Indicаtor, mln tenge

2019
(actual)

2020
(actual)

2021
(actual)

2022
(forecast)

2023
(forecast)

1

Income from sales of goods and services delivered

243,722

283,010

332,537

378,964

423,928

1.1.

Electricity production

169,369

207,917

253,593

275,737

310,351

1.2.

Sale of electricity by energy supplying organizations

100,171

106,911

125,685

146,617

161,635

1.3.

Heat production

16,781

19,202

18,703

19,244

19,628

1.4.

Transmission and distribution of electricity

38,028

40,685

46,428

50,413

57,040

1.5.

Sale of chemically purified water

1,515

1,626

1,781

1,787

1,791

1.6.

Lease

3,925

4,041

3,930

8,005

10,627

1.7.

other

2,555

3,181

3,702

5,089

5,351

2

Cost of goods sold

(195,891)

(225,185)

(254,847)

(292,079)

(326,183)

2.1.

Cost of electricity production

(130,934)

(156,182)

(183,478)

(204,488)

(232,865)

2.2.

Cost of electricity sales by energy supplying organizations

(101,280)

(111,195)

(128,428)

(146,118)

(161,127)

2.3.

Cost of heat production

(16,338)

(18,804)

(19,306)

(20,027)

(21,191)

2.4.

Cost of electricity transmission

(32,543)

(54,365)

(39,358)

(44,976)

(49,008)

2.5.

Cost of sale of chemically purified water

(1,356)

(1,679)

(1, 848)

(1,789)

(1,868)

2.6.

Cost of other types of core business

(832)

(946)

(767)

(1,233)

(1,222)

 

Amortization of fixed and intangible assets

(54,223)

(57,331)

(55,168)

(58,030)

(66,344)

3

Gross profit

47,832

57,826

77,690

86,885

97,745

4

Financing income (1)

2,377

2,916

2,616

633

709

5

Other income (1) (2)

5,376

4,637

7,278

982

1,034

6

Expenses for sale of products and services

(7,999)

(10,202)

(9,029)

(8,235)

(8,584)

7

General administrative expenses

(12,710)

(15,826)

(14,793)

(15,051)

(14,840)

8

Operating profit 

27,123

31,798

53,868

63,599

74,320

9

Earnings before amortization, interest and CIT (EBITDA)

82,487

99,728

123,447

130,173

168,907

10

Finance costs

(32,319)

(31,025)

(30,139)

(23,799)

(21,300)

11

Other expenses from non-core operations (3) (4) (5) (6)

(1,920)

(4,061)

(23,354)

(137)

(141)

12

Share of profit / loss of organizations accounted for using the equity method and investments impairment

11,191

9,474

13,455

7,619

27,416

13

Profit (loss) from discontinued operations

0

0

0

0

0

 

Profit (loss) from disposal of subsidiaries

0

0

0

0

0

14

Profit (loss) before tax

11,829

13,739

23,723

48,897

82,039

15

Corporate income tax expenses

(4,717)

(5,655)

(8,377)

(13,118)

(15,140)

16

Total profit before minority interest

7,111

8,083

15,347

35,778

66,899

17

Minority interest

276

76

300

641

858

18

Total profit attributable to the Group's Shareholders

6,835

8,008

15,046

35,138

66,041

1.In Financial Report, foreign exchange income/expenses arising from loans received are reflected in financial income/expenses, depending on whether the difference has arisen, positive or negative. The rest of the exchange rate difference is shown in other income/expenses. In management reporting, any exchange rate income/expenses are reflected in other income/expenses

2. in FS impairment loss (NET) was recognized in “Impairment loss/income from recovery of non-financial assets(net)” item

Note: interpretation of income and cogs was presented with a breakdown by types of activities (not by segments) and was mentioned without elimination.

REVENUES FROM SALES OF PRODUCTS AND SERVICES PROVIDEDacross “Samruk-Energy” JSC group of Companies in 2021 amounted to 323,537 mln tenge

Consolidated revenue increased in the electricity generation segment because of the growth of electricity tariffs and sales volumes. The main growth is observed at “Ekibastuzs SDPP-1” LLP due to an increase in the volume of electricity sales in the domestic market by 18% which resulted from an increase in demand for electricity in the domestic market, as well as an increase in the selling tariff.

STRUCTURE OF INCOME IN 2021 BROKEN DOWN BY CORE BUSINESSES:

An increase in electricity transmission revenue is because of an increase in electricity transmission volumes by 812 mln kWh (12%) and the electricity transmission tariff of “Alatau Zharyk Company” JSC from 5.95 tenge/kWh to 6.07 tenge/kWh.

