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African utilities

We cover only one African utility company currently – Umeme – which is a Ugandan grid distribution company, with a distribution market share close to 95%, and 20 years’ concession (2005-2025) to distribute electricity in Uganda. The company operates under RAB-type tariff regulation with contracted net return of 20% pa on investments (in $ terms). 70% of the company’s revenues come from industrial and commercial customers, which provides cash flow security. However, many uncertainties damage Umeme’s investment case, we believe. As a result, the performance of Umeme YoY has not been spectacular, as the company’s share price has slid almost 20% YoY (though it is significantly better than the drop in Kenya Power, which is a monopoly distribution grid company in neighbouring Kenya). Some of the uncertainties should have been resolved in 2019, such as approval for modification of its licence for 2019-2025. However, the process currently goes through a public hearing, so we expect some clarification to emerge only early 2019.

Figure 24: Umeme performance
						Kenya Power				Umeme
YoY
YtD
3M
1M
-60.0% -50.0% -40.0% -30.0% -20.0%								-10.0%				0.0%		10.0%		20.0%		30.0%
																		Source: Bloomberg

Even after the significant decline in the share price over the past year, we believe the company is still trading at reasonable multiples, albeit at a 22% discount in terms of 2019E EV/EBITDA to its EV/EBITDA average over the past three years (2016-2018E); it trades at a significant premium vs its Russian peers on this metric (Figure 25).

Figure 25: Umeme multiples

			EV/EBITDA, x					P/E, x
	2016	2017	2018E	2019E	2020E	2016	2017	2018E	2019E	2020E
Umeme	3.9	6.0	3.6	3.5	3.3	3.7	38.7	3.4	3.4	3.0
Russia	2.1	2.8	1.5	1.6	1.3	6.0	5.1	3.3	8.9	4.1
International peers, DM	12.5	11.3	10.9	10.7	10.4	15.1	13.7	14.3	14.0	13.5
International peers, EM	10.3	9.5	10.3	9.9	9.3	18.9	15.1	17.1	15.8	13.9

Source: Company data, Renaissance Capital estimates

However, in our view the multiples do not provide a particularly suitable indication of where Umeme shares should be trading, especially given the nature of its tariff regulation.

The main uncertainties once again should be resolved in 2019, in our view.

▪Continuing uncertainty over the extension of Umeme’s licence beyond 2025. We note that earlier (in 2018) China Electric Power Equipment and Technology Company (CET) promised to invest up to $3bn in grid infrastructure, particularly in smart grid technology (Daily Monitor, 1 July 2018), if Umeme’s distribution systems were transferred to it. Such a move would constitute a significant change in Uganda’s regulatory environment. Although we see Umeme as

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9 January 2019

Utilities

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Utilities

hedged with regard to a potential licence termination, this uncertainty could put pressure on the company’s market value, as it limits the company’s investment programme and subsequent return, as a result. According to Umeme, there have so far been no concrete proposals from Chinese counterparties. Recently (December 18) the Ugandan president Yoweri Museveni directed the Energy

Ministry to start talks on extending Umeme’s concessions, according to Daily

Monitor. We believe that some decision could be taken in 2019 in this regard, which also makes 2019 an important milestone, in our view.

▪A continuing rise in investments is yet to be approved by the regulator, which results in Umeme’s inability to generate a 20% return on the full amount of investments spent. This should be clarified in 2019 as the company could face excessive capacity in the market, resulting in pressure on the regulator to lower tariffs. If we see the level of unapproved capex rising again in 2019, this could be viewed negatively by investors, we believe.

▪There is no clarity on the next set of regulatory targets, which should be approved before the end of 2018. This could be tough for Umeme to reach these targets. As we mentioned, the company is currently going through a public hearing on its new licence. It proposes to reduce grid losses to 14% in 2025. It sees losses to be reduced from the current 16.8% to 15.2% in 2019, 14.6% in 2020, and 14.35% in 2023. We believe the company could reach this target, if they are set by the regulation, though the regulator could try to enforce lower grid losses. We note that the new parameters should be set before 1 of March 2019, as it is the date when the old parameters should stop being applied.

