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Edited Transcript of IRAO.MZ earnings conference call or presentation 14-Aug-19 9:00am GMT

Half Year 2019 Inter RAO YEES PAO Earnings Call (IFRS)

Naberezhnaya, 12 Moscow Aug 26, 2019 (Thomson StreetEvents) -- Edited Transcript of Inter RAO EES PAO earnings conference call or presentation Wednesday, August 14, 2019 at 9:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Alexandra Panina

Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board

* Evgeniy Nikolaevich Miroshnichenko

Public Joint Stock Company Inter RAO UES - CFO & Member of the Management Board

* Larisa Sadovnikova

Public Joint Stock Company Inter RAO UES - Head of IR

* Maslov Aleksey

Public Joint Stock Company Inter RAO UES - Member of the Management Board and Head of Strategy & Investment Division

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Conference Call Participants

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* Fedor Kornachev

Sberbank CIB Investment Research - Research Analyst

* Matvey Tayts

Sova Capital Limited, Research Division - Research Analyst

* Roman Alexeevich Filkin

Prosperity Capital Management Ltd - Director

* Sergey Beiden

Renaissance Capital, Research Division - Research Analyst

* Sergey Garamita

Raiffeisen CENTROBANK AG, Research Division - Research Analyst

* Vladimir Sklyar

VTB Capital, Research Division - Equities Analyst

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Presentation

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Operator [1]

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Dear ladies and gentlemen, welcome to the Disclosure Conference of the Inter RAO Group for the first half of the year 2019. You can ask your questions in the relevant presentation screen.

Now I'm giving it to the Head of the Strategy and Investments -- Head of Investor Relations, Larisa Sadovnikova.

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Larisa Sadovnikova, Public Joint Stock Company Inter RAO UES - Head of IR [2]

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Good afternoon, dear colleagues. Inter RAO is happy to see you again, and we are ready to present our operating and financial performance. This 6 months were very good for the Inter RAO Group, where we delivered strong -- strong performance. We also got -- increased our weighting in the MSCI Index. And we announced the first results of the long-term KOM market. Today, the speakers will be Evgeniy Miroshnichenko, CFO; and Aleksey Maslov, Head of Strategy and Investments. And also the Q&A session will be after the presentation. And also it will feature Alexandra Panina, Head of Internal Electricity Generation and our Deputy Adviser of the CEO.

And now, I'm giving the floor to Aleksey Maslov, Head of Strategy and Investments.

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Maslov Aleksey, Public Joint Stock Company Inter RAO UES - Member of the Management Board and Head of Strategy & Investment Division [3]

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Good afternoon, dear colleagues. Traditionally, we announce the key performance highlights of Inter RAO Group in the first group -- in the first half of the year. And Page 2 shows the key events that had impact on the key performance indicators of Inter RAO Group, broken down by business lines. All of these factors were the reason for our performance in the first 6 months.

So I can give you the brief highlights. The Generation business of our company. The most impact came from the commissioning of 732 megawatts of Kaliningrad Generation that are being leased by Mayakovskaya, Talahovskaya and Pregolskaya TPP with a total capacity -- in full capacity of 772 megawatts. And in the first 6 months, we commissioned Pregolskaya test power units. Also, a strong impact came from the commissioning of the last CDA facility of the Inter RAO Groups, that's the Zatonskaya CHPP with a total capacity of 440 megawatts.

Since the 1st of January, we decommissioned 2 inefficient, low-margin units at Kashirskaya GRES.

Also, this reporting period saw the increased pricing environment in the day-ahead market. Also, the price environment in the 1st and the 2nd pricing zones were favorable for us. Electricity price growth was more than 13.6%.

In the Supply segment, electric prices for end-users increased on average. Also, we increased our regional presence. We added 2 more regions to our portfolios, in Vladimir and Vologda regions.

In the Trading business, the price and depreciation of the ruble helped to increase our exports to Finland and to Lithuania. To Lithuania, by the way, almost twofold.

Also, Trakya Elektrik was standing by. And I would also like to note that before that period, it was in standby. Trakya Elektrik was in standby, but it didn't affect our financial performance because we received payments for available capacity. But actual generation was lower compared to the previous reporting period. And actually, it had impact on our results in the Foreign Assets segment.