In the sales (sales) segment, the growth in revenue is associated with an increase in the volume of electricity sales by 668 million kWh (11%) and the tariff for the sale of electricity by “AlmatyEnergoSbyt” LLP from 17.66 tenge/kWh to 18.69 tenge/ kWh.

Forecast for the future period: in the forecast for 2022, sales revenue is planned in the amount of 378,964 mln tenge, which is higher than 2021 actual by 46,427 mln tenge or 14%. An increase is connected with the growth of tariffs for electricity generation and transmission.

In the forecast for 2023, there is an increase in income compared to the forecast for 2022 because of an increase in income from electricity generation, mainly due to an increase in sales, transmission and sales of electricity, as well as due to an increase in tariffs for generation, transmission and sales of electricity.

Revenues from sales of products and services rendered detailed per producer

Indicator, mln tenge

2019 (actual)

2020 (actual)

2021 (actual)

2022 (forecast)

2023 (forecast)

Income from sales of products and services rendered

243,722

283,010

332,537

378,964

423,928

“ESDPP-1” LLP

108,017

123,478

166,366

174,846

195,733

“AlmatyEnergoSbyt” LLP

100,171

106,911

125,685

146,617

161,635

“Almaty Power Plants” JSC

64,047

74,481

78,654

88,385

95,002

“Alatau Zharyk Company” JSC

38,167

40,819

46,594

50,585

57,414

“Moynak HPP” JSC

9,883

20,520

19,003

21,642

23,870

“FWPP” LLP

2,279

6,761

7,183

8,721

9,282

“Shardarinsk HPP” JSC

4,592

5,031

4,881

5,570

6,350

“Bukhtarminsk HPP” JSC

3,924

4,040

3,927

8,005

10,627

"Ereymentau Wind Power" LLP

 

 

 

403

4,345

'Energy Solution center' LLP

1,105

1,287

1,128

1,645

1,672

“Samruk Green Energy” LLP

158

236

399

475

493

Intercompany turnover (elimination)

-88,621

-100,554

-121,285

-127,929

-142,496

The main share in the Company’s operating income is occupied by “Ekibastuz SDPP-1” LLP, “Almaty Power Plants” JSC, “Alatau Zharyk Company” JSC, “AlmatyEnergoSbyt” LLP. At the same time, when consolidating income, intra-group turnovers are excluded from the total amount, mainly for power generation and distribution companies.

Cost of goods sold and services delivered

Indicator, mln tenge

2019 (actual)

2020 (actual)

2021 (actual)

2022 (forecast)

2023 (forecast)

Fuel

52,340

59,109

60,320

69,214

71,508

Remuneration of labor and related expenses

26,775

29,394

34,120

36,524

38,187

Cost of purchased electricity 

13,673

22,865

42,426

53,388

69,791

Maintaining the availability of electric capacity

7,692

10,094

8,718

10,006

9,924

Depreciation of property, plant and equipment and amortization of intangible assets

54,227

57,331

55,168

58,030

66,344

Maintenance & repair

6,879

8,520

9,901

12,694

13,281

Services for electricity transmission and other services

10,331

11,494

13,239

13,103

13,909

Materials

1,844

1,713

1,930

2,343

2,360

Water supply

3,962

4,847

6,329

6,697

7,121

Grid losses

193

2

2

5

5

Taxes other than income tax

4 ,586

4,704

4,923

5,976

7,194

Emission charges

4,338

4,616

7,802

9,220

10,189

Outsourced services 

5,383

6,003

5,649

11,439

12,770

Other

3,668

4,492

4,320

3,440

3,600

TOTAL

195,891

225,185

254,847

292,079

326,183

(1) in FS emission charges for 2018–2020 were recorded “Taxes other than income tax” item

According g to results of 2021, cost of goods sold amounted to 254,847 mln tenge, which is 13% higher than 2020 actual figure. An increase in costs is mainly due to an increase in coal costs (because of an increase in electricity production volumes) and the cost of purchased electricity from “SFC RES” LLP (increase in purchase volumes). There is also an increase in expenses due to the growth in prices for goods and services, and an increase in depreciation mainly at “Ekibastuz SDPP-1” LLP as a result of fixed asset revaluation performed on 31.12.2020.