▪There are unclear prospects with regard to Ugandan electricity system development, when demand growth is not enough to utilise the extensive commissioning of new capacity, which could result in growth in average tariffs, return subsidies in the sector and trigger sovereign guarantees. Such development could potentially damage the investment case for Umeme. As the main major projects are likely to come online in 2019 – a 183 MW hydro plant in Isimba, and 600 MW hydro plant in Karuma – the market and regulator behaviour in 2019 could indicate future trends, which could significantly influence

Umeme’s investment case, in our view.

However, the downside risk is contained as the possible lump sum payment in the event of concession termination is above Umeme’s current EV. The company is likely to return to 50%+ payout ratio (from 30%+ which it applied over the past two years), which could also support company’s stock, though we expect dividend yields to reach attractive levels only in 2022/2023.

Thus 2019 could be an important year for Umeme. We believe if the optimistic scenario is realised (the regulator approves achievable licence parameters, and the government extends Umeme’s concession beyond 2025), the stock could react positively. Otherwise we could see a sluggish performance due to uncertainties and low capex spending.

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Figure 26: InterRAO DCF forecast, RUBmn (unless otherwise stated)

	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028
EBIT	131,760	136,252	141,568	148,259	145,387	125,350	128,560	123,304	131,790	134,992	140,174
EBIT, adj	92,873	91,623	92,920	96,982	91,437	68,649	68,955	61,384	67,383	68,053	70,565
Tax	-18,421	-19,786	-20,051	-21,417	-20,776	-16,532	-16,840	-15,555	-17,007	-17,413	-18,209
D&A	20,215	19,553	19,190	19,362	20,049	21,142	22,403	23,652	24,889	26,113	27,324
Change in WC	20,378	434	1,203	1,406	1,692	4,809	1,551	2,390	646	1,420	1,239
Capex	-20,000	-15,000	-20,130	-28,338	-35,520	-41,662	-42,923	-44,172	-45,409	-46,633	-47,844
FCF	95,045	76,823	73,132	67,994	56,883	36,405	33,146	27,698	30,502	31,540	33,075
WACC	17.6%	17.6%	17.6%	17.6%	17.6%	17.6%	17.6%	17.6%	17.6%	17.6%	17.6%
Discount factor	1.00	1.00	0.85	0.72	0.61	0.52	0.44	0.38	0.32	0.27	0.23
DFCF	95045	76823	62183	49160	34969	19030	14732	10468	9802	8618	7684

Source: Renaissance Capital estimates

Figure 27: InterRAO DCF summary, RUBmn (unless otherwise stated)

Terminal growth, %				3.0%
PV (Terminal value)				50,921
PV (Present value)				293,470
EV				344,391
Net debt 2018				(244,158)
Fair value				588,550
Total shares outstanding, mn				73,717
Fair share price, RUB				7.98
Current price, RUB				3.97
Upside potential, %				101%
				Source: Renaissance Capital estimates
Figure 28: InterRAO financials, RUBmn (unless otherwise stated)
Income statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Revenue	741,101	831,987	868,182	917,049	932,528	937,351	973,544	1,014,415
Other income	6,829	8,708	39,120	8,533	11,865	12,482	12,944	13,462
Gross expenses	-727,984	-814,952	-830,042	-869,462	-865,119	-866,034	-900,003	-937,480
EBITDA adjusted	56,322	72,394	96,259	95,471	113,088	111,176	112,110	116,344
EBIT	19,946	25,743	77,260	56,120	79,273	83,800	86,486	90,397
Financial items	-2,948	1,018	-8,712	8,862	12,831	15,131	13,771	16,689
Profit before tax	16,998	26,761	68,548	64,982	92,105	98,931	100,257	107,086
Net Income	9,774	23,822	61,312	54,448	73,684	79,145	80,206	85,669
Number of shares outstanding	84,568	84,568	83,541	84,568	73,717	73,717	73,717	73,717
EPS, RUB/share	0.12	0.28	0.73	0.64	1.00	1.07	1.09	1.16
DPS, RUB/share	0.00	0.00	0.02	0.12	0.13	0.25	0.27	0.27
Payout ratio, %	-1%	5%	8%	20%	25%	35%	35%	35%
Balance sheet	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Current assets	220,362	227,419	224,850	292,755	341,070	404,035	464,212	522,258
Non-current assets	365,136	341,590	359,945	332,301	322,260	313,729	312,102	318,528
Total assets	585,498	569,009	584,795	625,056	663,330	717,764	776,314	840,786
Current liabilities	146,582	140,989	126,648	141,758	163,189	164,269	170,313	177,188
Long-term liabilities	90,667	61,775	37,041	23,889	23,479	23,479	23,479	23,479
Equity	348,249	366,245	421,106	459,409	476,662	530,017	582,522	640,119
Total equity and liabilities	585,498	569,009	584,795	625,056	663,330	717,764	776,314	840,786
Cash flow statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Profit x	16,998	26,761	68,548	64,982	92,105	98,931	100,257	107,086
D&A	21,224	23,609	22,904	21,048	20,215	19,553	19,190	19,362
Others	9,166	14,593	-7,750	-4,727	-17,653	-27,094	-27,388	-31,522
Changes in working capital	12,718	2,519	-2,341	5,868	20,378	434	1,203	1,406
Cash flow from operation	60,106	67,482	81,361	87,171	115,045	91,823	93,262	96,332
Cash flow used for investments	-28,742	-28,334	19,064	-24,798	-1,536	3,881	-2,609	-7,898
Cash flow used for/from financing	2,306	-50,438	-69,912	-16,198	-63,034	-29,083	-30,994	-31,365
Effect of exchange rate changes	2,047	943	-805	-101	0	0	0	0
Cash flow for the year	35,717	-10,347	29,708	46,074	50,474	66,622	59,659	57,069