Next page, key operating performance in terms of electricity and heat generation. You can see it on the left-hand side, you can see electricity generation. For our key asset electricity generation, the increase was 3.6% due to mix of factors in terms of our power plants, but the key driver was Kostromskaya GRES which increased generation by 47% because the facility was in high demand in the energy system. Also, there was some other facilities that contributed to this growth. I also mentioned the commissioning of the Tomsk CHPP, and it contributed to the growth of the BGC Group generation. I also announced a few reasons for increase in foreign generation. There was some decline in that due to dispatch schedule changes.

As to heat generation, the key driver was outdoor temperature, and we reduce our generation by almost 7% due to this outdoor temperature factor.

Next page, please. Page 5. It's about the increased efficiency. Our revenues across CDA facilities grew by almost -- by 15%, and the key drivers have been mentioned. It's commissioning of new facilities and increase in the selling price due to the payment of CDA delta and change of the day-ahead market coefficient and the price environment in the day-ahead market. It brought us RUB 2.6 billion across our CDA facilities.

Going back to the Heat Generation segment, I would like to highlight the high average payment collection rate. It's comparable to the previous reporting period also. At the bottom of the page, you can see the load factor of high-margin power units and optimization of load factor for low-margin power units. We also were helped by the system operator to deliver these figures.

Next page is about our Supply business. I would like to note that total supply was 100 terawatt hours, which is up almost by 4% year-on-year. It was also driven by considerable increase in our customer base, almost by 10%, which now totals 16.4 million users -- customers. It was mainly driven by the new 2 guaranteed suppliers in the group, but also the contribution was made by an increase in the customer base in Moscow and St. Petersburg in the first half of the year.

As to the Additional Paid Services segment, we keep going and we showed a 2-digit growth compared to the previous reporting period. And the key contributor was from Mosenergosbyt and Altayenergosbyt companies. And the key segments here to deliver strong growth in the Additional Paid Services were insulation and maintenance of midstream devices for individuals and legal entities.

As to our Foreign business, it's Page 7. The total was at 10 terawatt hours, which is slightly below year-on-year. You can see mixed dynamics here. Finland exports grew, while imports was mainly reduced, and it relates to Kazakhstan. So in the first half of the year, commercial supplies from Kazakhstan were almost non-existent. You can also see, on this page, the indicators, which I mentioned earlier, such as exports of electricity on the back of price spreads. It even exceeded our relatively optimistic expectations and our targets.

Well, that's basically it. And I'm giving the floor to Evgeniy Miroshnichenko, our CFO. He will tell you about the consolidated financial performance in the first 6 months of 2019.

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Evgeniy Nikolaevich Miroshnichenko, Public Joint Stock Company Inter RAO UES - CFO & Member of the Management Board [4]

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Thank you. Good afternoon, ladies and gentlemen. I would like to present the financial performance in the first 6 months of the year. You can see on Page 9 the key financials for the period. EBITDA grew by 16.4% -- by 31%, sorry. Operating expenses increased. Net debt is negative. It also reduced slightly.

And on the next pages, you can see the breakdown by segments. As I said, EBITDA increased by 31.5%. And the key contribution was from the Generation segment by RUB 14 billion and by the Trading segment, by RUB 5.3 billion and also Foreign Assets by RUB 1 billion.

And on the next pages, there will be more details. As to the generation and supply, on Page 11, all companies of the group demonstrated strong EBITDA growth, but key contribution was from Inter RAO Electricity Generation. It was driven by a number of external factors, favorable factors such as prices in the day-ahead market segment. And also the growth came from CDA delta and commissioning of new facilities in Kaliningrad region. Also TGK-11 was showing growth in terms of the day-ahead market prices, and Zatonskaya CHPP was also some contributor. And also, there was a good pricing environment for us, that's why we had good generation indicators.

As to the Supply business, EBITDA was almost flat. It was due to the regulation as we are moving to the benchmark supply model. In general, it will be offset in the second half of the year and we'll see growth year-on-year.

Next page. You can see the Trading and Foreign Assets. You can see in the Trading business, EBITDA grew almost twofold. It was thanks to our efficiency of supplies to Europe, such as Finland and Lithuania. And as to Foreign Assets, the key contribution was from the Turkish side. As Aleksey mentioned, we completed the project, so that's it.

Next page shows our consolidated operating expenses. OpEx grew by 11.5%, which is below revenue growth. The key contribution was from purchased electricity and capacity, electricity transmission fees and fuel expenses.

Next page highlights our debt and liquidity breakdown. Debt is quite low. It is just RUB 6 billion. It's mainly represented by short-term debt, nominated in Russian rubles at fixed interest rate.