THE STRUCTURE OF COST OF GOODS SOLD BY MAIN TYPES OF ACTIVITY

Forecast for the future period: in the forecast for 2022 and 2023, cost of goods sold increases due to an increase in prices for goods and services.

DISTRIBUTION COSTS,, MLN TENGE

ADMINISTRATIVE EXPENSES,, mln tenge

Distribution costs for 2021 decreased by 1,173 mln tenge (by 11%) compared to 2020 and amounted to 9,029 mln tenge. This deviation is caused by a 53% decrease in exports compared to 2020, as well as due to reduced prices for KEGOC services in 2021.

Forecast for the future period: In the forecast for 2022, distribution costs is planned in the amount of 8,235 mln tenge, which is lower than the 2021 actual by 794 mln tenge or 9%. The decrease is due to the exclusion of export volumes.

FINANCE COSTS,MLN TENGE

At the end of 2021, administrative expenses amounted to 14,793 mln tenge, which is 1,033 mln tenge less or 7% compared to the same period in 2020. The decrease was mainly for “Bukhtarminsk HPP” JSC due to additional VAT taxes and accrual pennies in 2020.

Forecast for the future: In the forecast for 2022, administrative expenses are higher than in 2021 and amount to 15,051 mln tenge. An increase is because of indexation of staff salaries.

Financial expenses at the end of 2021 amounted to 30,139 mln tenge, which is lower than the 2020 actual value by 886 mln tenge. The main decrease at "Ekibastuz SDPP-1" LLP is connected with the repayment of principal debt.

Forecast: Forecast for 2022, financing costs amount to 23,799 mln tenge. The deviation is mainly caused by HO due to the planned early repayment of the borrowed loan from ADB, as well as the decrease in expenses at “Ekibastuz SDPP-1” LLP and “Ereymentau Wind Power” LLP because of the change in raising borrowed funds.

Share of profits of joint ventures and associates and impairment of investments

Indicator, mln tenge

2019 (actual)

2020 (actual)

2021 (actual)

2022 (forecast)

2023 (forecast)

Share of profits of joint ventures and associates

11,191

9,474

13,455

7,619

27,416

Share profit for 2021 amounted to 13,455 mln tenge, an increase compared to the same period by 3,981 mln tenge or 42%.

The main changes occurred in the following assets:

ESDPP-2 (50%) – profit for 2021 amounted to 2,206 mln tenge, with a loss for 2020 (1,853) mln tenge, an increase in profit by 4,059 mln tenge compared to the same period of last year is mainly because of growth of operating profit by 4,054 mln tenge as a result of growth in income from core activities (growth in sales volumes and electricity tariffs).

Forum Muider (50%) – profit for 2021 amounted to 11,383 mln tenge, profit for 2020 amounted to 11,504 mln tenge, 122 mln tenge decrease was mainly due to the reduction of operating profit as a result of an increase in cost of goods sold and G&A.

LIQUIDITY AND FINANCIAL STABILITY INDICATORS

Compliance with covenants from external lenders:

Covenant

Standard

2019 actual

2020 actual

2021 actual

note

Debt/Ebitda (EBRD, ADB)

No more than 3.5

3.31

2.96

2.70

Is complied

EBITDA/Interest (EBRD, ADB)

No less than 3.0

3.34

3.76

5.00

Is complied

Debt/Equity (KDB)

No more than 2.0

0.56

0.54

0.59

Is complied

Description

2018 actual

2019 actual

2020 actual

2021 actual

Debt/EBITDA

3.18

3.31

2.96

2.7

Debt/Equity

0.65

0.56

0.54

0.59

Current liquidity

1.04

0.70

0.75

0.53

At the end of 2021, “Samruk-Energy” JSC complied with financial and non-financial covenants of creditors, which are fixed on a semi-annual basis.

At the end of 2021, “Samruk-Energy” JSC achieved the target indicators with regard to financial stability ratios set by the shareholder.

Growth in debt load

At the end of 12 months of 2021, the consolidated nominal debt of the Company amounted to 349.9 bn tenge, the growth of nominal debt for the reporting period compared to the 2020 results (325.4 bn tenge) amounted to 24.5 bn tenge.

The growth of nominal debt in 2021 is due to the implementation of the Project “Restoration of power unit No. 1 including the installation of new electrostatic precipitators at “Ekibastuz SDPP-1” LLP plant”.

As part of mitigating currency and inflation risks, the Company conducted following activities in 2019–2021:

Refinancing of foreign exchange liabilities in tenge – "Moynak HPP" JSC in the amount of 148 mln US dollars, "Ekibastuz SDPP-2" JSC in the amount of circa 100 bn tenge. As a result, the share of foreign currency liabilities in the loan portfolio was reduced from 17% to 1% (considering SDPP-2, the effect is higher than these figures).

