Economy and Finance > Credit Portfolio and Liquidity

Dynamics of key financial indicators, RUB million

Indicator December 31, 2010 December 31, 2011 December 31, 2012 Dynamics 2010/2011 Dynamics 2011/2012
Net assets cost 26,737 27,144 27,202 1.5 % 0.2 %
Ratio of net assets to the authorized capital 2.79 2.83 2.84    
Ratio of borrowed funds to capital and reserves (%) 42 50 67 19.1 33.8
Equity to debt ratio (without taking into account advances for technological connection) 36% 44% 62% 21.5% 41.2 %
Ratio of long-term indebtedness to long-term indebtedness and equity 0.18 0.22 0.32 23.5% 43.1%
Ratio of long-term indebtedness to long-term indebtedness and equity 138 95 96 -31.1 0.5
Accounts receivable turnover, times 5.8 6.9 5.2 20.4% -25.3%
Accounts payable turnover, times 5.5 6.1 7.2 10.2% 19.0%
Level of overdue accounts payable (%) 7.4 5.9 5.6 -19.7 -5.3
Return on assets (%) -2.10 0.99 0.13    
Return on capital (%) -2.95 1.49 0.22    
Current liquidity ratio 1.22 1.20 1.47 -2.3% 23.2%
Quick liquidity ratio 1.07 1.03 1.27 -4.0% 22.7%
Absolute liquidity ratio 0.20 0.25 0.13 24.1% -47.2%
Equity to assets ratio (financial independence ratio) 0.70 0.66 0.60 -5.4% -9.5%
Equity to debt ratio 2.38 1.99 1.49 -16.2% -25.3%

Net assets cost has increased by RUB 465 million for the three-year period.

During the period of 2010-2011 the net assets cost increased by RUB 407 million, or 1.5%. In 2012 net assets cost is characterized by small positive dynamics of 0.2%.

The following factors had an effect on the change in the cost of net assets in 2012:

  • increase in the residual value of fixed assets by RUB 3,647 million (11%);
  • increase in accounts receivable by RUB 1,569 million and decrease in cash by RUB 828 million;
  • increase in long-term liabilities by RUB 4,985 million, including due to the growth of credits and loans in the amount of RUB 4,482 million;
  • decrease in accounts payable by RUB 769 million;
  • increase in assessment obligations by RUB 206 million.

The assessment liabilities are recognized and formed in accordance with Decree No.167n of the Ministry of Finance of December 1, 2010.

The ratio of net assets to the Company's authorized capital in 2012 was 2.84, which is a criterion of the Company's financial stability.

The ratio of borrowed funds to capital and reserves interprets the condition of the equity structure and shows the dynamics of the Company's dependence on borrowing funds for the purpose of financing of its business activities. This indicator for the three-year period in question shows a steady tendency towards increase, which illustrates the Company's dependence on external and borrowed financing sources.

Increase in borrowed funds from 2010 to 2012 was largely due to the sufficient growth of long-term credits and loans with the more or less unchanged equity level. Long-term loan indebtedness as of December 31, 2010 was RUB 4,373 million and as of December 31, 2012 it increased to RUB 10,629 million. Along with the above factors, the indicator was affected by the growth of evaluation liabilities.

As of the end of 2012 loans and credits are by 100% represented by long-term credits of banks. As for keeping and increase of the company's financial stability, long-term liabilities expand Company's economic possibilities and are less risky for it than short-term liabilities.

The ratio of long-term indebtedness to the sum of long-term indebtedness and equity characterizes the degree of financing of the Company's activities performed through attraction of long-term loans. Based on the results of 2012 41% of total capital invested in the Company's assets were represented by long-term borrowed funds.

The switch of JSC IDGC of the North-West to RAB-regulation of tariffs resulted in the change in the structure of financing of investment activities and, hence, inclusion of long-term debt capital in the financing sources of the Company's investment program.

The degree of cover of debts by current income illustrates the Company's possibility to repay its current liabilities with its own income (cash is not taken into account here because, formally, it is a priori considered as referred to repayment of short-term liabilities). The less the ratio of cover of current indebtedness is, the more liquid the company is deemed to be because current liabilities should be covered by current income. During the period of 2010-2012 the indicator improved and the amount of own operating expenses which may be referred to repayment of short-term liabilities increased. During the period from 2010 to 2012 the Company's own income increased by 1,827 million, which was associated with the tendency of amortization increase together with increase in revenues from main types of activity. At the same time, minor changes in current payments compared to the previous periods, the total growth amounted RUB 326 million: in 2010-2011 — RUB 127 million, in 2011-2012 — RUB 199 million, which is considerably lower than the dynamics of increase in current income sufficient to cover short-term liabilities.

