FINANCIAL RESULTS The main indicators describing the financial condition can be found in Appendix No. 1 to the Annual Report on the Company’s website.
REVENUE
Revenue from sales of products (services) at year-end 2023 is RUB 6,038 million (14.3%) higher than in 2022, including revenue from electricity
Branch | Total revenue, RUB mln | Share in the total revenue, % | Grid services (electricity transmission) | Share in the total value across Rosseti South, % | Grid services (grid connection) | Total share across Rosseti South, % | Electricity and capacity resale | Total share across Rosseti South, % | Other services | Total share across Rosseti South, % |
|---|---|---|---|---|---|---|---|---|---|---|
Astrakhanenergo | 6,885 | 14.3 | 6,685 | 14.9 | 146 | 24 | – | 0 | 54 | 12 |
Volgogradenergo | 12,544 | 26.1 | 12,287 | 27.3 | 132 | 21.7 | – | 0 | 126 | 27.7 |
Kalmenergo | 4,147 | 8.6 | 2,020 | 4.5 | 26 | 4.3 | 2,057 | 98 | 45 | 9.8 |
Rostovenergo | 24,474 | 50.8 | 23,999 | 53.3 | 304 | 50 | – | 0 | 171 | 37.7 |
Kubanenergo | 56 | 0.1 | 0 | 0.0 | 0 | 0 | – | 0 | 56 | 12.3 |
Executive Office | 44 | 0.1 | 0 | 0.0 | 0 | 0 | 42 | 2 | 2 | 0.4 |
Total | 48,151 | 100.0 | 44,991 | 100.0 | 607 | 100 | 2,099 | 100 | 454 | 100.0 |
EXPENDITURES
Cost of sales is RUB 4,158 million (11.3%) above the 2022 level. These developments were caused mainly by an increased expenditure on purchased electricity to compensate for losses by RUB 997 million because of a 12.1% increase in the tariff for purchased electricity to compensate for losses and an increase in expenditure on services provided by PJSC FGC-Rosseti by RUB 1,332 million, or by 17.3%. This, in turn, was conditioned by an 18.8% increase in the rate for the maintenance of UNPG facilities, as well as a 17.6% increase in the rate for compensation of electricity losses, increase in expenses on payment for LGO services by RUB 400 million, or 11%, due to a 10.95% increase in the average tariff, increase in expenditures on purchased electricity for sales by RUB 67 million, or 8.5%, due to a 5.2 million kWh or 1.2% decrease in the volume of purchased electricity, while the average tariff increased by RUB 174.6/kWh, as well as increase in personnel expenses by RUB 994 million due to indexation of minimum monthly wage rate by 10% from 1 July 2022 and by 5.4% since 1 January 2023. Other costs are higher by RUB 368 million mainly due to the need to implement the repair programme for priority activities, as well as the growth in other revenue.
The financial result increased by RUB 2,990 million year-on-year due to an increase in revenue from electricity transmission services, as well as a decrease in the negative balance of other income and expenses due to the recognition of income in the form of reversal of provision for impairment of financial investments worth RUB 1,425 million and a decrease in interest expenses.
Indicators | UoM | Period | ||||
|---|---|---|---|---|---|---|
2021, actual | 2022, actual | 2023, actual | Change 2023/2022, % | |||
Financial indicators | ||||||
1 | Proceeds from product (service) sales, including: | RUB mln | 41,454 | 42,113 | 48,151 | 14.3 |
1.1. | From electricity transmission | RUB mln | 37,798 | 39,141 | 44,991 | 14.9 |
1.2. | From grid connections | RUB mln | 2,025 | 603 | 607 | 0.7 |
1.3. | From electricity sales | RUB mln | 1,354 | 2,020 | 2,099 | 3.9 |
1.4. | From other services | RUB mln | 277 | 350 | 454 | 29.9 |
2 | Production costs of products (services) | RUB mln | 36,010 | 36,644 | 40,802 | 11.3 |
3 | Gross profit | RUB mln | 5,444 | 5,469 | 7,349 | 34.4 |
4 | Management costs | RUB mln | 877 | 902 | 944 | 4.6 |
5 | Selling costs | RUB mln | 87 | 138 | 149 | 7.8 |
6 | Profit (loss) from sales | RUB mln | 4,481 | 4,428 | 6,255 | 41.3 |
7 | Interest receivable | RUB mln | 379 | 476 | 313 | –34.2 |
8 | Interest payable | RUB mln | 1,747 | 2,350 | 2,278 | –3.0 |
9 | Income from shareholdings | RUB mln | 0 | 7 | 12 | 81.8 |
10 | Other revenues | RUB mln | 3,664 | 3,279 | 3,986 | 21.6 |
11 | Other expenses | RUB mln | 4,144 | 6,144 | 5,009 | –18.5 |
12 | Profit (loss) before tax | RUB mln | 2,633 | –305 | 3,279 | –175.1 |
13 | Income tax and other charges | RUB mln | 573 | 254 | 848 | 233.6 |
14 | Net profit (loss) | RUB mln | 2,061 | –559 | 2,431 | –534.6 |
15 | EBITDAEBITDA is calculated as follows: pre-tax profit before interest expense, depreciation, amortisation and net charge/(reversal of) impairment loss on fixed assets and rights-of-use assets. | RUB mln | 7,652 | 4,932 | 9,741 | 121.4 |
Indicators | Period | |||
|---|---|---|---|---|
2021 | 2022 | 2023 | Absolute variance (2023/2022) | |
Net debt/EBITDA | 2.97 | 3.56 | 2.25 | –1.32 |
Current liquidity ratio | 0.45 | 0.66 | 0.67 | 0.01 |
Share of long-term borrowings | 0.63 | 0.69 | 0.66 | –0.03 |
Net cash flow, RUB mln | –2,935.62 | 1,355.35 | 2,432.75 | 1,077.40 |
The drop in Net Debt / EBITDA by 1.32 was driven by EBITDA growth.