As to net debt, it is negative. And as of the 13th of June, it was RUB 172 billion, which is slightly below than a year ago. Our lease liabilities increased as we commissioned new facilities in the Kaliningrad region and the application of the relevant IFRS standard.

Thank you very much, and we are ready to take your questions now.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question comes from Vladimir Sklyar, VTB Capital.

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Vladimir Sklyar, VTB Capital, Research Division - Equities Analyst [2]

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Congratulations on your strong financial performance. The first question. As to your full year guidance, it was good. What are your latest guidance figures for the full year and investments? RUB 30 billion was the last guidance. Did you change your expectations? And the second question is about Ekibaztuskaya GRES. Could you please give more color on the process -- on the sales process? And do you have any price indications, or at least, how it will affect your debt? And the third question is about the KOM market. Very good preliminary results for KOM for 2023 to 2024. So what are your expectations for the KOM for 2025. And should we expect maintenance CapEx because the KOM prices will increase because we'll need -- you'll need to modernize your assets? And my last question is about -- what happened to your investments?

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Unidentified Company Representative, [3]

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Thank you very much, Vladimir. I will start. As to EBITDA, we think it will be within the range of 10% to 15% compared to year-on-year. But the range is quite wide because it's difficult to give a specific figure.

As to investment, we expect around RUB 25 billion. And you said RUB 30 billion to RUB 35 billion, it was the average range for the next year. Maybe also [midstream] devices were included, but this year, we expect 25 billion -- RUB 25 billion for the full year.

As to Ekibaztuskaya GRES, it's about debt decrease. Now it will not go down because we don't consolidate Ekibaztuskaya GRES debt. Just the investment will be exited from. It will be divested. And also our surety will be removed, so it's quite considerable. I think Alexandra will tell you about the KOM markets.

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [4]

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I will answer the KOM question. First of all, the price drop was quite expected because of the government regulation. First, the indexation will be by 15% by 2025 and also by 5% going forward. So in total, it's 20%. So the key points will be indexed even further. So this 20% will be the base indexation, and also there will be more indexation for the 3-year price. And that's why the growth rate will be above 20%. Also, there were some other factors such as reservation coefficient. It was slightly down. And growth was moderately growing. But the base fundamental factors drove this price, which was quite expected after the regulation was approved. Beyond that period, we don't expect considerable growth because we don't expect any additional indexation apart from those mentioned in the government regulation. So it's 2022 to 2024. So these are the years when the highest indexation will take place. So for 2025, we expect moderate indexation, moderate price growth.

And next question is about the KOM price growth. Conditioned the expectations of system operators, so we'll revise our plans. We don't have official data yet. As soon as we get our official data, we'll revise our CapEx program. Vladimir, there was also a last question from your part. We don't expect considerable changes. Our shareholders can -- are ready to communicate. So we have all the relevant permits according to the law, and we expect that this investment, which was made in 2016, will be fully compensated. We are just not so clear about the outlook, so we went the most stringent -- most conservative route and announce it in our reporting.

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Operator [5]

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Next question comes from Sergey Garamita, Raiffeisen Bank.

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Sergey Garamita, Raiffeisen CENTROBANK AG, Research Division - Research Analyst [6]

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Congratulations to your solid performance. I got a technical question about Kaliningrad. Looking at your financials, your lease payments and the cash flow statements were almost flat in the second quarter compared to the first quarter and year-on-year. So they're mainly flat. It is around RUB 1.9 billion per quarter, while your capacity almost tripled in March this year. So what was the reason for those changes, or the absence of changes? So will your lease payments be changed or flat going forward?

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Evgeniy Nikolaevich Miroshnichenko, Public Joint Stock Company Inter RAO UES - CFO & Member of the Management Board [7]

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Just a second, please. That was a methodological question. This is Evgeniy Miroshnichenko speaking. I'm sorry for the delay. Could you please clarify a little bit because I just didn't understand that fully?

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Sergey Garamita, Raiffeisen CENTROBANK AG, Research Division - Research Analyst [8]

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As we commission leased facilities, for example Kaliningrad facilities, we have new financial obligations recognized in the relevant financials. And these obligations grew. And as we thought to manage these figures, we try to repay these obligations, such as repayment of lease obligations. Now it is RUB 1.8 billion. Are you talking about this? As I understand, with payments, it is partly recognized in the financial parts, but anyway, it is recognized in the cash flow statements. In the first quarter of this year, it was RUB 1.9 billion, and almost the same figure was added, by RUB 1.9 billion. So it should be an almost threefold growth. So was there a one-off payment, or is it sort of a split between all periods?

