Translated by

RusHydro

Company


300px

Assets

Owners

+ RusHydro

The RusHydro open joint stock company is the largest Russian generation company and the second in the world among the hydrogeneration companies on installed capacity. JSC RusHydro — the leader in power generation based on renewable sources developing generation on the basis of energy of water flows, sea inflows, wind and geothermal power.

Taking into account the Sayano-Shushenskaya HPP, largest in Russia, the company integrates 60 power facilities of renewable power, including 9 stations of the Volga and Kama cascade with a total installed capacity more than 10,150 MW, the firstborn of big hydropower in the Far East Zeysky hydroelectric power station (1330 MW), the Bureya hydroelectric power station (2010 MW), the Novosibirsk hydroelectric power station (455 MW) and several tens of hydroelectric stations in the North Caucasus and also geothermal stations on Kamchatka and the high-maneuverable capacities of the Zagorsk pumped storage power plant (pumped storage power plant) in the Moscow region used for alignment of daily irregularity of the diagram of electric load in CUC of the Center. The RusHydro holding also integrates the research, design and survey, engineering organizations and also retail power supply companies. In addition to operation of the operating hydroelectric power stations and objects of RES JSC RusHydro continues implementation of investment projects of construction of the HEPS in different regions of the Russian Federation. The largest of them are Boguchansky hydroelectric power station (3000 MW) which construction JSC RusHydro together with UC RUSAL conducts on the Angara River in Krasnoyarsk Krai, Kashkhatau hydroelectric power station (65 MW) in Kabardino-Balkar Republic, the second queue of a cascade of Zaramagsky HEPS (352 MW) on the Ardon River in the Republic of North Ossetia-Alania, the Zagorsk GAES-2 (840 MW) in the Sergiyevo-Posadsky district of the Moscow region, Ust-Srednekansky hydroelectric power station (570 MW) in the Magadan region and some other projects.

History and performance indicators

2017: Increase in EBITDA by 3.7%

The indicator of the consolidated profit on operating activities without interest payment, taxes and charged depreciation (EBITDA) of Group of RusHydro – for 2017 grew by 3.7% and made 104 billion rubles.

Total sales of Group in 2017 were 380.9 billion rubles, having decreased by 2.7% in connection with sale at the end of 2016 Power Supply Company of Bashkortostan (ESKB LLC) LLC. Without taking note of results of ESKB LLC on revenue of Group of 2016 growth of a comparable indicator year-on-year was 5.4%. The pacing factors which influenced growth of revenue became increase in proceeds from sales of power as a result of commissioning of Zelenchuksky hydroelectric power station-pumped storage power plant, a favorable price environment in wholesale market of the electric power and power, revenue growth from electric power transmission in the Far East.

Operating profit of Group of RusHydro grew by 1.9% from 75.6 billion rubles to 77.1 billion rubles.

The net profit of Group of RusHydro in 2017 was 22.5 billion rubles (-43.5% by 2016). At the same time the net profit corrected on non-cash items [2] Groups for 2017 was 62.7 billion rubles that in general is comparable (without ESKB LLC) to a similar indicator for 2016.

The difference between the reporting and corrected indicators is explained by reflection of the following most essential non-cash transactions: recognition of a loss from economic impairment of fixed assets of Group, mainly concerning objects of the Yakut GRES-2 and PJSC Yakutskenergo in in view of insufficiency of tariff revenue within the made tariff decisions; recognition of a financial expense as a result of change of fair value of the non-deliverable forward on actions [3]; recognition of an impairment loss of receivables in an analysis result of overdue receivables and assessment of probability of its repayment. It is also necessary to note that one-time income from sale of dams of Brotherly, Ust-Ilimsk and Irkutsk hydroelectric power station in the amount of 7.2 billion rubles and also income of 3.1 billion rubles from sale of ESKB LLC had an impact on the value of net profit for 2016.

Assets of Group in 2017 increased by 4.6% to 1,028 billion rubles due to growth of fixed assets, money and their equivalents, receivables and inventory stocks. Obligations of Group did not change and made 332.7 billion rubles. Long-term obligations decreased by 34.4 billion rubles, short-term - grew by 34.6 billion rubles.

