generating records annual report 2014

Financial Capital. Performance Results

The main factor in growth of net profit by 7,027 mln rubles is achievement of the record power generation for the entire history of the Russian nuclear industry.

THE GROWTH OF REVENUE FROM SALES IS CAUSED BY THE FOLLOWING:

  • PRICING FACTORS
  • by 34,86 rubles/MWh –
    actual prices in the free market of
    electric power
  • by 22 193,70 rubles/MWh –
    actual price of capacity according to RD
  • by 81 002,80 rubles/MWh –
    actual price of capacity under power
    supply agreements of power unit No. 2
    of Rostov NPP
  • VOLUME FACTORS
  • на 7 505,83 mln KWh –
    actual volumes of power supply
    in the free market
  • на 556 MW –
    actual volume of capacity supply
    under competitive capacity auction
  • на 96 MW –
    actual volume of capacity supply
    under power supply agreements
Main Financial and Economic Indicators (Mln Rubles)
Indicator 2012 2013 2014 Δ2014/2013
Revenue 200 527 232 857 253 215 9%
Gross profit 76 116 96 309 105 607 10%
Percent of gross profit to revenue 38% 41% 42%
Business expenses 20 16 15 –7%
Management expenses* 10 157 10 637 11 325 7%
Net profit –1 849 2 211 9 238 318%
Net cash flow –3 661 8 802 –4 605 –152%
Net assets 936 154 1 059 013 1 181 245 12%
Return on sales (by net profit) –0,92% 0,95% 3,65%
Return on assets 19,5% 20,0% 19,5%
Return on equity –0,21% 0,22% 0,83%
Debt/equity ratio 0,09 0,10 0,08
Current liquidity ratio 1,30 1,19 1,31
Equity 943 788 1 057 723 1 180 017 12%
Borrowed funds 82 317 104 326 94 450 –9%

* Management expenses are shown excl. accrued industry-specific reserves (allocated to prime cost).

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Value Created and Distributed by Rosenergoatom Concern OJSC according to Russian Accounting Standards, Bln Rubles
Indicator 2012 2013 2014
Created economic value 208,4 239,0 266,5
Incomes (sales revenue, gains from financial investments, and sold assets) 208,4 239,0 266,5
Distributed economic value 136,4 143,4 160,0
Operating costs (payments to suppliers and contractors, cost of purchased materials) 92,6 95,6 108,8
Salaries and other payments and benefits for employees 26,2 27,2 27,6
Payments to capital providers 0,7 1,1 1,4
Gross tax payment (before individual profit tax and VAT) 16,2 19,0 21,8
Investments in communities, including donations 0,6 0,5 0,4
Retained economic value 72,0 95,6 106,5
Contribution to GDP 115,8 143,4 157,7

NET ASSETS

THE GROWTH IN NET ASSETS VALUE IN 2014 WAS DUE TO THE GROWTH IN THE ASSETS CONSIDERED BY 114,865 MLN RUBLES WITH SIMULTANEOUS REDUCTION OF LIABILITIES CONSIDERED BY 7,367 MLN RUBLES

As of December 31, 2014, net assets of Rosenergoatom Concern OJSC exceed registered capital by 43%. Taking into account that net assets both exceeded registered capital and increased during the reporting period, we may say that, based on this indicator, financial state of Rosenergoatom Concern OJSC is quite healthy.

BALANCE SHEET STRUCTURE

The amount of assets of Rosenergoatom Concern OJSC increased by 9% (114,865 mln rubles). The increase in the amount of assets is due to increase in value of both non-current assets by 9% (106,946 mln rubles) and current assets by 9% (7,920 mln rubles). Increase in value of non-current assets is caused by growth in capital investments in-progress in fi xed assets by 26% (141,544 mln rubles) which shows significant amount of investments in fi xed assets made by the Concern.

  • by 122 232 mln rubles
  • 1 181 245
    mln rubles – the Concern’s net asset value as of December 31, 2014 (as per balance sheet)
  • by 114 865 mln rubles
  • 1 355 827
    mln rubles – the Concern’s asset value as of December 31, 2014 (as per balance sheet)
Evaluation of Net Assets of Rosenergoatom Concern OJSC
Indicator Actual value of the indicator Changes over the time period
As of December 31, 2013 As of December 31, 2014
mln rubles % to balance
sheet total
mln rubles % to balance
sheet total
thousand rubles
1 2 3 4 5 6 = (col - col 2)
Net assets 1 059 013 85% 1 181 245 87% 122 232
Registered capital 671 516 54% 671 516 50% 0
Net assets over registered capital 387 496 31% 509 728 37% 122 232

As of December 31, 2014, non-current assets total 1,259,284 mln rubles, which is 93% of the total asset value.

The cost of property of Rosenergoatom Concern OJSC as of the end of the reporting period totaled 1,355,827 mln rubles.

The Concern’s structure of sources of funds is dominated by equity ratio 87%.

The Concern approved regulatory documents and guidelines on financial statements internal control system (FS ICS). The main purpose of FS ICS is to provide reasonable assurance of the reliability of financial statements for external and internal users. The Plan on improvement the FS ICS in Rosenergoatom Concern OJSC, comprising measures aimed at enhancing the quality of accounting and ensuring the reliability of financial statements, is prepared each year.

BUDGETING

In order to achieve key performance indicators, the Concern applies a systematic approach to planning and accounting of incomes, costs, and cash flows. On an annual basis, to ensure the Concern’s production program fulfillment and guaranteed funding for priority areas of industrial and economic activities and development, budgets (including the cash flow budget) and income and expense estimates by activity are prepared in the context of structural units of the Concern and the Concern as a whole; these are the basic documents for expenditures of the Concern and its branches for the planning period.

The budgeting process is implemented within the approved standards of Rosatom State Corporation put into effect by orders of the Concern and represents a short term planning process (planning horizon of 1 year with a breakdown by quarters). The Company is also engaged in operational financial planning (planning horizon of 1 month).

Funds are spent strictly within the limits communicated to structural subdivisions in accordance with the approved consolidated income and expense estimates for the production and sale of products subject to adjustments made pursuant to the approved procedure. Spending is funded according to the cash flow budget.

Expenses of structural subdivisions of the headquarters and branches of the Concern are monitored on a monthly basis; the fulfillment of consolidated estimate is analyzed quarterly, while identifying reasons for variations of actual costs from target costs in order to optimize costs and to achieve the established target parameters for the Concern in general.

Budgeting process products are approved key performance indicators which are decomposed down to the level of NPPs and the Concern’s headquarters.

COST MANAGEMENT

Pursuant to the action plan aimed at limitation of the final cost of goods and services provided by infrastructure companies while maintaining their financial stability and investment appeal which was approved by Chairman of the Government of the Russian Federation D.A. Medvedev in Resolution No. 6732p-P9 dated November 11, 2013, operating expenses in 2014 were agreed at the same level as the budget of 2013, without indexation. Also, when preparing the Concern’s budget for 2014, we took into account the task of reducing the costs associated with administration and maintenance activity by 10% (in comparable prices of 2013).

Thus, strict control over compliance by the Concern’s branches and structural subdivisions with assigned limits formed with due regard to the task of reducing the costs contributed to EBITDA increase comparing with the indicator in 2013.

Dynamic Changes in EBITDA and EBITDA Margin
Indicator 2012 2013 2014 2014/2013, %
EBITDA, mln rubles 81 536 104 664 112 079 107,08%
EBITDA margin, % 40,66 44,95 44,26 98,46%
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