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IDGC of Centre held a meeting of the Board of Directors that approved the Company's Business Plan for 2014, including the Investment Program

20 December 2013

December 16, 2013 a meeting of the Board of Directors of IDGC of Centre was held in person and in absentia. The meeting approved the adjusted Business Plan and Investment Program for 2013, the Company’s Business Plan and Investment Program for 2014 and forecast for 2015-2018. Furthermore, the Board of Directors approved the report of General Director of the Company «On execution of the Business Plan, including the Investment Program following the results of 9 months 2013».

The Company’s Business Plan values for 2014 are:

RUB million, unless otherwise stated

Indicators Year Change, %
2013 expected 2014 planned
Joint operation productive supply, mln kWh 55 000 54 297 (1,3%)
E/energy losses in the grid, % 9,32 9,48 0,16 п.п.
Revenue (total), including: 92 960 100 849 8,5%
   from electricity transmission 75 005 74 385 (0,8%)
   from grid connection 1 151 1 060 (7,9%)
   from resale of electric energy and power 16 000 24 522 53,3%
   from other activity 804 882 9,7%
Cost price 78 440 90 790 15,7%
EBITDA* 11 350 12 872 13,4%
Net profit 258 1 247 383,3%
Capital investment (without VAT) 14 158 9 538 (32,6%)
Dividend, % from net profit 25 25 -

* EBITDA is calculated as follows: net profit + income tax and other obligatory payments + interest payable - interest receivable + depreciation charges

According to the approved Business Plan in 2014 it provides for ensuring the growth of revenue and EBITDA by 8.5% and 13.4%, respectively, compared with the expected results in 2013. Revenue growth reflects the functions of a supplier of last resort in the planning period and an increase in revenues from other activity. The decrease in revenue for electricity transmission services in 2014 by 0.8% is planned in connection with the reduction of productive supply due to termination of «last mile» contracts. For the same reason a slight increase in the relative values of electricity losses by 0.16 percentage point is predicted. Faster growth of the cost price compared to the revenue increase is due to the restriction on the growth of tariffs for electricity transmission. Net profit for 2014 is projected to be 1 247 million rubles, which is better than expected in 2013 by 989 million rubles.

Planned capital expenditures in 2014 will amount to 9 538 million rubles, including modernization and reconstruction — 5 847 million rubles; new construction — 3 650 million rubles; other — 41 million rubles. The main directions of the Investment Program in 2014: renovation of the main equipment, grid connection, energy saving and energy efficiency, development of management systems, improving the security of power facilities.

The Business Plan for 2014 is formed taking into account the implementation of the efficiency management program, including reduced investment costs for the purchase of goods, works and services per unit of production by 10% to the base in 2010 and decreased operating costs by 5% to the base in 2012.

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