Source: Company data, Renaissance Capital estimates

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Figure 29: RusHydro DCF forecast, RUBmn (unless otherwise stated)

	2018E	2019E	2020E	2021E	2022E	2023E	2024E	2025E	2026E	2027E	2028E
EBIT	67,694	44,693	43,073	65,048	71,924	77,131	83,997	87,452	92,473	97,514	102,788
EBIT, adj	84,946	71,868	73,728	81,720	88,831	94,186	101,207	104,783	109,987	115,200	120,654
Tax	(13,539)	(8,939)	(8,615)	(13,010)	(14,385)	(15,426)	(16,799)	(17,490)	(18,495)	(19,503)	(20,558)
D&A	25,757	27,905	30,114	30,344	31,097	31,304	31,289	31,275	31,261	31,246	31,232
Changes in WC	(2,634)	2,489	(2,196)	(3,449)	(3,708)	(3,052)	(3,556)	(2,154)	(3,219)	(3,143)	(3,287)
capex	(81,949)	(95,678)	(60,085)	(58,898)	(48,390)	(44,000)	(43,980)	(43,960)	(43,939)	(43,919)	(43,899)
FCF	12,581	(2,355)	32,947	36,707	53,445	63,011	68,162	72,454	75,594	79,881	84,142
WACC	12.9%	12.9%	13.0%	13.3%	13.6%	14.0%	14.4%	14.4%	14.4%	14.4%	14.4%
Discount factor	1.00	1.00	0.88	0.78	0.68	0.59	0.51	0.45	0.39	0.34	0.30
FCFF	12,581	(2,355)	29,145	28,597	36,480	37,318	34,777	32,312	29,467	27,217	25,059

Source: Renaissance Capital estimates

Figure 30: RusHydro DCF summary, RUBmn (unless otherwise stated)