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Evgeniy Nikolaevich Miroshnichenko, Public Joint Stock Company Inter RAO UES - CFO & Member of the Management Board [9]

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This is Evgeniy speaking. We will send you the breakdown, but the idea is that it's the total amount of cash payments. There are no one-offs, and everything is linked to the commissioning and CapEx. And our colleagues will send you the breakdown.

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Operator [10]

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Next question comes from Roman Filkin, Prosperity Capital.

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Roman Alexeevich Filkin, Prosperity Capital Management Ltd - Director [11]

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I have 2 questions. First is about the follow-up about [com] results for 2020 to 2024. Am I right thinking that the figures which you announced, they are shown in prices of 2019, meaning that actual capacity prices in 2024 will be increased by the inflation rate for the relevant years, starting from 2020 to 2024. That's the first question. And the second question is about the Supply segment. Can you please explain the volatility of Supply segment profits because in the presentation, the revenue is almost flat while EBITDA used to be RUB 7 billion in the first quarter and now just a little less RUB 4 billion in the second quarter?

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [12]

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This is Alexandra Panina speaking. I will explain. If I understand your question correctly, you were asking about 2025, how many times it will be indexed? For 2025, the KOM price should include the consumer price index for the previous 5 years. So it should be indexed by a little bit more than -- by 20%. So it will be indexed by the actual CPI, but we don't know the future CPI rate. But by now, we expect in 2025, the price will be more or less comparable to the price of 2024, but it will depend on the demand and supply such as commissioning of new facilities, for example. Meaning that some fundamental factors may affect the environment. We are not aware of those factors yet, but we think that the pricing -- KOM pricing in 2025 will be more or less close to 2025.

So speaking about the follow-up question, I'm trying to understand. In 2022, the capacity price will be increased by CPI of 2019 to 2022. Could you please repeat your question because it's not completely clear?

Now the system operator announced the results. The price was RUB 167,000 for 2022. So the company will see this amount. It will be increased by the CPI rates between 2019 to 2022.

Yes, the price announced by the system operator will be increased by the CPI. So if we take the CPI you mentioned of around 4% per year, so the price in the 1st pricing zone, it will be instead of 167, it will be 180. And in the 2nd pricing zone, it will be 100 -- sorry, it will be 211. So this will be increased really. The figures announced by the system operator will be really increased by the CPI indeed. Thank you very much, and as to your second question, usually the second quarter is worse than the first quarter. So it's a factor of volumes mainly.

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Roman Alexeevich Filkin, Prosperity Capital Management Ltd - Director [13]

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So it's only a volume effect?

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [14]

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Yes, mostly if it was like the volume and the distribution between different categories.

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Roman Alexeevich Filkin, Prosperity Capital Management Ltd - Director [15]

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Okay, thank you very much.

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [16]

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The last few years, we had some minor one-offs related to penalties and fines. We charged it on our debtors.

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Roman Alexeevich Filkin, Prosperity Capital Management Ltd - Director [17]

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And one follow-up question about Turkey. Am I right thinking that you completed your operations in Turkey?

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [18]

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Yes, the contract is over. It was not renewed.

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Roman Alexeevich Filkin, Prosperity Capital Management Ltd - Director [19]

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So do you lose some assets or liabilities will decrease?

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [20]

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Thank you for your question. As I said, according to the agreement with the Ministry of Energy, we received all the necessary compensations in order to have a positive result -- a positive return on investment for this project. But also, we keep exploring different projects and opportunities which we could potentially pursue in Turkey. And if we have any specific projects or initiatives, we will let you know. We analyzed different projects, for example, including construction of new capacities. Since 2012, we operated in Turkey -- have been operating in Turkey, and the legal regime for our assets was quite stable and all our arrangements were complied with by the Turkish side. So we didn't have any unexpected events and uncertainties. We have some optimism for Turkey if they ensure our stable rate, a positive rate of return.

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Roman Alexeevich Filkin, Prosperity Capital Management Ltd - Director [21]

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And what do you expect to receive from Turkey?

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [22]

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We are completing payments for the last supplies and for gas. Also, we can sell something -- we can supply something, but our final financial result will depend on different payments and settlements. So I think we'll be able to give you the full picture by the end of the year, I think.

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Roman Alexeevich Filkin, Prosperity Capital Management Ltd - Director [23]

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Yes, it would be nice to have your financial results for investors and analysts, to have your -- to see your actual IRR.

