Economics and finance

Key financial indicators*

RusHydro Group’s financial results reflect a decrease in electricity generation in 1H 2019 due to lower water inflow to the majority of HPP reservoirs, a drop in DAM prices in Siberia during 2H 2019, and the impairment of fixed assets reaching its peak as a result of commissioning of large hydropower plants in the Far East.

Income indicators

Metric* 2017 2018 2019 2019−2018
EBITDA, RUB mn 104,180 109,673 97,544 -12,129
EBITDA margin, % 27.3 27.0 23.9 -3.1 p.p.
Net income, RUB mn 24,774 31,837 643 -31,194
Net margin, % 6.5 7.8 0.2 -7.6 p.p.
Earnings per share (EPS), RUB 0.0656 0.0739 0.0121 -0.0618
Return on assets (ROA), % 2.8 3.4 0.1 -3.3 p.p.
ROE, % 4.5 5.5 0.1 -5.4 p.p.
Adjusted net income, RUB mn 65,738 70,757 51,547 -19,210

In the reporting period, EBITDA declined by 11.1% y-o-y to RUB 97.5 bn.

Net income amounted to RUB 643 mn (down by 98.0%), while adjusted net income totaled RUB 51,547 mn (down by 27.1%).

Andrey Kazachenkov
Member of the Management Board, First Deputy General Director

— Comfortable leverage, high liquidity level for uninterrupted operations and continuous business development remain the main priorities of RusHydro’s financial policy.

Andrey Kazachenkov
Member of the Management Board, First Deputy General Director

— Comfortable leverage, high liquidity level for uninterrupted operations and continuous business development remain the main priorities of RusHydro’s financial policy.

In 2019, leading international rating agencies confirmed RusHydro’s investment grade credit ratings while successful Eurobond placement further justifies RusHydro’s 15-year status as Russia’s financially solid systematic infrastructure company.

Effective debt management and optimization of its structure are made possible thanks to continuous systematic management efforts aimed at improvement of RusHydro’s operational efficiency, financial stability and creation of value in the interest of all shareholders.

EBITDA and EBITDA margin
Factor analysis of EBITDA by segment, RUB bn
Factor analysis of EBITDA (expenses), RUB bn
Margin performance,%
Profit distribution for 2018*, %
Detailed information on the distribution of profit allocated, inter alia, to the Company’s development is available on the Company’s website at http://www.eng.rushydro.ru/

Total revenue

The Group’s total revenue (including government grants) in 2019 increased by 1.6% y-o-y to RUB 406.6 bn against RUB 400.4 bn in the previous reporting period.


Key drivers behind the change in revenue include:

  • a 0.2% decrease in total revenue from electricity sales associated with lower power generation by RusHydro’s HPPs (down by 4.4%);
  • growth in revenue from electricity sales by RAO ES East Subgroup by 4.7% as a result of higher average sales prices and volumes;
  • a 1.9% increase in ESC RusHydro Subgroup revenue from the sale of electricity following the conclusion of new contracts with customers and due to higher average sales prices;
  • growth in revenue from capacity sales by 9.9% on the back of higher actual prices and volumes;
  • growth in revenue from heat and hot water sales by 1.2%, mainly attributable to increased heat tariffs and net supply;
  • an 11.1% increase in other revenue due to substantial revenue growth on the back of the utility connection to the grids of Far Eastern Distribution Company (DRSK). At the same time, revenue from resale of petroleum products to VOSTEC and electricity transmission to Yakutskenergo dropped considerably.

Government grants [201−4]

In accordance with applicable laws of Russian regions, some companies of the Group received government grants to fund the costs for difference between the approved electricity and heat tariffs and tariffs in the economic feasibility study, as well as the costs for fuel and purchased electricity.

In 2019, RusHydro Group received RUB 39,983 mn in government grants.

The total grants received by the Group’s guaranteed suppliers under the Russian Government’s Resolution No. 895 On the Establishment of Base Electricity (Capacity) Rates (Tariffs) for in the Far Eastern Federal District dated July 28, 2017 amounted to RUB 23,794 mn in 2019.

The amount of regional government grants received by RusHydro Group in 2019 totaled RUB 16,189 mn. The grants were provided to companies in the following regions: Kamchatka Territory, Republic of Sakha (Yakutia), Magadan Region, Chukotka Autonomous Area, and the Sakhalin Region.