Terminal growth, %				1%
PV (Terminal value)				172,032
PV (Present value)				278,015
EV				450,047
Net debt 2018				120,412
Equity value				329,635
Total shares outstanding, mn				426,289
Target share price, RUB				0.77
Current share price, RUB				0.49
Upside potential, %				59%
				Source: Renaissance Capital estimates
Figure 31: RusHydro financials, RUBmn (unless otherwise stated)
Income statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Revenue	329,560	347,512	374,072	348,119	358,462	357,073	369,932	386,769
Other Income	13,125	22,544	29,672	33,435	33,947	34,848	35,506	36,232
Gross expenses	(308,803)	(335,375)	(356,205)	(333,762)	(324,714)	(347,228)	(362,365)	(357,953)
EBITDA adjusted	74,475	80,796	112,724	103,778	110,703	99,772	103,842	112,064
EBIT	33,882	34,681	47,539	47,792	67,694	44,693	43,073	65,048
Financial items	(1,691)	2,997	7,584	(12,273)	(7,913)	(8,715)	(8,997)	(7,690)
Profit before tax	32,191	37,678	55,123	35,519	59,781	35,978	34,076	57,358
Net Income	24,131	27,159	39,751	22,451	47,825	28,783	27,261	45,886
Number of shares outstanding	386,255	364,469	367,430	426,289	426,289	426,289	426,289	426,289
EPS, RUB/share	0.06	0.07	0.11	0.05	0.11	0.07	0.06	0.11
DPS, RUB/share	0.02	0.04	0.05	0.05	0.03	0.06	0.03	0.03
Payout ratio, %	25%	55%	50%	50%	50%	50%	50%	50%
Balance sheet	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Current assets	149,040	146,428	148,453	155,119	174,865	129,407	119,307	97,704
Non-current assets	734,730	791,709	834,993	873,132	900,564	946,450	951,216	966,856
Total assets	883,770	938,137	983,446	1,028,251	1,075,428	1,075,857	1,070,524	1,064,560
Current liabilities	122,346	137,454	116,656	151,248	138,640	146,909	140,426	125,645
Long-term liabilities	166,273	186,764	215,858	181,439	204,625	191,914	180,195	156,756
Equity	595,151	613,919	650,932	695,564	732,163	737,034	749,903	782,159
Total equity and liabilities	883,770	938,137	983,446	1,028,251	1,075,428	1,075,857	1,070,524	1,064,560
Cash flow statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Profit	32,191	37,678	55,123	35,519	59,781	35,978	34,076	57,358
D&A	21,340	22,477	24,130	25,023	25,757	27,905	30,114	30,344
Others	14,020	3,531	7,514	27,074	13,209	28,694	32,837	12,890
Changes in working capital	(9,625)	6,114	(15,394)	(9,491)	(2,634)	2,489	(2,196)	(3,449)
Cash flow from operation	57,926	69,800	71,373	78,125	96,113	95,066	94,831	97,143
Cash flow used for investments	(60,433)	(48,381)	(24,918)	(60,013)	(74,636)	(92,054)	(57,670)	(57,277)
Cash flow used for/from financing	1,091	(8,584)	(26,837)	(15,064)	720	(42,752)	(45,803)	(62,942)
Effect of exchange rate changes	1,338	796	(289)	(246)	-	-	-	-
Cash flow for the year	(78)	13,631	19,329	2,802	22,197	(39,740)	(8,642)	(23,076)

Source: Company data, Renaissance Capital estimates

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Figure 32: Unipro DCF forecast, RUBmn (unless otherwise stated)

	2018E	2019E	2020E	2021E	2022E	2023E	2024E	2025E	2026E	2027E	2028E
EBIT	20,191	23,810	31,404	30,720	29,395	31,871	33,478	23,220	26,034	28,926	31,953
EBIT adj	20,404	24,049	31,676	30,993	29,670	32,160	33,778	23,498	26,328	29,238	32,281
Tax	(4,038)	(4,762)	(6,281)	(6,144)	(5,879)	(6,374)	(6,696)	(4,644)	(5,207)	(5,785)	(6,391)
D&A	5,941	6,688	7,430	7,528	7,784	8,177	8,571	8,964	9,357	9,751	10,144
Changes in WC	(8)	(451)	(878)	54	111	(306)	(214)	1,041	(341)	(349)	(363)
Capex	(16,000)	(16,688)	(8,755)	(10,973)	(13,084)	(13,477)	(13,871)	(14,264)	(14,657)	(15,051)	(15,444)
FCF	6,299	8,836	23,192	21,457	18,602	20,180	21,568	14,596	15,481	17,803	20,227
WACC	14.1%	14.1%	14.0%	14.0%	13.8%	13.8%	13.8%	13.8%	13.7%	13.7%	13.7%
Discount factor	1.00	1.00	0.88	0.77	0.68	0.60	0.52	0.46	0.41	0.36	0.31
FCFF	6,299	8,836	20,345	16,509	12,606	12,034	11,302	6,721	6,284	6,353	6,370

Source: Renaissance Capital estimates

Figure 33: Unipro DCF summary, RUBmn (unless otherwise stated)

