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Based on the results of the publication of the unaudited consolidated interim condensed financial statements for 3 months of 2020 under IFRS, the management of IDGC of Centre (hereinafter referred to as Rosseti Centre) – managing organization of IDGC of Centre and Volga Region (hereinafter referred to as Rosseti Centre and Volga Region) together with Sova Capital held a conference call to webcast a presentation dedicated to the performance results of Rosseti Centre and Rosseti Centre and Volga Region for 3 months of 2020. Rosseti Centre at the event was represented by Deputy General Director for Economy and Finance Artem Aleshin and Head of IR Division Sergey Ternikov. The main topics for discussion were data of consolidated financial statements under IFRS for 3 months of 2020, production results and key factors that have had the greatest impact on the recent activities of the Companies. The management also shared their views on the immediate prospects of the Companies.
The presentation of the results confirmed the stability of the Companies’ business model to external negative factors. The market share in the territories of presence is stable and seeks to increase due to the implemented consolidation projects. Despite the decline in the volume of electricity transmission services, which were caused both by climatic circumstances and the influence of restrictive measures due to the COVID-19 epidemic, the Companies managed to record growth in key financial indicators. Work continued on all performance improvement programs. Particular attention was paid to reducing losses in grids of Rosseti Centre and Rosseti Centre and Volga Region, which in for 3 months of 2020 amounted to 0.85 p.p. and 0.64 p.p., respectively. The volume of connected capacity for both Companies increased, which is associated with the execution of major technological connection agreements in the 1 quarter of 2020. The positive moment was the increase in non-tariff revenue for 3 months of 2020, which is a logical result of the efforts of the Companies to develop value-added services. In the future, by 2024, revenue from other activities should be at least 5% of the total. In the reporting period, the Companies showed an increase in the EBITDA and net profit due to the effective work to reduce transaction costs. Work on optimizing the costs of servicing the loan portfolio led to a decrease in the average weighted borrowing rate as at 31 March 2020.
Answering the questions of the participants of the conference call, Artem Aleshin noted that quarantine measures had a negative impact on the performance of the Companies, however, the market situation is better than forecast at the beginning of the epidemic. Payment discipline indicators are under pressure, but the necessary set of measures is being taken to maximize financial stability. As a positive factor in the current situation, the attention of the participants was focused on the fact that the drop in net supply is partially offset by the cold weather in April and May. The Companies use all instruments to maintain liquidity, including through maximum optimization of non-production costs and refinement of investment program parameters. The Companies make every possible effort to minimize the consequences of the unfavourable epidemiological situation, and are also aimed at continuing to work to increase their market share.
“The Companies are optimistic about the future. All projects aimed at improving efficiency have clearly demonstrated their effectiveness, which is confirmed by the financial results for 3 months of 2020. We hope to maintain this positive trend until the end of the year,” emphasized Artem Aleshin.
The presentation of Rosseti Centre (only in Russian) is available on the link.
The presentation of Rosseti Centre and Volga Region (only in Russian) is available on the link.