Substation “Khovanskaya” will provide a powerful impetus for the development of the attached territories of Moscow

PJSC MOESK (part of the Rosseti group of companies) is building the Khovanskaya 220/110/20/10 kV substation, which will become the largest power supply center in the Troitsky and Novomoskovsky administrative districts.

The capacity of the new substation will be 700 MVA, for comparison - today the total transformer capacity of all operating high-voltage substations in the territory of Prefecture of Troitsky and Novomoskovsky Administrative Districts is 1,431 MVA. Thus, the increase in power will be almost 50%, which will provide a powerful impetus for the development of the attached territories.

The project implementation is aimed at the integrated provision of electric energy to an actively developing infrastructure and high-quality, at a completely new level, electricity supply to consumers.

The commissioning of the feeding center will ensure the utility connection of a number of socially significant and residential facilities: a medical complex with a maternity hospital in Kommunarka, the metro station Stolbovo, integrated residential development in the settlements of Sosenskoye and Filimonkovskoye. The total capacity of these facilities will be 103.4 MW.

The new power facility will use digital technologies, taking into account modern requirements for ensuring the reliability of power supply to consumers, manageability and observability of the technological process of power transmission. At the moment, the installation of the main power equipment at the substation has been completed: four autotransformers have been installed, two with a power of 250 MVA each and two with 100 MVA. 220 kV and 110 kV open switchgears were built. Thanks to the use of advanced technologies, including systems for the automatic diagnosis of equipment, operation of the facility will be approximately 15% cheaper than less modern similar substations.

In parallel with the construction of the substation, a 220 kV Lesnaya - Khovanskaya 1.2 cable line is being built, through which the power supply center will be connected to the grid. The length of the line will be 14.5 km. Power engineers use an eco-friendly type of cable with insulation made of cross-linked polyethylene. The trenchless method of horizontal directional drilling will be applied to the intersection of roads and other areas saturated with communications, allowing preserving the natural landscape.

- The Khovanskaya substation will provide a powerful impetus for the development of the attached territories of Moscow. It will provide high-quality and reliable power supply to the Novomoskovsky district, create favorable conditions for the active development of the energy infrastructure in Prefecture of Troitsky and Novomoskovsky Administrative Districts, and give a reserve of capacity for new consumers for the next 15-20 years, - said Pyotr Sinyutin, General Director of PJSC MOESK.

Completion of construction and commissioning of the power facility is scheduled for 2019.

For reference:

Now 234 thousand people live in Prefecture of Troitsky and Novomoskovsky Administrative Districts. By 2035, the population of the PTNAD will increase to 1.5 million. Here is the largest logistics hub in Europe, two international airports - Vnukovo and Ostafyevo. By 2035, 125 public health facilities, 110 schools, 300 kindergartens, 700 sports facilities, 86 parks will be built, 72 km of metro lines and more than 20 stations will be built in the PTNAD.

PJSC MOESK announces financial results under IFRS for 2018

21.03.2019

Moscow United Electric Grid Company (hereinafter - PJSC MOESK or Company, MSRS ticker on the Moscow Stock Exchange), a member of the PJSC ROSSETI Group of Companies that provides services for the transmission of electrical energy in the city of Moscow and the Moscow Region, publishes audited consolidated financial results under International Financial Reporting Standards (IFRS) for the year ended December 31, 2018.

The main outcome:

Financial indicators	Measurement unit	2018	2017	Change (%)
Revenue1	million rubles	159 485	150 494	6,0
Adjusted EBITDA	million rubles	43 485	38 357	13,4
Profit for the year	million rubles	6 586	1 957	over 100
Change in free cash flow 2	million rubles	3 364	2 246	49,8

The Company's revenue amounted to 159.5 billion rubles, including revenue from electricity transmission - 145.4 billion rubles, revenue from utility connection - 9.0 billion rubles. Net profit in 2018 amounted to 6.6 billion rubles.

