Enel Russia lowers forecast for EBITDA in 2016 to 10 bln rubles in new plan
MOSCOW. March 16 (Interfax) - PJSC Enel Russia is expecting earnings before interest, taxes, depreciation and amortization (EBITDA) at 10 billion rubles in 2016, the company said in a press release.
Enel Russia has published its strategic plan for 2016-2019 as approved by the company's board of directors.
"The plan is aimed at maintaining business and financial stability despite the current tough regulatory and market landscape. After a challenging 2015, we expect 2016 to be characterised by almost flat power demand, tariff growth containment announced by the government and a significant amount of new capacity coming into operation, keeping market prices close to 2015 levels. From 2017 onwards the company's financial performance is expected to revert to a positive trend, returning to a solid positive income mainly supported by the growth in payments for new capacity (DPM)," the company said
"The Enel Russia 2016-2019 strategy envisages EBITDA targets at 10.0 billion rubles in 2016, 15.9 billion rubles in 2017 and 16.9 billion rubles in 2019. The slight reduction of 2016 EBITDA versus 2015 (10.8 billion rubles) is mainly due to the higher fixed costs stemmed from higher forecasted inflation in 2016," the company said.
In comparison with the business plan for the same period that was presented in 2015, expectations for EBITDA fell from 17.1 billion rubles.
"Under the 2016-2019 strategic plan, Enel Russia is expected to post a net income of 0.5 billion rubles in 2016 and continue growing from 2017 onwards, also supported by declining interest charges due to the restructuring of Enel Russia's debt. As a result, net income in 2017 is expected to reach 6.1 billion rubles in 2017 and 7.6 billion rubles in 2019," Enel Russia said.
"The plan is aimed at maintaining business and financial stability despite the current tough regulatory and market landscape," Enel said.
"From 2017 onwards the company's financial performance is expected to revert to a positive trend, returning to a solid positive income mainly supported by expected growth in capacity payments and forecasted gradual economic recovery," it said.
"Enel Russia's priorities for the plan period are further CAPEX reduction, strong focus on equipment
reliability, continuing cost containment and debt structure optimisation," it said.
Updated business strategy highlights, bln rubles:
| Net profit *2016 | EBITDA 2016 | Net profit 2017 | EBITDA 2017 | Net profit 2019 | EBITDA 2019 | |
| Updated plan | 0,5 | 10,0 | 6,1 | 15,9 | 7,6 | 16,9 |
| Plan unveiled in 2015 | 7 | 17,1 | 10,5 | 20,4 | 15,5 | 25,1 |
| Change | -92.9% | -41,5% | -41,9% | -22% | -51% | -32,66% |
* Net income from core business
Total CAPEX 26.1 billion rubles over 2016-2019.
"In this challenging scenario which is affecting our performance, we will continue to focus on cost efficiency and CAPEX containment over the 2016-2019 period, with the aim of ensuring the financial solidity of our business and returning to a grow from 2017 onwards," said Carlo Palasciano Villamagna, General Director of Enel Russia. "The worsened economic situation and regulatory framework we faced last year had a negative impact on our 2015 financials, which despite positive operating results, higher availability of our generating fleet and a solid cost-containment program, are below the targets set forth in our previous strategic plan."
Enel Russia consists of the Konakovskaya, Nevinnomysskaya, Sredneuralskaya and Reftinskaya state district power plants (GRES). Italy's Enel owns a 56.43% stake, PFR Partners Fund I Limited has 26.4% and Prosperity Capital - around 10%.