Total revenue performance and breakdown, RUB bn

Operating expenses

In 2019, total operating costs increased by 6.9% year-on-year, from RUB 314.9 bn to RUB 336.6 bn.

The change in operating costs was driven by:

  • a 5.9% increase in labor costs due to indexation of rates and salaries according to the effective collective bargaining agreements;
  • a 10.3% rise in fuel costs resulting from higher fuel prices following procurement procedures at DGK, and the growth of purchase prices for petroleum products and their increased use due to imposed restrictions on the use of gas at Kamchatskenergo;
  • a 10.8% increase in costs of purchased electricity and capacity (covered by incremental revenue) at RAO ES East Subgroup following a change in volumes and tariffs (as a result of, inter alia, Yakutskenergo entering the WECM);
  • growth in costs for third party services by 16.8% as a result of a rise in costs of utility connection to the grids of DRSK (covered by revenue) and repair and maintenance expenses at Yakutskenergo amid the lowering of lease costs (due to the adoption of IFRS 16 Leases starting January 1, 2019) and heat purchase and transportation costs;
  • a 6.4% decrease in costs of electricity transmission services of grid operators, mainly at Yakutskenergo, on the back of lowered costs of electricity transmission to Far East Energy Management Company (as its grids became part of the Unified National Electric Grid starting January 1, 2019 and were transferred to FGC UES, resulting in a substantial reduction in the transmission tariff);
  • a 15.1% rise in depreciation and amortization costs due to the commissioning of Vostochnaya CHPP and off-site facilities of Sakhalinskaya GRES-2 in 2H 2018, the launch of NizhneBureyskaya HPP in 2H 2019, and the adoption of IFRS 16 Leases starting January 1, 2019, and depreciation of right-of-use assets;
  • a 15.0% decrease in other expenses, including at VOSTEC as a result of reduced costs of petroleum products for resale.
Operating costs by year and type, RUB bn

Direct economic value generated and distributed [201−1]

Metrics, RUB bn 2017 2018 2019
Economic value generated 383.6 402.1 405.6
Operating profit 342.2 353.4 362.2
Interest income and dividends received 32.7 8.9 7.1
Losses/gains from sale of assets and indemnity payments 9.6 (1.8) (1.6)
Government grants (0.9) 41.6 37.9
Economic value distributed 300.8 316.6 335.7
Operating costs 190.5 201.3 215.2
Salaries, allowances and other benefits 74.4 75.9 80.4
Payments to capital providers 10.4 11.9 11.7
Payments to government 23.7 26.1 26.9
Investments in communities 1.8 1.4 1.5
Economic value retained 82.8 85.5 69.9

Assets and liabilities

As at December 31, 2019, RusHydro Group’s assets declined by 0.7% (RUB 6.8 bn) y-o-y to RUB 925.1 bn.

The change in assets is mainly driven by:

  • an increase in the cost of fixed assets due to the implementation of the Group’s investment program (including impairment);
  • an increase in other current assets due to a larger share of funds placed on deposits with maturities of over 90 days (amid a decrease in cash equivalents);
  • a decline in receivables and advances paid as a result of payments under agreements on the sale of Inter RAO shares and the offset of advance payments for the utility connection of FGC UES to DRSK.

As at the end of the reporting period, the Group’s liabilities grew by 2.8% (RUB 9.5 bn) y-o-y to RUB 355.2 bn.

The ratio of own and borrowed funds in 2019 amounted 62.3%.

In November 2019, RusHydro Group placed Eurobonds issued by special purpose entity RusHydro Capital Markets Eurobonds DAC. The issue size totaled RUB 15.0 bn. The Eurobonds have a maturity of five years and a coupon rate of 6.8% per annum.

Assets, RUB bn
Equlity and Liabilities, RUB bn

As at December 31, 2019, the Group recorded a liability of RUB 7.0 bn associated with the issue of additional shares registered by the Bank of Russia on August 27, 2018. In April-May 2019, as part of the preemptive right exercise, RusHydro placed 7,000,092,298 additional shares among its shareholders (49.95% of the additional offering) with a par value of RUB 1,0 per share.

In December 2019, RusHydro Group signed an agreement on the sale of 90% of MEK shares to RazTES for consideration of RUB 173 mn. In accordance with the agreement, the shares were transferred to the buyer in March 2020 after MEK refinanced its obligations to the European Bank for Reconstruction and Development and Asian Development Bank and after RusHydro’s surety contracts with respect to these obligations were terminated in full* . After the closure of the deal, RusHydro Group’s financial debt went down by RUB 4 bn* and the Group’s loan portfolio was no longer exposed to currency risks.