Last year the debt load of Group due to debt repayment of the companies of RAO ES of the East for the amount of 55 billion rubles as a result of the transaction with VTB Bank and cancellings of the guarantee of RusHydro before Vnesheconombank on the credit of Boguchansky hydroelectric power station for the amount of 26 billion rubles is significantly optimized. Owing to reduction of a debt load of Group coefficient the net debt / EBITDA which characterizes financial stability of the companies for the end of 2017 was reduced from 1.6 to 1.4.

2016: RusHydro will create the centralized control system of purchases

RusHydro will create the centralized control system of purchasing activity on Group in general (including RAO ES of the East Holding). Within a new system RusHydro is going to increase not less than by 30% in comparison with 2015 a share of purchases electronically, to lower a share of purchases at the only source by 20%, to strengthen control of purchases of branches and all subsidiaries, to gain additional economic effect of consolidation of the same purchases. Actions are directed to increase in transparency of activity of Group and cost reduction, including to the maintenance of an administrative and management personnel.

Within a new system RusHydro is going to reduce a share of the purchases conducted by "daughters" independently. Before the company of the RusHydro Group conducted purchases worth less than 100 million rubles independently. Now this threshold is reduced to 20 million rubles. Integration into a single system of procurement management of the companies of RAO ES of the East Holding will become the important area of work.

Uniform command center purchases, and later – and the specialized subsidiary of RusHydro will become the rule of supply. This approach is successfully used by many infrastructure companies. Creation of "daughter" will allow to optimize document flow and the number of personnel in regions, to increase transparency of purchase management and extent of their centralization, to achieve additional effect of consolidation of the same purchases, to reduce costs for involvement of external agents on carrying out purchases and also to increase efficiency on attraction to purchases of Group of small and medium-sized businesses. In the future the subsidiary company created by RusHydro will be engaged not only in purchases, but also centralized operation in processes of supply of the enterprises of Group in general, including: consolidate the same requirements of the enterprises of Group, manage logistics, stocks, to implement category management.

RusHydro began optimization on the main activities in 2015. The main objective which the Government of the Russian Federation set in September, 2015 for the new company executive, - end-to-end increase in efficiency. On all vertical – from executive office to branches, subsidiary companies, separate divisions and employees. Optimization affects hundreds of workflows. In particular, RusHydro works on significant increase in efficiency of purchasing activity on all Group, decrease in operating costs, improvement of management.

2013: RusHydro creates the insourcing IT company

RusHydro creates the affiliated IT service service enterprise RusHydro which will perform internal IT services and insourcing by analogy with Greenatom in Rosatom, the Chief information officer of holding Garald Bandurin in October, 2013 [[Bandurin Garald Ivanovich|]] told TAdviser.

According to him, it will be vocational education which will be engaged in providing holding with IT services "in sufficient volume, with the necessary quality and at the best price".

"We are subsector of power, and subsectors have always a certain problem — some types of specialists cannot be found in the market, they can only be reproduced in the own environment, - explains need of creation of such Chief Information Officer of RusHydro company. - Hydropower engineer you will not find anywhere, too will not find the hydropower IT equipment technologist anywhere, they should be reproduced at themselves therefore also the structure will be such which is able to reproduce them that it was possible to move further".

Part of specialists who already in staff of the company, and partially its state is going to be understaffed will be transferred to the new project, having finished learning people, he adds.

Garald Bandurin also told that in addition to service company there is one more structure which is displaid by RusHydro - it is structure of general designer of management systems.

"It is necessary in order that all management systems were projected in one logic that all solutions and that it was possible to perform really integration of these solutions both at the level of infrastructure, and at the level of a data model, and at the level of separate applications, the systems of data exchange in conformity worked", - the Chief information officer of holding explains.

According to him, as of fall of 2013 discussion where this structure will be and as it will be organized – as the separate legal entity or as a part of holding, some of institutes, is conducted. Approximately from the first quarter 2014 it is going to start process of its creation.