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [24]

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We will show you definitely, all right. Thank you.

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Operator [25]

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The next question comes from [Baban Sebi].

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Unidentified Analyst, [26]

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I have a question. It is a technical question about your payables in the second quarter 2019. Were there any specific factors? What can we expect looking forward?

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Unidentified Company Representative, [27]

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Thank you for your question. Yes, it was due to the Kaliningrad project. We have an engineering segment. It depends on advanced payments. That's why the -- you can see this material, material figures in the working capital in terms of...

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Unidentified Analyst, [28]

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So it's a one-off payment that you can expect only as soon as you commission the last facility?

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Unidentified Company Representative, [29]

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Now we are receiving -- now we are completing the works in line with the advanced payments we already received. So as soon as we finish the Kaliningrad region in the next year, there will be no material changes any more, material payments.

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Operator [30]

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Next question comes from Vladimir Sklyar, VTB Capital.

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Vladimir Sklyar, VTB Capital, Research Division - Equities Analyst [31]

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I'm sorry, just a general question. Some time ago, there was a press release concerning the upcoming launch of the management incentive program. Could you please give some color on the timing and some details about this program and how this strategy development is going? And just a technical question. In the Trading business, profits from Poland increased substantially. Obvious selling considerable volumes to Poland, how does it work?

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Maslov Aleksey, Public Joint Stock Company Inter RAO UES - Member of the Management Board and Head of Strategy & Investment Division [32]

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Vladimir, this is Aleksey Maslov. I will start with your first question. In line with our schedule of the Board, we are planning to review our revised strategy in May 2020. In the fourth quarter, the draft document will be reviewed by the Management Board and the committees of -- the Board of Directors. But there are different initiatives, and it will be also reviewed by experts. So we'll need to comply with some internal -- so that's a fairly slow process, a fairly slow exercise. But the final point is May 2020.

And as to the incentive program, a long-term program, it will be in line with our strategy. Some approaches will be proposed by the strategy. Now we are developing them. So it will be also subject to the review by the Management Board. But we think that the incentive program, which was implemented in 2016 to 2018, it was a very strong instrument. It's brought the management team closer to the shareholders, and some option elements will probably be included in the new program which will be under discussion. It will be developed by the end of the year.

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [33]

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This is Alexandra Panina speaking, I will tell you about Poland. We have a subsidiary, Inter RAO Lithuania. There are some subsidiaries selling to Estonia, Latvia and Poland as well. We are selling it via subsidiaries. We sell electricity to retail consumers. So it may be related to Nord Pool supplies, but it's just our efforts aimed at increased efficiency in the retail markets. Hopefully, you will see it not only in Poland but also in Latvia and Estonia.

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Vladimir Sklyar, VTB Capital, Research Division - Equities Analyst [34]

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Yes, it's clear. But can you please explain how can this profit we saw in the first 6 months, can it be retained going forward?

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [35]

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Yes, you're right. But it's difficult to forecast because prices are quite volatile and it would depend on different factors.

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Operator [36]

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Next question comes from Sergey Beiden, Renaissance Capital.

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Sergey Beiden, Renaissance Capital, Research Division - Research Analyst [37]

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I have a technical question. I'm looking at your supply and business collection rate. It declined. But in accounts receivables, it's almost flat. I understand it's too early to predict about -- to say that it should be recognized in your financials. But is it somehow related to the fact that -- so what's the reason that you had low collection rate at your supply companies?

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Unidentified Company Representative, [38]

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Thank you for your question. The collection rate is not a fantastic one. We are increasing our efforts. And as to the technology of the process, the payment capacity of our consumers is beyond our control. And it's recognized. The payments are shown as discount. This will be reflected in the revenue for the period, but hopefully...

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Sergey Beiden, Renaissance Capital, Research Division - Research Analyst [39]

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Okay. And the second question about the midstream devices. As far as I understand, payments for the new midstream devices will be included in the tariff, but it's clear that the tariff will be growing considerably if it happens. Do you somehow understand how it's going to be implemented? Is there a chance that you will not get compensation via tariffs so you'll need to subsidize it from different segments?

