB.

Data in billion RUB, unless specified otherwise

In connection with the execution by IDGC of Centre from 01 December 2016 of the functions of the electricity supplier of last resort in the service area of Joint Stock Company "Transservicenergo" in the Tver region the revenue from resale of electric energy and power for the purpose of analysis is posted in the other revenue in the amount of 51,6 mln RUB.

The change in consolidated revenues in 2016 is mainly due to growth in revenue from electricity transmission services due to an increase in the average tariff and a gain in the volume of productive supply, as well as a decrease in other revenue due to a reduction in revenues under the concession agreement with the Administration of the Tambov region, which entered into force in 2015.

Operating costs of the Company for 2016 amounted to 78,8 bln RUB, which is 4,8% higher than the same indicator for 2015. The main factors of the increase in the expenses were the growth of uncontrolled electricity transmission costs by 5,7% and the purchase of electricity to compensate for losses by 12,3%, as well as the growth of reserves for impairment of receivables by 33,3%. Provisions were made for the impairment of trade receivables from companies with which there are disagreements over the transmission of electricity, as well as for companies that are in arrears with resale of electric energy and power for the period of 2013-2014. Depreciation amounted to 8,7 bln RUB by the end of 2016, which is 0,9 bln RUB higher than the same indicator last year. Additional factors that affected the change in the company’s expenses were a decrease in expenses under the concession agreement by 0,8 bln RUB, as well as reversal of impairment of fixed assets for 2014-2015 in the amount of 0,6 bln RUB in 2016.

Other revenues of the company increased by 21,4% mainly due to write-off of accounts payable and increase in income in the form of fines, penalties and liquidated damages. The EBITDA of the company in the reporting period increased by 20,9% and amounted to 17,9 bln RUB. The EBITDA margin increased by 1.9 percentage points and amounted to 20,7% in 2016. The profit for the period increased by more than 5 times and amounted to 4,8 bln RUB in 2016. The most significant impact on the Company’s financial results was provided by the growth of revenue from electricity transmission services, the need to create provisions for doubtful debts, the reversal of impairment of fixed assets, including through depreciation, and the resulting profit tax savings due to tax adjustments for prior years and recognition of deferred taxes in accordance with IFRS.

As at 31 December 2016 IDGC of Centre’s assets totalled 107,0 bln RUB (as at 31 December 2015 — 100,4 bln RUB). Net debt¹ decreased to 40,7 bln RUB (as at 31 December 2015 — 42,0 bln RUB). The indicator decreased due to an increase in cash on the company’s accounts at the end of the reporting period.

The Company’s consolidated financial statements can be found at: https://www.mrsk-1.ru/en/information/statements/msfo/2016/.