To reduce inflation risks, activities on early repayment of EBRD loans in the amount of 21 bn tenge, of which 18 bn tenge were repaid by issuing the Company’s first green bonds on the AIX platform.

Reduction of interest expenses

Interest expenses reduced owing to scheduled (20.8 bn tenge) and early repayments of debt (36.9 bn tenge), performance of works aimed at reducing interest rates by changing the terms of financing and refinancing existing loans of "Samruk-Energy" JSC group of companies using new alternative sources of financing.

Credit rating (Fitch Ratings)

At the end of 2021, the long-term credit ratings of Samruk-Energy JSC from the international rating agency Fitch Ratings were confirmed at the level of "BB", the outlook was changed from "Stable" to "Positive".

Deals

Information on significant, major deals, interested party transactions and other important transactions is disclosed in “Samruk-Energy” JSC Financial Statements (Volume 2).

Fines

The total amount of significant fines and non-financial sanctions across “Samruk-Energy” JSC group

2021

On labor (number of inspections), including:

5

The amount of fines (thous. tenge)

0

On occupational safety, including

3

The amount of fines (thous. tenge)

656,325

For fire safety, including:

8

The amount of fines (thous. tenge)

451.76

On sanitary and epidemiological supervision, including:

10

The amount of fines (thous. tenge)

3,098,375

Energy supervision and control, including:

24

The amount of fines (thous. tenge)

291.7

Total amount of fines with respect to all inspections (thous. tenge)

4,498.16

Сases related to hindering from competition and violation of antimonopoly legislation that occurred during the reporting year were unavailable.

The monetary value of significant fines and the total number of non-monetary sanctions imposed for non-compliance with environmental laws and regulations are presented in the Environment section.

Authorized state bodies (labor inspection, occupational safety, fire safety, energy supervision and control, sanitary and epidemiological supervision) checked for compliance with the requirements of the law and issued 33 nonconformance reports without imposing financial sanctions.

Comparative analysis  (benchmarking)

Benchmarking serves as one of the essential elements of governance of “Samruk-Energy” JSC. The purpose of the benchmarking is to compare the operating and financial performance with foreign peer companies to identify the strengths and weaknesses of “Samruk-Energy” JSC. The following indicators were used for benchmarking:

  • EBITDA margin;
  • Debt / EBITDA
  •  Ratio of the share of borrowed funds (Debt / Equity)
  • Return on invested capital (ROIC);

For benchmarking, data from the following peer companies were used:

  • Mosenergo JSC (Russia);
  • CEZ Group (Czech Republic);
  • Drax Group (Great Britain).
Benchmarking results

EBITDA MARGINfor 2021

RETURN ON INVESTED CAPITAL (ROIC)in 2021

As of today, Samruk-Energy is inferior in some respects compared to foreign peer companies.

Financial strength indicators show that Samruk-Energy uses all available financial leverage.

At the same time, in terms of EBITDA margin, Samruk-Energy outperforms its peers. This indicator demonstrates a high profitability of sales. As regards ROIC (return on long-term invested capital), Samruk-Energy is at the level of European peers. At the same time, according to this indicator, Samruk-Energy is considerably inferior to the English holding company.

Along with that, it should be noted that, unlike public analogue companies, “Samruk-Energy” JSC belongs to the Government of the Republic of Kazakhstan, and therefore, the Company is an agent of state policy in power industry. In this regard, as well as with a high degree of depreciation of energy sector, socially significant investment projects have been implemented since 2009 (aimed at the reliable and stable operation of the Republic of Kazakhstan energy system), which resulted in a significant increase in invested capital and, accordingly, reduced the rate of return on investment.

An additional factor affecting the profitability of investments is the low level of electricity tariffs in the Republic of Kazakhstan in comparison with the countries of peer companies.

Average electricity tariff in 2021,tenge/kWh

Country

Average tariff per kWh

In tenge/kWh

Average rate for 2021

Kazakhstan

18.62 tenge

18.62 tenge/kWh

 

Russia

4.16 rouble

24.04 tenge/kWh

5.78 tenge/rouble

Czhech Republic

0.18 euro

90.73 tenge/kWh

504.04 tenge/euro

Great Britain

0.24 euro

120.97 tenge/kWh

Source: Eurostat, Rosstat