JSC “MOESK” Has Held Conference Devoted to Company’s 2012 Operating Results

JSC “MOESK” has held a conference call, the main theme of which has been the extensive coverage of the annual financial statements for 2012, prepared in accordance with Russian Accounting Standards (RAS). The event was attended by Alexander Inozemtsev, First Deputy General Director of JSC “MOESK”; Roman Ponkrashchenkov, Director of the Corporate Finance Department; Evgeniy Tikhovodov, Director of the Economic Department; Elena Ivanova, Director of the Tariff Formation Department, and Dmitry Kolesnikov, Deputy Director of the Investments Department.

During the conference, the Company’s top managers commented on the financial results of the last year and answered analysts and journalists’ questions.

JSC “MOESK” has published financial statements under RAS for 2012

Joint Stock Company “Moscow United Electric Grid Company” (ticker on MICEX-RTS: MSRS, Bloomberg code: MSRS RX Equity), one of the largest interregional distribution companies of the Russian Federation, has published the performance results for 12 months of 2012, in accordance with Russian Accounting Standards .

For the reporting year, the balance sheet total increased by 8% and reached the value of RUR 286,747 mn. The noncurrent assets, the share of which in the total assets is 78.4%, grew by 10.4%. The growth was mainly due to an increase in the most significant item of the section – fixed assets – by 9.8%. As to the current assets, the share of which in the total assets is 21.6%, accounts receivable decreased by 9.4% (including, short-term accounts payable decreased by 7.9%, the long term - 10.2%), reserves increased by 15.8% and cash and cash equivalents grew by 142.6%. Reduction in accounts receivable is due to formation by the Company of the provision for doubtful debts. Buildup of cash and cash equivalents is due to placement of exchange bonds by the Company.

As to the liability side, it is important to note an increase in retained earnings by 26.5% and gradual decline in the share of short-term debt as a result of accretion of long-term liabilities with the advancing growth rate. In order to reduce risks, in the event of a significant increase in interest rates in the debt capital markets, and subject to the unstable situation in the financial market, the Company performs smooth transition from bank lending to public borrowing.

In such a way, last year the change in the long-term liabilities of the Company amounted to 7%; that of short-term ones was 2.7%. The Company’s long-term liabilities increased due to growth of debt on long-term credits, including through the successful placement of commercial papers of series BO-01 and BO-02 of the total of RUR 10 bn and circulation period of 3 years. The increase in short-term liabilities is mainly influenced by the increase debts on in short-term credits, due to the partial transition of debt from long-term debt to short-term one, as well as due to increase in estimated liabilities.

According to the annual report for the year 2012, total revenues decreased by 6.8% compared with the results of 2011 and amounted to RUR 118 bn. At the same time, the revenue from core activities, electricity transmission and grid connection decreased by 6.3 and 7.8%, respectively. In its turn, the cost changed more significantly downward - by 8.7% and amounted to RUR 92 bn. This resulted in 1% increase in the gross profit.

A certain decrease in revenues and cost against the last year is due to transfer of functions of the operator of “uniform tariff” settlement of accounts since 01.01.2012 in Moscow from JSC “MOESK” to JSC “OEK”.

The total on the net profit is RUR 17,184 mn, which is 0.8% higher than that based on the results of 2011. Net profit growth was achieved mainly through an increase in the Company’s gross profit.

Key efficiency indicators have changed slightly against the results of the same period of the last year. Return on sales amounted to 21.78%, which exceeds the value at 31.12.2011 by 1.67 percentage points The outpacing growth in the net profit against the revenues allowed to increase the net profit margin to the level of 14.56%; it increased by 1.08 percentage points for the year. Return on equity was 10.04% compared to 10.99% a year earlier.

Besides, a significant increase in absolute liquidity ratio from 0.06 to 0.14 should be noted. It was due to an increase in the most liquid part of the current assets against current liabilities decrease through accounts receivable reduction.

In its turn, there is a growth of quick ratio and current liquidity ratio compared to the previous year, which is a positive feature of the Company’s activities.

Dynamics of main figures of the annual accounting reports of JSC “MOESK” under RAS