Terminal growth, %			3%
PV (Terminal value)			58,936
PV (Present value)			107,362
EV			166,298
Net debt 2018E			823
Fair equity value			165,475
# shares, mn			63,049
Fair per share price, RUB			2.62
Current share price, RUB			2.60
Upside potential, %			1%
		Source: Bloomberg, Renaissance Capital estimates
Figure 34: Unipro financials, RUBmn (unless otherwise stated)
Income statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Revenue	77,693	76,706	78,032	76,522	75,909	85,240	96,773	97,294
Other income	620	3,057	6,184	21,387	966	1,016	1,054	1,096
Gross operating expenses	(59,292)	(63,048)	(77,497)	(56,721)	(56,684)	(62,446)	(66,423)	(67,670)
EBITDA adjusted	26,665	25,328	28,846	47,681	26,345	30,737	39,106	38,521
EBIT	19,021	16,715	6,718	41,187	20,191	23,810	31,404	30,720
Financial items	1,916	706	502	(221)	148	(252)	(234)	(232)
Profit before tax	20,937	17,421	7,220	40,966	20,339	23,558	31,170	30,488
Net Income	16,885	13,790	5,167	33,606	16,271	18,846	24,936	24,391
Number of shares outstanding	63,049	63,049	63,049	63,049	63,049	63,049	63,049	63,049
EPS, RUB/share	0.27	0.22	0.08	0.53	0.26	0.30	0.40	0.39
DPS, RUB/share	0.38	0.28	0.31	0.22	0.22	0.22	0.30	0.40
Payout ratio, %	165%	103%	143%	271%	42%	86%	100%	100%
Balance sheet	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Current assets	22,203	18,810	10,054	18,557	15,697	16,077	21,182	17,300
Non-current assets	105,497	107,955	99,084	107,462	117,521	127,521	128,846	132,291
Total assets	127,699	126,765	109,139	126,019	133,218	143,598	150,028	149,591
Current liabilities	7,074	8,905	8,578	6,375	11,302	16,836	17,176	17,284
Long-term liabilities	6,631	7,753	6,049	6,097	6,097	6,097	6,097	6,097
Equity	113,994	110,108	94,512	113,547	115,819	120,665	126,755	126,209
Total equity and liabilities	127,699	126,765	109,139	126,019	133,218	143,598	150,028	149,591
Cash flow statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Profit before tax	20,937	17,421	7,220	40,966	20,339	23,558	31,170	30,488
D&A	7,097	7,638	6,646	5,954	5,941	6,688	7,430	7,528
Others	(4,395)	(2,754)	12,728	(10,277)	(4,003)	(4,220)	(5,728)	(5,593)
Changes in working capital	(216)	123	(3,058)	(3,112)	(8)	(451)	(878)	54
Cash flow from operation	23,424	22,428	23,537	33,532	22,269	25,575	31,994	32,477
Cash flow used for investments	(6,519)	(9,569)	(13,095)	(15,812)	(15,727)	(16,400)	(8,419)	(10,605)
Cash flow used for/from financing	(23,866)	(17,558)	(17,556)	(16,373)	(9,125)	(9,540)	(19,416)	(25,536)
Effect of exchange rate changes	2,035	960	(523)	(13)	-	-	-	-
Cash flow for the year	(4,926)	(3,738)	(7,638)	1,334	(2,583)	(366)	4,158	(3,664)

Source: Company data, Renaissance Capital estimates

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Figure 35: Enel Russia DCF forecast, RUBmn (unless otherwise stated)

	2018E	2019E	2020E	2021E	2022E	2023E	2024E	2025E	2026E	2027E	2028E
EBIT	12,132	11,767	11,824	8,777	12,964	12,860	15,956	18,517	21,221	24,048	27,004
EBIT, adj	12,624	12,271	12,344	9,300	13,536	13,437	16,571	19,170	21,915	24,783	27,783
Tax	(2,426)	(2,353)	(2,365)	(1,755)	(2,593)	(2,572)	(3,191)	(3,703)	(4,244)	(4,810)	(5,401)
D&A	3,633	3,795	4,626	5,364	5,641	5,779	6,139	6,693	7,246	7,800	8,354
Change in WC	670	110	(74)	447	(566)	6	(438)	(379)	(392)	(408)	(424)
Capex	(6,000)	(15,864)	(15,353)	(9,387)	(7,652)	(11,009)	(14,185)	(14,739)	(15,292)	(15,846)	(16,400)
FCF	8,500	(2,041)	(822)	3,968	8,365	5,641	4,896	7,042	9,232	11,520	13,912
WACC	12.5%	12.0%	11.8%	11.8%	11.8%	11.8%	11.8%	11.8%	11.8%	11.7%	11.7%
Discount factor	1.00	1.00	0.89	0.80	0.72	0.64	0.57	0.51	0.46	0.41	0.37
Discounted FCF	8,500	(2,041)	(735)	3,176	5,989	3,613	2,806	3,610	4,238	4,737	5,119

