Results of Financial and Economic Activities

Kirill Iordanidi
According to the year‑end results, the Company managed to maintain an upward trend in net profit growth. The financial result for 2023 totalled RUB 6,166.5 million, which is RUB 922 million more than in 2022 thanks to the growth in the volume of services provided and an increase in revenue from grid connections.The Company’s management took exhaustive measures to contain cost and debt portfolio growth, optimise interest expenses, improve the efficiency of the procurement management system, reduce the unit cost of energy equipment operation, reduce grid losses and improve energy efficiency.In 2023, the Company did not receive any state support funds (subsidies).
KIRILL IORDANIDI Deputy General Director for Economics and Finance

Revenue from sales of services
for the reporting period totalled RUB 74,557.5 million, which is RUB 10,818.6 million more than the same indicator in 2022 (RUB 63,738.9 million), including:

  • Revenue for electricity transmission services totalled RUB 71,207.1 million, which is RUB 9,754.2 million more than the 2022 result (RUB 61,452.9 million). This is attributed to an 3% increase (by 677 million kWh) in the volume of electricity transmission services provided, as well as the impact of the tariffs for electricity transmission services approved for 2023
  • Revenue from grid connections totalled RUB 2,437.9 million, which is RUB 1,155.9 million more than in 2022 (RUB 1,282 million). This is attributable to GC contracts with major applicants fulfilled in 2023, including: RES, LLC (revenue of RUB 315 million), Zolotoy Kolos Sanatorium, JSC (RUB 108 million), Taman Federal Highway Administration (RUB 73 million), VB KUBAN, LLC (RUB 54 million) and NUTEP Container Terminal, LLC (RUB 53 million)
  • Revenue from other activities totalled RUB 912.4 million, which is RUB 91.5 million less than in 2022 (RUB 1,003.9 million)

Cost of sales (including administrative expenses) for 2023 totalled RUB 62,117.5 million, which is RUB 8,963.8 million higher than the actual figures for 2022 (RUB 53,153.7 million). The growth was driven by an increased cost of purchased electricity to compensate for losses, transmission services provided by FGC — Rosseti (as a UNEG management organisation), services provided by distribution grid companies, maintenance and repair services, as well as an increase in depreciation and amortisation, other material expenses and personnel expenses.

Pre‑tax profit totalled RUB 8,547.4 million, up RUB 1,367.0 million year‑on‑year.

The Company’s financial result (profit) for 2023 totalled RUB 6,166.5 million, which is higher than the level of 2022.

The main factors that influenced the financial result:

Increase in revenue by RUB 10,818.6 million

Increase in the self‑cost including administrative expenses by RUB 8,963.8 million compared to 2022 parameters

Deterioration in the balance of other income and expenses from profit by RUB 487.9 million compared to the 2022 parameters

Increase in income tax by RUB 444.9 million compared to the 2022 parameters

Key financial and economic indicators of the Company for 2021–2023, RUB mln
Sr. No. Indicator 2021 2022 2023 Change 2023/2022 (%)
Indicators from the Company’s RAS accounting (financial) statementsThe following data were used to calculate the indicators:
for 2021 — Profit and Loss Statement for January — December 2022 («in 2021» column);
for 2022 — Profit and Loss Statement for January — December 2022 («in 2022» column);
for 2023 — Profit and Loss Statement for January — December 2023 («in 2023» column)
1 Revenue from sales of products (services), including: 57,670 63,739 74,557 +17.0
1.1 from electricity transmission 54,526 61,453 71,207 +15.9
1.2 from grid connection 2,348 1,282 2,438 +90.1
1.3 from electricity sales 0 0 0 –
1.4 from other activities 796 1,004 912 –9.2
2 Cost of products (services) –49,903 –52,991 –62,057 +17.1
3 Gross profit 7,767 10,748 12,501 +16.3
4 Administrative expenses –152 –163 –61 –62.6
5 Selling and marketing expenses 0 0 0 –
6 Profit (loss) from sales 7,615 10,585 12,440 +17.5
7 Interest receivable 28 109 439 +4x
8 Interest payable –1,553 –2,663 –2,346 –11.9
9 Income from shareholdings 20 0 4 + RUB 4 mln
10 Other revenues, total 1,414 3,558 2,960 –16.8
11 Other expenses, total –4,826 –4,409 –4,950 +12.3
12 Profit (loss) before tax 2,699 7,180 8,547 +19.0
13 Income tax and other charges –987 –1,936 –2,381 +23.0
14 Financial result 1,712 5,244 6,167 +17.6
15 EBITDAEBITDA was 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. 8,879 16,141 17,574 +8.9
Indicators calculated on the basis of the Company’s IFRS consolidated financial statements
16 Net debt/EBITDA (units) 2.25 1.28 0.54 –57.8
17 Current liquidity ratio (units) 0.55 0.57 0.88 +54.4
18 Financial leverage (units) 1.17 1.16 1.14 –7
19 Share of non‑current borrowings (%) 76.19 77.57 73.51 –4.06 p.p.
20 Net cash flow (RUB mln)The following data were used to calculate the indicator:
For 2021 — Consolidated Statement of Cash Flows for 2022 («For the year ended 31 December 2021» column);
For 2022 — Consolidated Statement of Cash Flows for 2023 («For the year ended 31 December 2022» column);
For 2023 — Consolidated Statement of Cash Flows for 2023 («For the year ended 31 December 2023» column). 		4,131 4,109 8,544 +2.1x
Changes in the Company’s financial results (RUB mln)

The year‑on‑year decrease in Net Debt/EBITDA for 2023 is due to lower debt levels, higher cash and cash equivalents, and increased EBITDA.

Because current assets are growing at a faster rate than short‑term liabilities, the current liquidity ratio was better in 2023 than it was in 2022.

The year‑on‑year decrease in financial leverage is spurred by the outstripping growth rate of long‑term liabilities over the growth rate of equity. The long‑term liabilities rose as a result of a significant increase in advances received under grid connection contracts.

The drop in the share of long‑term borrowings in 2023 compared to 2022 is caused by the transfer of some long‑term debt to short‑term debt with a maturity of less than 12 months as of 31 December 2023, as well as the repayment of some long‑term debt during 2023 using own cash.

The year‑on‑year increase in net cash flow in 2023 is attributable to higher cash generated from operating activities compared to 2022.