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Unidentified Company Representative, [40]

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Thank you Sergey. This is [Marina Farushina]. You are right, but we have a federal law. According to this law, guaranteed suppliers need to install this midstream device in blocks of flats. So we do it only for retail consumers. And secondly, according to the information from the Ministry of Energy, they are developing different regulations, according to which these midstream devices will be installed and the government indicated that there will be a benchmark which will be included in the supply margin of the companies who have been installing these midstream devices. So we don't expect that we'll need any sources of investment for this installation, but we may find additional sources for financing to this end. If you want to have a cutting-edge midstream device with the smart home functionality, we are ready to provide this.

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Operator [41]

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Next question comes from Fedor Kornachev, Sberbank CIB.

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Fedor Kornachev, Sberbank CIB Investment Research - Research Analyst [42]

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Can you tell us, please, the markets, around the details of your strategy? As far as I understand, it will be discussed by the Board. But before that, will it be publicly discussed? And the second question is that your cash flow includes RUB 6.3 billion of buyback of your shares, right?

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Unidentified Company Representative, [43]

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Yes, Fedor. I will start the -- with SSK. So we're going to complete the payments and the transaction with SSK. And your second question?

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Fedor Kornachev, Sberbank CIB Investment Research - Research Analyst [44]

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As to the strategy?

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Unidentified Company Representative, [45]

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This document will be reviewed by the Board. And it will be -- they will vote on the final draft, the final version of the document. There might be some divisions in terms of our investment policy. So the final decision will be taken in May, but our mission is just to prepare the document, to draft it in order to not miss anything. So that we can take the most -- well-balanced decision. To take into account the interest of all stakeholders. So we are going to plan all these events in order not to delay the final document.

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Operator [46]

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The next question comes from Matvey Tayts.

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Matvey Tayts, Sova Capital Limited, Research Division - Research Analyst [47]

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Looking at the cash flow statement and your cash flow from operations is 73.6. Last year, it was 57. And there is a big difference from EBITDA. And I can see one reason why this happens. It's because of regulation of financial instruments. But could you also comment on this material difference because 78 EBITDA -- and here, you can own 73. But they should be close to each other.

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Unidentified Company Representative, [48]

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There is a breakdown about the changes in the working capital?

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Matvey Tayts, Sova Capital Limited, Research Division - Research Analyst [49]

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No, no. It's before changes in the working capital. And could you please repeat the figures?

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Unidentified Company Representative, [50]

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It's 73.684, cash flow before changes in the working capital and the income tax.

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Matvey Tayts, Sova Capital Limited, Research Division - Research Analyst [51]

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So it's actually EBITDA. But it's different from the EBITDA figure that you report. That's what I'm trying to understand. What is the cause of this? Why the difference is so huge?

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Unidentified Company Representative, [52]

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You mean 70 -- the difference between 78 and 73?

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Matvey Tayts, Sova Capital Limited, Research Division - Research Analyst [53]

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Yes.

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Unidentified Company Representative, [54]

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We can explain that later in writing.

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Operator [55]

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(Operator Instructions) We have no further questions from the lines.

We can move on to your questions from the webcast, written questions.

We have a next question about the day-ahead market price forecast in the second half of the year.

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Alexandra Panina, Public Joint Stock Company Inter RAO UES - Interim Head of the Trading Block & Member of Management Board [56]

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It's Alexandra Panina speaking. I'll explain the forecast of the day-ahead market prices. We were really surprised by the prices in the first half of the year. But please note that since July and August, these prices declined both in the 1st and 2nd pricing zones. That was a joke, but seriously, in the second half of the year, they will be slightly lower than in the first 6 months. The factors are the following. The first half of the year was -- saw a high water level in Siberia. So in the 2nd price zone -- so in the second half of the year, we expect a low -- what level -- so generation will be a bit lower. So the second factor will be the repairs of nuclear power units in the first half of the year. So it means that in the second half, we'll see more repairs. Also the gas price increased in July by almost [35%]. So these mixed factors such as the repair program for nuclear power units and gas price growth, as I see it, will bring about a slight decline of prices compared to the first 6 months of the year.

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Larisa Sadovnikova, Public Joint Stock Company Inter RAO UES - Head of IR [57]

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Dear colleagues, we have many questions, which repeat the questions which we already discussed. So we'll handle them in writing. But if there are no questions from both sides, so we are ready to complete the webcast and invite you to the next event. Are there any further questions? No, the run-on. All right. This is Larisa Sadovnikova speaking. Dear colleagues, we are completing our webcast today. I was happy to see you, and we expect to see you on our next webcast. Thank you.

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Operator [58]

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This is to conclude our conference call. Thank you for your attention. You may now [disconnect].

[Statements in English on this transcript were spoken by an interpreter present on the live call.]