Source: Renaissance Capital estimates

Figure 36: Enel Russia DCF summary, RUBmn (unless otherwise stated)

Terminal growth, %				3%
PV (Terminal value)				61,762
PV (Present value)				30,513
EV				92,275
Net debt 2018E				33,336
Fair equity value				58,939
# shares, mn				35,372
Fair per share price, RUB				1.67
Current share price, RUB				1.04
Upside potential, %				60%
			Source: Bloomberg, Renaissance Capital estimates
Figure 37: Enel Russia financials, RUBmn (unless otherwise stated)
Income statement	2014	2015	2016	2017	2018E		2019E	2020E	2021E
Revenue	74,405	70,992	72,211	74,400	73,809		75,597	78,115	78,393
Other income	1,545	1,266	906	490	504		531	550	572
Gross operating expenses	(66,172)	(126,940)	(62,783)	(60,920)	(62,181)		(64,360)	(66,841)	(70,188)
EBITDA adjusted	18,421	11,360	13,909	17,732	16,256		16,066	16,970	14,664
EBIT	9,778	(54,682)	10,334	13,970	12,132		11,767	11,824	8,777
Financial items	(2,716)	(5,806)	(4,836)	(3,037)	(2,758)		(2,078)	(2,914)	(3,492)
Profit before tax	7,063	(60,489)	5,498	10,933	9,374		9,689	8,910	5,285
Net Income	5,582	(48,629)	4,387	8,544	7,499		7,751	7,128	4,228
Number of shares outstanding	35,372	35,372	35,372	35,372	35,372		35,372	35,372	35,372
EPS, RUB/share	0.16	(1.37)	0.12	0.24	0.21		0.22	0.20	0.12
DPS, RUB/share	0.06	0.08	-	0.07	0.14		0.14	0.14	0.13
Payout ratio, %	35%	-6%	0%	55%	60%		65%	65%	65%
Balance sheet	2014	2015	2016	2017	2018E		2019E	2020E	2021E
Current assets	26,808	28,325	16,374	17,468	12,054		12,242	12,910	11,972
Non-current assets	114,559	58,037	60,935	63,522	65,890		77,958	88,686	92,708
Total assets	141,367	86,362	77,308	80,991	77,944		90,201	101,596	104,680
Current liabilities	23,496	20,907	15,454	25,618	23,908		33,288	42,594	46,083
Long-term liabilities	34,154	34,425	26,577	14,063	10,353		10,353	10,353	10,353
Equity	83,717	31,030	35,277	41,310	43,682		46,559	48,649	48,244
Total equity and liabilities	141,367	86,362	77,308	80,991	77,944		90,201	101,596	104,680
Cash flow statement	2014	2015	2016	2017	2018E		2019E	2020E	2021E
Profit before tax	7,063	(60,489)	5,498	10,933	9,374		9,689	8,910	5,285
D&A	6,443	5,758	3,106	3,498	3,633		3,795	4,626	5,364
Others	3,085	66,761	6,618	2,183	1,375		644	1,652	2,957
Changes in working capital	2,381	(4,354)	(2,944)	(2,517)	670		110	(74)	447
Cash flow from operation	18,972	7,677	12,278	14,097	15,051		14,239	15,114	14,054
Cash flow used for investments	(9,899)	(7,207)	(7,599)	(5,808)	(5,628)		(15,728)	(15,162)	(9,180)
Cash flow used for/from financing	(10,133)	2,418	(9,373)	(8,060)	(14,257)		1,911	856	(5,333)
Effect of exchange rate changes	0	0	0	0	0		0	0	0
Cash flow for the year	(1,060)	2,888	(4,694)	228	(4,833)		422	809	(459)

Source: Company data, Renaissance Capital estimates

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Figure 38: OGK-2 DCF forecast, RUBmn (unless otherwise stated)