The fair value of the non-deliverable forward transaction for RusHydro’s shares recognized in the Company’s liabilities went down from RUB 31,986 mn (as at December 31, 2018) to RUB 28,510 mn (as at December 31, 2019), which helped to reduce RusHydro’s leverage. The change in fair value of the non-deliverable forward is mainly attributable to improvement in RusHydro’s share price throughout the reporting period. Should the Company’s share price continue on its upward trend, a further reduction in forward transaction liabilities is expected, with gains from the forward contract recognized in RusHydro Group’s financial statements under the IFRS.

Debt portfolio management

Total and net financial debt and leverage, RUB bn

RusHydro Group continues to maintain a balanced debt profile. In 2019, short-term debt remained almost flat y-o-y (an increase of 1.4%), while long-term debt went up by 2.9%. At the end of 2019, RusHydro Group’s total and net financial debt* stood at RUB 232.4 bn and RUB 144.6 bn respectively. The level of leverage confirms RusHydro Group’s strong financial position. At the end of the reporting period, net financial debt / EBITDA stood at 1.48x, which is more than comfortable for RusHydro Group given the internal limit of 2.0x.

2019 saw a y-o-y decrease in long-term borrowings (down by 36%), mainly due to a reduction in the Group’s activities in international capital markets following the peak year of 2018, when RusHydro completed three issues of Eurobonds for RUB 35 bn and 1.5 bn offshore Chinese renminbi, compared to just one issue of Eurobonds for RUB 15 bn in 2019.

Short-term debt demonstrated a slight increase (of 1.4%). In 2019, RusHydro Group honored all its obligations under coupon payments, loan agreements, and debt securities redemption. In April 2019, the Company fully redeemed its series BO-P04 exchange bonds for a total of RUB 15 bn.

During 2019, companies RusHydro Group worked on refinancing more expensive debt. The weighted average rate of ruble-denominated borrowings at the end of the year stood at about 7.6% per annum, compared to 8% per annum at the end of 2018.

In terms of currency and stability of the interest rate, the Group’s financial debt (excluding liabilities on the nondeliverable forward for shares, cross currency swap, and lease obligations) as at December 31, 2019 had the following structure: 98% was represented by ruble-denominated debt* , with 90% comprised by fixed-rate debt, which indicates minimum levels of currency and interest rate risks for RusHydro Group’s financial debt*.

In 2019, the long-term part of the Group’s borrowings increased by RUB 4.6 bn (2.9%) to RUB 162.5 bn, mainly driven by long-term financing raised through a ruble-denominated Eurobond issue in 2019.

Structure of the long-term debt to be redeemed after twelve months from the reporting date, %
Structure of the short-term debt to be redeemed within twelve months from the reporting date, %

At the end of the reporting period, the short-term part of the Group’s borrowings was virtually flat y-o-y and amounted to RUB 39.4 bn (an increase of RUB 536 mn, or less than 1.4%). The Group has a balanced debt repayment schedule, including debt due in 2020. Current short-term liabilities reflect maturing long-term loans and bonds (including local bonds totaling RUB 10 bn). As the remaining drawdown for the Group’s current loan agreements amounted to more than RUB 206 bn at the end of 2019 and substantially exceeds the need for short-term debt refinancing, financial risks are considered insignificant.


Local bonds

As at December 31, 2019, the outstanding bonds of RusHydro include six issues for a total of RUB 55.0 bn (the aggregate value of outstanding bonds is RUB 13.2 bn).


As at December 31, 2019, the outstanding bonds of RusHydro include five issues of Eurobonds for a total of RUB 70 bn and 1.5 bn offshore Chinese renminbi placed by RusHydro Capital Markets Eurobonds DAC company on the Irish Stock Exchange under Reg S. All issues have confirmed long-term ratings from at least two leading international rating agencies and ACRA aligned with RusHydro’s credit rating.