In 2018 compared to the previous year, the Company's revenue increased by 6.0%, including revenue from electricity transmission - by 5.1%, due to the growth in the required gross revenue and the “boiler” productive output set for 2018.

The growth in operating expenses, excluding the impairment loss on fixed assets compared to 2017, was 2.2%. On an ongoing basis, the Company implements operational cost management measures, which allows to ensure the dynamics of managed costs at a level below the CPI.

In 2018, the positive dynamics of adjusted EBITDA was reached, which amounted to 43.5 billion rubles during the reporting period.

At the end of 2018, there is an increase in the consolidated net cash flow. The change in the indicator to the level of last year amounted to (+) 1.1 billion rubles.

The Net Debt / Adjusted EBITDA indicator for the year was 1.95 and corresponds to the standard debt burden for companies with a high level of solvency.

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1Adjusted EBITDA is provided for reference only and is calculated as EBITDA (profit for the reporting period before taxes, interest and depreciation), excluding losses from impairment of fixed assets, impairment of advances made and provision for expected credit losses.

2 The rate of change in free cash flow is calculated as the difference between the net cash flow of the reporting period and the net cash flow for the same period last year. Net cash flow is calculated according to the Cash Flow Report, as the sum of “Balance of Cash Flow from Operating Activities” and “Balance of Cash Flows from Investment Activities”.

Table 1. Summary of Financial Position

Name of the indicator	Measurement unit	31.12. 2018	31.12.2017	Change (%)
Fixed assets	million rubles	311 144	303 883	2,4
Current assets	million rubles	26 957	27 347	-1,4
Total assets	million rubles	338 101	331 230	2,1
Net equity	million rubles	171 406	166 192	3,1
Fixed liability	million rubles	97 752	108 615	-10,0
Current liability	million rubles	68 943	56 423	22,2
Total equity and liabilities	million rubles	338 101	331 230	2,1

Table 2. Summary of Profit or Loss and Other Comprehensive Income

Name of the indicator	Measurement unit	2018	2017	Change (%)
Revenue	million rubles	159 485	150 494	6,0
- power transmission	million rubles	145 380	138 350	5,1
- revenue from the provision of services for connection to electric grids	million rubles	9 023	7 122	26,7
- other revenue	million rubles	5 082	5 022	1,2
Operating expenses	million rubles	(149 197)	(150 511)	-0,9
For reference: Adjusted operating expenses 3	million rubles	(147 566)	(144 321)	2,2
Other operating income	million rubles	6 494	8 249	-21,3
Financial income	million rubles	213	140	52,1
Financial expenses	million rubles	(5 750)	(5 802)	-0,9
Profit before tax	million rubles	11 245	2 570	over 100
Income tax expense	million rubles	(4 659)	(613)	over 100
Profit for the year	million rubles	6 586	1 957	over 100
Total comprehensive income	million rubles	6 755	1 374	over 100

Table 3. Operating expenses

Name of the indicator	Measurement unit	2018	% of total operating expenses	2017	% of total operating expenses	Change (%)
Expenses for services LGC, FGC UES	million rubles	63 282	42,4	62 975	41,8	0,5
Expenses for purchased electricity for loss compensation	million rubles	18 275	12,2	17 219	11,4	6,1
Depreciation	million rubles	20 911	14,0	20 446	13,6	2,3
Depreciation of capital goods	million rubles	1 631	1,1	6 190	4,1	-73,7
Staff costs	million rubles	19 082	12,9	18 853	12,6	1,2
Other expenses	million rubles	26 016	17,4	24 828	16,5	4,8
Total operating expenses	million rubles	149 197	100	150 511	100	-0,9
For reference: Adjusted operating expenses	million rubles	147 566	x	144 321	x	2,2

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3Adjusted operating expenses are presented For reference and are calculated without taking into account the loss on impairment of fixed assets.

For reference: The following subsidiaries are included in the consolidated statements of the Group: JSC MOESK-Engineering, JSC “Plant on repair of electrical machinery” (RETO), JSC Energotsentr.