Basic financial ratios

Basic financial ratios for 2009-2011:

Indicator 2009 2010 2011 Growth rate, %
Sales gross profit margin, % 11.8 15.77 18.6 2.79 pp
Sales net profit margin, % 2.70 7.80 7.64 -0.16 pp
Operating margin, % 4.88 9.26 10.92 1.66 pp
Product profitability, % 9.38 12.99 15.3 2.31 pp
ROEReturn on equity; net income of the company expressed as a percentage in relation to the equity capital, % 3.26 10.26 10.30 0.04 pp
EBITDAEarnings Before Interest, Tax, Depreciation and Amortisation; indicator showing the profit of the Company before deduction of income taxes, accrued interest on loans and depreciation margin, % 15.55 18.15 20.28 2.13 pp
Current assets/short-term debt 0.63 1.08 1.24 15
Accounts receivable, bn RUB 5.22 7.27 8.29 14
Current assets, bn RUB 7.47 9.38 12.81 37
Share of accounts receivable in current assets, % 69.88 77.52 64.67 -12.85 pp
Return on total Assets, % 2.17 6.63 6.11 -0.52 pp
Current liquidity ratio 0.63 1.07 1.23 0.16 pp
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In the period 2009-2011, a stable growth in profitability ratios of the activities of IDGC of Centre, JSC was observed. Thus the return on equity ratio (ROE) increased from 3.26% in 2009 to 10.3% in 2011. The indicator’s substantial improvement in 2010 (growth by 7.0 percentage points) was associated with a recovery in economic activity in IDGC of Centre, JSC’s areas of operations after the crisis in the world and the Russian economy in 2008-2009. In 2011, net profit growth of 10.4% also exerted a beneficial influence on the return on equity ratio.

EBITDA at year-end 2011 amounted to RUB 13.82 bn, 26.1% higher than the previous year’s level. A 2011 operating margin of 10.92% showed growth of 1.66 percentage points in comparison with 2010. The EBITDA margin in 2011 amounted to 20.28%. The improvement in operating margin indicators and the EBITDA margin is explained by the increase in the Company’s gross profit caused by surging revenue growth in comparison with production costs: in 2011, revenue growth amounted to 12.8% against an increase in production costs of 9.0%.

A small decrease in the sales net profit margin from 7.80% in 2010 to 7.64% in 2011 against the background of the growth of the operating margin is connected with an increase in constant tax liabilities (among these the consequence of creating provision for contingent liabilities).

The current assets of IDGC of Centre, JSC increased in 2011 from RUB 9.4 bn to RUB 12.8 bn. This increase during the reporting period is connected with a rise in accounts receivable, payments on which are expected in the course of 2012 due to the growth in volume of services provided.

IDGC of Centre, JSC’s current liquidity ration as of December 31, 2010 was at a level of 1.07. As of December 31, 2011, the value of this coefficient increased to 1.23.

Despite payment discipline violations by a number of power supply companies, the liabilities of IDGC of Centre, JSC to its suppliers and contractors were discharged in accordance with contractual terms.

In general, at year-end 2011, a considerable increase in the ratios of profitability and financial effectiveness of the Company could be observed. The Company’s management assumes that the general trend of growth of financial and operational ratios recorded at the end of the reporting period can continue in the years ahead.