Analyzing the liquidity indicators it can be concluded that they increased. Such dynamics were favorably affected by attraction by JSC IDGC of the North-West of long-term credits and by the growth of accounts receivable. However, despite a positive tendency in increase of the current liquidity, the absolute liquidity ratio decreased during the period of 2010-2012, which resulted from the decrease in cash funds of the Company and, hence, their redistribution into accounts receivable, which is evidenced by its considerable growth during the last period. When calculating liquidity indicators deferred income is excluded from current liabilities, which in fact are not liabilities payable.

All measures of financial management taken in 2012 allow for maintaining the liquidity indicators on a sufficiently high level.

During the period in question, the ratio of equity autonomy has a tendency to an insignificant lowering, meaning an increase of dependence on external financing sources. The financial dependence ratio shows a relative weight of own sources in the company's capital. Based on the results of the three-year period, the share of the Company's assets formed by means of equity decreased from 70% to 60%. But, despite such lowering, the amount of such ratio remains higher than the normative one (over 0.6) and demonstrates that the Company is quite stable in financial terms.

The equity to debt ratio characterizes the share of borrowed capital in the structure of own funds and sources of their formation. For example, based on the results of 2012 for every ruble of borrowed capital there were 1.49 rubles of own funds, which shows quite a low relative weight of debt capital. The indicator values are above the normative level, the values of which should not be lower than 0.5-1. The lowering of the ratio during the period in question shows the reduction of the debt ratio level.

Based on the calculated ratios, it may be concluded that JSC IDGC of the North-West has a sufficient payment capacity, i.e. is able to repay its payment liabilities in due time with cash resources and has a stable financial structure of own funds.

Credit portfolio, RUB million

Indicator 2010 2011 2012 Change for 2011 Change for 2012
Total credits and loans, RUB million 4,651 6,228 10,648 1,577 4,420
long-term 4,373 6,148 10,629 1,775 4,481
short-term 279 80 19 -199 - 61
Bank Bank share in the Management Project Contract, % Indebtedness, RUB million
JSC Bank VTB 18 1,915
Sberbank of Russia 42 4,473
ALPHA-BANK 17 1,856
Svyaz-Bank 1 132
Gazprombank 6 600
JCB RUSSIA 16 1,672
Total 100 10,648

Structure of the credit portfolio as of December 31, 2012

Sberbank of Russia holds the largest share in the Company's credit portfolio — 42%, Bank VTB also has a significant share of 18%, Alpha-Bank — 17% and JCB Russia — 16%.

During 2010-2011 the Company diversified the credit portfolio by credit products, banks, and borrowing periods and gradually reduced the volume of short-term loans and credits, having oriented itself on long-term borrowing funds. In 2012 the Company maintained the policy of credit portfolio management aimed at raising long-term credits.

Dynamics of average weighted rate of JSC IDGC of the North-West compared to the dynamics of the refinancing rate of the Central Bank of the RF

Refinancing rate of the Central Bank of the RF Average weighted rate on loans raised by IDGC of the North-West Refinancing rate of the Central Bank of the RF Average weighted rate on loans raised by IDGC of the North-West Refinancing rate of the Central Bank of the RF Average weighted rate on loans raised by IDGC of the North-West
2010 2011 2012
from 9.0 to 7.75% 7.81 % from 9.0 to 7.75% 7.27 % from 8.0 to 8.25% 9.53 %

Debt capital (long-term and short-term credits and loans) in 2012 was RUB 10,648 million, which is RUB 4,420 million more than in 2011.

During the period of 2009-2010 volumes of credit resources remained at the same level. In 2011 borrowed capital grew by 34%, in 2012 — by 71%, which was due to a range of reasons.

Based on the results of the tariff campaign for 2011 in accordance with the Resolution No.1172 of the Government of the RF of December 27, 2010 a necessity to find additional financial resources to cover the deficit of revenues arose.

The switch to RAB-regulation of Vologdaenergo, Novgorodenergo and Pskovenergo branches of IDGC of the North-West resulted in additional attraction of investment loans.

In 2012 the cost of debt capital increased. The average interest rate on raised loans in 2010 was 7.81% per annum, in 2011 — 7.27% per annum and in 2012 — 9.53% per annum.