Unipro (MOEX: UPRO) is a Russian energy generating company, the main activity of which is the production and sale of electrical energy and power. The company owns five stations: Surgutskaya GRES-2, Berezovskaya GRES, Shaturskaya GRES, Yaivinskaya GRES and Smolenskaya GRES.
Financial results
In early November, Unipro presented financial results for the third quarter of 2021, which on average grew by 25%, compared to the same period last year.
Power generation. The growth of electricity consumption in Russia led to an increase in the production of Unipro. In the nine months of 2021, the company produced 6,2% more electricity, than last year, — up to 32.6 TWh, or 32.6 billion kWh.
For comparison: in total, 821.8 billion kWh were produced in Russia from January to September 2021, which means, that Unipro has developed 4% from the all-Russian result.
At the same time, a higher load on the steam power units of Shaturskaya and Smolenskaya GRES led to an increase in the share of fuel costs in the cost compared to the same period last year.
Power generation "Unipro", bln kWh
| 2017 | 48,2 |
| 2018 | 46,6 |
| 2019 | 46,4 |
| 2020 | 41,7 |
| 9м2021 | 32,6 |
48,2
Growth factors. In addition to increasing electricity production, Unipro identifies five more factors, which helped the company show good results:
- Completion of repair work at power unit No. 3 of Berezovskaya GRES and resumption of payments under CSA from May 2021. This fully compensated for the financial losses from the transition of four combined cycle power units of the Shaturskaya, Yaivinskaya GRES and Surgutskaya GRES-2 from CSA in payment for capacity at KOM and RD tariffs.
- Growth of the RSV price in the first price zone. The company attributes this to an increase in electricity consumption in Russia against the backdrop of a gradual recovery of the country's economy from the crisis..
- Easing restrictions under the OPEC+ agreement.
- Record high temperature, which was observed in the summer of 2021.
- Increasing electricity exports to Finland and the Baltic States.
Revenue and net profit. Thanks to positive market factors in the first price zone, Unipro managed to demonstrate good financial results.
Revenue in the third quarter of 2021 increased by 25%, from 17.242 billion to 21.623 billion rubles, compared to the same period last year. Net income increased year-on-year by 26% - from 3.244 billion to 4.081 billion rubles.
Revenue from contracts with customers, billion rubles
| Revenue | Share in overall results | |
|---|---|---|
| Electricity and power | 21,445 | 99,2% |
| Thermal energy | 0,067 | 0,3% |
| Other revenue | 0,111 | 0,5% |
EBITDA and net debt. The increase in electricity production and prices in the first price zone led in the third quarter of 2021 to an increase in EBITDA by 23% - from 6.134 billion to 7.57 billion rubles. At the same time, the main negative point was the increase in costs: one-time, attributable to power unit No. 3 of Berezovskaya GRES, and operating, which still remain stable.. The company's debt load is not a concern: Unipro's net debt is negative.
Together with good financial results, the management increased its forecast for annual EBITDA growth to 27-29 billion rubles from 26-28 billion rubles according to the previous plan.
The main reasons for raising the forecast: unrealized risks, associated with power unit No. 3 of Berezovskaya GRES, the positive effect of the recovery of the Russian economy and the easing of OPEC + restrictions.
EBITDA dynamics, billion rubles
| 2018 | 27,9 |
| 2019 | 29,6 |
| 2020 | 26,4 |
| Forecast 2021 | 27—29 |
| Forecast 2022 | 33—37 |
27,9
Dividends
Many private investors like Russian energy companies, that they have consistently high dividend payouts. And Unipro is the leader in this regard. The company until 2024 fixed its dividend distribution at the level of 20 billion rubles a year, which corresponds to the annual payment 0,317 P per share. Annual dividend yield until 2024 — 11%.
Unipro distributes twice a year: equal payments, behind 9 And 12 Months. Historically, the first payment takes place in late autumn - early winter, and the final dividend in the summer. The nearest distribution is the payment for 9 months of 2021, which has already been officially announced.
For 9 months of 2021, "Unipro" will pay its shareholders 12 billion rubles, of which 10 billion rubles - standard distribution, 2 billion rubles — additional payment for 2020, as the company withheld this money due to weak results in the first quarter of 2021. Dividends for 9 months of 2021 will be 0,1903 R. Current dividend yield - 6,7%. Register Closing Date - 17 December.
Comparison with competitors
Unipro has the highest multipliers in the Russian energy sector. This is due to generous dividend payments: the company distributes practically 100% net profit against 65% at Enel Russia, 50% at RusHydro, TGK-1, OGK-2 and Mosenergo and 25% in "Inter RAO".
Comparison with competitors
| EV / EBITDA | P / E | Dividend yield | net debt / EBITDA | |
|---|---|---|---|---|
| Unipro | 5,91 | 10,86 | 11% | −0,1 |
| Enel Russia | 7,81 | 10,7 | 9,5% | 3,54 |
| OGK-2 | 3,27 | 4,89 | 8% | 1,09 |
| TGK-1 | 2,14 | 4,57 | 8% | 0,29 |
| Mosenergo | 2,62 | 8,73 | 8% | 0,12 |
| RusHydro | 4,14 | 8,63 | 6,5% | 1,24 |
| Inter RAO | 2,24 | 5,69 | 4% | −1,25 |
What's the bottom line?
Unipro keeps the same growth drivers in 2021, as before: the company demonstrates strong financial results, annual dividend yield 11%, low leverage and moderate capital expenditures against the backdrop of no victories in the competitive selection of new CSA projects. For example, in a recent competitive selection won a competitor - "Fortum".
All this points to investors, that Unipro will continue to distribute profits according to its plan until 2024 and shareholders will receive a double-digit dividend yield for the next three years.
The company has two negative drivers. The first is a high score, That, probably, the next three years will be higher than the values of competitors due to large dividend payments. The second is the possibility of selling some Unipro assets as part of the transition to renewable energy. SUEK is called the main contender for the purchase of these assets, which has been buying up coal plants on the Russian market for the past few years.