2010: Purchase of 25% of the Krasnoyarsk hydroelectric power station

In December, 2010 "RusHydro" within the program of consolidation of the hydrogenerating assets for the first time purchased the generating asset at the private investor. The company exchanged 4.5% of the shares for 25% of the stocks of the second (after Sayano-Shushenskaya HPP) the largest hydroelectric power station in the Russian Federation JSC Krasnoyarsk Hydroelectric Power Station which were earlier belonging to structures of shareholders of "Siberian Coal Energy Company" (SCEC). Let's note that 68.29% of KRASGES are controlled by Oleg Deripaska's EuroSibEnergo. RusHydro characterized this transaction as the first stage on the way of further consolidation of hydropower assets in Siberia and in the Far East. Besides, in the closest plans of the company - involvement of strategic investors, and among the main partners the Chinese companies are considered.

Also at the end of 2010 it became known of plans of the Government of the Russian Federation to privatize 7.97% in 2011-2013 minus one stock of RusHydro then the state share in the company should will be reduced from 57.97% of authorized capital to 50% plus one action.

2009: Accident on Sayano-Shushenskaya HPP

In May, 2009 the existing investment program of RusHydro was corrected in connection with a world financial crisis.

Serious accident on belonging RusHydro of Sayano-Shushenskaya HPP in August, 2009 set company management thinking over its review already again taking into account recovery of the destroyed hydroelectric power station and the accelerated start-up of the Boguchansky hydroelectric power station capable to partially substitute temporarily lost capacities. On preliminary to calculations, damage caused to RusHydro by accident is estimated at 1.5 billion rubles monthly. On recovery of the station more than 40 billion rubles and about 4 years will be required.

The accident on Sayano-Shushenskaya HPP which became one of the largest technogenic catastrophes of the last 25 years cost positions to the acting as the chairman of the board of RusHydro with July, 2008 Vasily Zubakin who was recognized by one of responsible for the tragedy along with the former head of RAO UES of Russia A. Chubais who was the chairman of the board of the company V. Sinyugin and others. In November, 2009 the board of the company was headed by the chairman of the board of Inter RAO Evgeny Dod.

2008

Joining of 20 "daughters" and renaming into RusHydro

On January 9, 2008 RusHydro completed the first stage of reforming by joining of 20 "daughters":

  • JSC Sayano-Shushenskaya HPP of P.S. Neporozhnego,
  • JSC Dagestan Regional Generation Company,
  • JSC Votkinsk Hydroelectric Power Station,
  • JSC Stavropol Electric Generation Company,
  • JSC Zeysky Hydroelectric Power Station,
  • JSC Kama Hydroelectric Power Station,
  • JSC Nizhny Novgorod Hydroelectric Power Station,
  • JSC Cheboksary Hydroelectric Power Station,
  • JSC Saratov Hydroelectric Power Station,
  • JSC Bureya Hydroelectric Power Station,
  • JSC Kabardino-Balkarian Hydrogeneration Company,
  • JSC Kabbalkges,
  • JSC Sulakenergo,
  • JSC Zelenchuksky Hydroelectric Power Stations,
  • JSC Volga Hydroelectric Power Station,
  • JSC Zhigulyovsk Hydroelectric Power Station,
  • JSC Kaskad Verkhnevolzhskikh hydroelectric power Station,
  • JSC North Ossetian Hydrogeneration Company,
  • JSC Zagorsk Pumped Storage Power Plant,
  • EOZ LTD.

Since February 11, 2008 biddings of the joint RusHydro on the Russian marketplaces in list "B" begin. In May, 2008 the company passes into list "B" in RTS, in June - to MICEX. After the stock of RusHydro begin to bargain on the Russian stock exchanges in list "A".

The second stage of reorganization of HydroOGK (at that moment already of RusHydro) was completed along with liquidation of RAO UES. On July 1, 2008 JSC Irganaysky Hydroelectric Power Station and JSC Kaskad Nizhne-Cherekskikh hydroelectric power Station joined RusHydro. Besides, JSC State Holding HydroOGK and JSC Minority Holding HydroOGK on which balance there were stocks of the company which within separation of RAO UES got to the state and minority shareholders of RAO UES joined RusHydro. As well as it was supposed, the share of the state in RusHydro according to the results of all conversions exceeded 51% and made 60.37%.