The increase in Net Cash Flow in 2023 comes from improved operating cash flow.
Indicator | 31.12.2023 | 31.12.2022 | 31.12.2021 |
|---|---|---|---|
Net assets | 5,236,841 | 2,811,149 | 3,356,624 |
Authorised capital | 15,164,143 | 15,164,143 | 15,164,143 |
The Company’s net assets as at 31 December 2023 were below the share capital by RUB 9,927 million. The reasons for this ratio are as follows:
- An additional issue of shares in 2021, which increased the authorised capital of PJSC Rosseti South by RUB 6,960.2 million by placing 69,601,830,929 (Sixty-nine billion six hundred and one million eight hundred and thirty thousand nine hundred and twenty-nine) additional ordinary registered uncertificated shares with a par value of 10 (ten) kopecks each for a total par value of RUB 6,960,183,092 (Six billion nine hundred and sixty million one hundred and eighty-three thousand ninety-two) each 90 kopecks
- Recognition of an impairment loss on power grid assets as at the date of transition to FAS 6/2020 (adjusting the figures as at 31 December 2021) and retention of the impairment test value as at 31 December 2023
Considering changes in the economic situation in the country, the legislator stipulated that the above provisions do not apply after 2023 (Federal Law No. 46-FZ dated 8 March 2022 “On Amendments to Certain Legislative Acts of the Russian Federation Concerning the Unification of the Content of Annual Reports of State Corporations (Companies), Public-Law Companies, as well as Concerning the Establishment of the Specifics of Regulation of Corporate Relations in 2023 and Suspension of the Provisions of Certain Legislative Acts of the Russian Federation” (as amended and supplemented) for the purposes of applying paragraphs 4 and 6 of Article 35 of Federal Law 208-FZ “On Joint Stock Companies”.
In order to improve the financial and economic performance of Rosseti South, including bringing the net asset value in line with the authorised capital, the management put in place measures to challenge tariff and balance decisions on electricity transmission through legal proceedings, increase electricity transmission tariffs beyond the parameters stipulated by the current Forecast of Socio-Economic Development of the Russian Federation, and reduce the debt burden.
For example, steps have been taken to ensure growth of tariffs for electricity transmission beyond the Socio-Economic Forecast parameters from 1 December 2022 in the Volgograd and Astrakhan Regions (in the Volgograd
In our effort to overturn tariff balance solutions on the Astrakhanenergo branch’s electricity transmission (specifically, the tariff balance solutions for 2021 and 2022), we were able to influence the court’s ruling on the matter of Interest on loans in a way that was favourable. The court decisions came into legal force, but at the moment have not been enforced by the Astrakhan Regional Tariff Service: in Case No. 3a-2/2022 (2021
PROCEEDS FROM SALES OF NON-CORE ASSETS
A new version of the Non-core Asset Disposal Programme of PJSC Rosseti South was approved in 2023 Approved by the decision of the Board of Directors dated 11 November 2023 (Minutes No. 552/2023 dated 13 December 2023) pursuant to Decree of the President of the Russian Federation No. 596 dated 7 May 2012 and Order of the Government of the Russian Federation No. 894r dated 10 May 2017 (as amended by Order of the Government of the Russian Federation No. 985-r dated 19 April 2023). . Prior to the above decision, the Company had the Programme approved by the decision of the Board of Directors dated 27 December 2021 (Minutes No. 462/2021 dated 30 December 2021).
The Programme defines the basic principles, the mechanism for identifying and disposing of non-core assets, establishes the criteria for classifying assets as non-core, the procedure for maintaining the non-core asset register and reporting on the progress of the non-core asset register.
In accordance with the Register of Non- Core Assets of PJSC Rosseti South as of 31 December 2022 Approved by resolution of the Board of Directors of the Company dated 16 February 2023 (Minutes No. 513/2023 dated 17 February 2023), subject to amendments made by resolutions of the Board of Directors of PJSC Rosseti South on 28 June 2023 (Minutes No. 530/2023 dated 29 June 2023) and 21 November 2023 (Minutes No. 550/2023 dated 22 November 2023). , the Company sold non-core assets in 2023.
The register of non-core assets of the Company and the action plan for their disposal as of 31 December 2023 were approved by the decision of the Board of Directors of the Company dated 7 March 2024 (Minutes No. 564/2024 dated 7 March 2024). Information on current asset sale procedures and their results is disclosed on the Company’s official website https://rosseti-yug.ru/zakupki/informatsiya-o-tekushchikh-protsedurakh-prodazhi/.
There are no non-core assets sold by PJSC Rosseti South in 2023.
In the reporting year, measures were taken to sell the property complex (production base located at 109, Shishlyannikov Street, Dubovka, Dubovsky District, Volgograd Region). The auction for the sale of the property was deemed as held successfully, the sale and purchase agreement was negotiated and signed by both parties by the Minutes dated 30 November 2023. State registration of the transfer of ownership rights in the Department of Rosreestr for the Volgograd Region are scheduled for 2024.
Information on the structure of the property complex of PJSC Rosseti South and its changes for the period from 1 January to 31 December 2023 is given in Appendix No. 3 to this Annual Report on the Company’s website.