Key parameters of RusHydro’s bond issues

Issue parameters Series 01 and 02 bonds Series 07 and 08 bonds Series 09 bonds Series BO-P05 exchange bonds
Bond type Non-convertible certificated interestbearing bearer bonds with mandatory centralised custody State registration number 4−01−55038-E
4−09−55038-E 4B02−05- 55038-E-001P
Face value RUB 1,000 Registration date 09.23.2010 12.27.2012 12.27.2012 06.09.2017
Nominal amount of each issue Series 01 — RUB 10 bn
Series 02 — RUB 5 bn
Series 07, 08, 09 — RUB 10 bn each
Series BO-P05 — RUB 10 bn
Placement date /

Offer date /

Maturity date






Offering price 100% Coupon rate Coupons 1−10 — 8.0% p.a.
Coupons 11−20 — 9.5% p.a.
Coupons 1−10 — 8.5% p.a.
Coupons 11−20 — 0.1% p.a.
Coupons 1−5 — 12.75% p.a.
Coupons 6−16 — 7.5% p.a.
Coupons 17−20 — coupon rate to be determined by the issuer
Coupons 1−6 — 8.2% p.a.х
Form of offering Open subscription, bookbuilding Yield 8.16% 8.68% 13.16% 8.37%
Coupon payments Semi-annual Last trade yield as at December 31, 2019  Series 01 — 7.85%
Series 02 — 5.12%
Series 07 — 4.12%
Series 08 — 4.45%
Series 09 — 6.47% Series BO-P05 — 5.80%

Key parameters of Eurobond issues

Offering date Maturity date Issue currency Amount, bn Coupon rate, % p. a. Coupon payments ISIN
09.28.2017 09.28.2022 RUB 20.0 8.125 Semi-annua XS1691350455
02.15.2018 02.15.2021 RUB 20.0 7.40 Semi-annual XS1769724755
11.21.2018 11.21.2021 CNH 1.5 6.125 Semi-annual XS1912655054
11.27.2018 11.27.2022 RUB 15.0 8.975 Semi-annual XS1912654677
11.25.2018 11.25.2024 RUB 15.0 6.80 Semi-annual XS2082937967

Cash flows

As at December 31, 2019, RusHydro Group’s cash and cash equivalents amounted to RUB 41.0 bn (compared to 65.4 bn as at December 31, 2018).

In 2019, RusHydro Group’s key sources to finance its investing activities were income, depreciation charges, VAT refunds, other own funds of the Company, borrowings, and the federal budget.

In 2019, cash flow from operating activities decreased by RUB 8.9 bn, or 10.5% y-o-y. The Group’s cash flows from operating activities before changes in working capital declined by RUB 12.2 bn, or 11.1%, as a result of a lower operating income.

In 2018, RusHydro Group sold its 4.9% stake in PJSC Inter RAO to Inter RAO Group for RUB 17.2 bn. RusHydro Group received the cash in several tranches: RUB 2.2 bn in 2018 and RUB 15.0 bn in 2019. The amounts were used to finance the Group’s investing activities. As a result of these proceeds, total cash outflows in investing activities in 2019 decreased by RUB 11.4 bn, or 13.2%, y-o-y.

The ten-fold y-o-y increase in cash used in financing activities in 2019 (by RUB 22.2 bn) was mainly due to a decrease in long-term borrowings and higher dividend payments.

Cash flow from operating, investing and financing activities, RUB bn

Cash flows 2017 2018 2019
Cash flows from operating activities 78.1 84.6 75.7
Cash flows used in investing activities (60.0) (87.0) (75.6)
Cash flows used in financing activities (15.1) (2.3) (24.4)

Tax payments

RusHydro Group is one of the main taxpayers in the regions of its operation. In 2019, tax payments to budgets of all levels totaled RUB 82.1 bn, including RUB 35.1 bn to regional budgets.

In 2019, RusHydro Group paid taxes to regional and local budgets in 43 Russian regions.

Tax payments to budgets of different levels, RUB mn

Level of budget, RUB mn 2017 2018 2019
Federal 42,904 46,168 46,458
   including insurance contributions 15,963 16,864 18,043
Regional 33,653 34,275 35,069
Local 788 733 594
Total 77,345 81,176 82,121
Tax payments by RusHydro Group in 2019, %
*Other taxes include:
  • tax on income received by Russian entities from Russian and foreign agents;
  • mineral extraction tax;
  • water tax;
  • transport tax;
  • land tax;
  • pollution charge;
  • land rent.
Tax payments to regional budgets in 2019, RUB mn

For more information on taxes paid to regional and local budgets with a breakdown by Russian region, see Appendix No. 22.