Along with shareholders of RusHydro in inheritance from RAO UES money from the assets sold by holding in the amount of about 30 million rubles and a share in even unsold "subsidiaries" of RAO UES got. The largest packet which passed to balance to RusHydro are 22% of stocks OGK-1.

The development strategy till 2020

In RusHydro it is developed and began to implement the long-term development strategy till 2020 which main objective is value addition of the company. Including, EBITDA "RusHydro" by 2020 should increase from 17 billion rubles (in 2007) to 80 billion rubles. Cumulative installed capacity of the hydroelectric power station and also the stations working at other renewable sources, as expected, will grow from 25 GW to 46 GW, and electricity production - from 78 billion kWh to 130-140 billion kWh. The development strategy assumes updating of fixed assets and decrease in level of wear of the equipment from present 35% to 19%. Program implementation on power generation based on renewable sources (in addition to water - on the basis of energy of sea inflows, wind and geothermal power) should become an important component of development of RusHydro. Among the main current projects of the company there is a construction of the Bureya and Boguchansky hydroelectric power station, design of the Southern Yakut hydrocomplex and the Evenki hydroelectric power station.

2007: The scheme of the accelerated reorganization of HydroOGK

The formation of uniform RusHydro was going to be completed along with reorganization of RAO UES, i.e. by July 1, 2008. The hydrogeneration company within reform of power industry had to be selected from RAO UES along with other power companies.

In the spring of 2007 the Board of Directors of RAO UES approves the scheme of the accelerated reorganization of HydroOGK assuming joining of child HEPS in two stages. During 2007 RusHydro conducted preparation, including issues of additional stocks of the company were registered, coefficients of conversion of stocks of the HEPS into stocks of the uniform company are approved.

2006: Agreement with Rusal on creation of BEMO

In the spring of 2006 based on the project of construction of Boguchansky hydroelectric power station other, larger project is formed - HydroOGK and aluminum giant "Rusal" signed the agreement on project implementation on creation of the Boguchansky power metallurgical consolidation (BEMO) assuming construction of also aluminum plant.

Since May 1, 2006 HydroOGK became the participant of wholesale market of the electric power and power (OREM). RusHydro becomes one of the largest players on the new OREM started since September 1, 2006.

In 2006 HydroOGK continues to augment the authorized capital by placement of additional stocks to which payment packets in the hydrogenerating assets are entered. By this moment RAO UES made the decision on formation based on holding structure of HydroOGK of uniform operating company. The target model of HydroOGK assuming joining of 22 child HEPS to parent company and transition to the single share was approved, at the same time the share of the state in HydroOGK (present RusHydro) should not have fallen lower than 51%.

2005: Creation of HydroOGK management company

In the course of formation of HydroOGK the stocks of the joint-stock company-hydroelectric power station belonging to RAO UES were transferred. After completion of transfer of shares in 2005 by HydroOGK created the HydroOGK managing company (MC) based on JSC UK Volga gidroenergetichesky kaskad (VOGEK) for management of stations. Same year the decision on the beginning of implementation of one of the largest projects of the company - a construction of Boguchansky hydroelectric power station was made.

2004: Creation of HydroOGK as subsidiaries of RAO UES of Russia

JSC RusHydro was created as 100 percent subsidiary company RAO UES of Russia in December, 2004 under the name of JSC Federal Hydrogeneration Company (HydroOGK). The order about its organization was signed by Anatoly Chubais, then the chairman of the board of RAO UES. The company passed state registration on December 26, 2004 the Chairman of the board of HydroOGK the managing director of a business unit of Gidrogeneration of RAO UES Vyacheslav Sinyugin who later held a post of the Deputy Minister of Energy of the Russian Federation was appointed. He directed the company till May, 2008 and till December, 2008 headed its Board of Directors.