	2018E	2019E	2020E	2021E	2022E	2023E	2024E	2025E	2026E	2027E	2028E
EBIT	15,429	16,704	15,496	24,495	25,212	18,690	21,683	3,178	4,929	6,763	8,675
EBIT, adj	18,262	18,600	16,959	25,757	26,348	19,815	22,861	4,269	6,072	7,960	9,929
Tax	(3,086)	(3,341)	(3,099)	(4,899)	(5,042)	(3,738)	(4,337)	(636)	(986)	(1,353)	(1,735)
D&A	11,252	11,170	11,089	11,088	11,216	11,456	11,694	11,930	12,164	12,397	12,628
Changes in WC	187	(85)	293	(1,583)	(161)	1,090	(580)	3,185	(372)	(387)	(402)
Capex	(10,070)	(9,996)	(11,079)	(12,929)	(14,662)	(14,877)	(15,090)	(15,301)	(15,511)	(15,719)	(15,926)
FCF	16,546	16,348	12,585	13,721	12,270	8,433	7,900	1,656	582	1,091	1,485
WACC	12.3%	12.4%	12.5%	12.7%	13.0%	13.0%	13.0%	13.0%	13.0%	13.0%	13.1%
Discount factor	1.00	1.00	0.89	0.79	0.69	0.61	0.54	0.48	0.43	0.38	0.33
FCFF	16,546	16,348	12,585	13,721	12,270	8,433	7,900	1,656	582	1,091	1,485

Source: Renaissance Capital estimates

Figure 39: OGK-2 DCF summary, RUBmn (unless otherwise stated)

Terminal growth, %				3%
PV (Terminal value)				13,593
PV (Present value)				76,070
EV				89,663
Net debt 2019E				31,839
Equity value				57,825
Total shares outstanding, mn				110,441
Target share price				0.52
Current share price				0.32
Upside potential, %				62%
			Source: Bloomberg, Renaissance Capital estimates
Figure 40: OGK-2 financials, RUBmn (unless otherwise stated)
Income statement	2014	2015	2016	2017	2018E		2019E	2020E	2021E
Revenue	115,935	112,233	134,398	141,308	143,565		152,914	153,386	165,469
Other income	126	218	(480)	(495)	0		0	0	0
Gross expenses	(116,783)	(108,533)	(124,529)	(125,261)	(128,136)		(136,209)	(137,889)	(140,974)
EBITDA adjusted	14,148	11,752	21,711	29,562	28,850		29,770	28,047	36,845
EBIT	(722)	3,918	9,389	15,551	15,429		16,704	15,496	24,495
Financial items	66	(537)	(4,422)	(5,404)	(4,474)		(2,879)	(1,877)	(710)
Profit before tax	(655)	3,382	4,967	10,148	10,955		13,826	13,619	23,785
Net Income	(1,569)	2,597	3,053	7,201	8,764		11,061	10,895	19,028
Number of shares outstanding	110,441	110,441	110,441	110,441	110,441		110,441	110,441	110,441
EPS, RUB/share	(0.01)	0.02	0.03	0.07	0.08		0.10	0.10	0.17
DPS, RUB/share	-	0.01	0.01	0.01	0.02		0.02	0.03	0.02
Payout ratio, %	0%	n/a	23%	28%	25%		25%	25%	25%
Balance sheet	2014	2015	2016	2017	2018E		2019E	2020E	2021E
Current assets	35,478	34,896	29,564	29,808	29,200		30,786	29,301	34,285
Non-current assets	162,992	180,481	186,844	186,783	185,601		184,427	184,417	186,258
Total assets	198,470	215,377	216,408	216,592	214,800		215,213	213,719	220,543
Current liabilities	26,144	49,651	49,694	21,505	21,857		23,157	23,290	23,567
Long-term liabilities	55,777	50,525	51,923	74,075	64,966		55,210	45,453	35,696
Equity	116,549	115,201	114,791	121,013	127,976		136,846	144,976	161,280
Total equity and liabilities	198,470	215,377	216,408	216,592	214,800		215,213	213,719	220,543
Cash flow statement	2014	2015	2016	2017	2018E		2019E	2020E	2021E
Profit before tax	(655)	3,382	4,967	10,148	10,955		13,826	13,619	23,785
D&A	5,209	6,193	9,534	11,265	11,252		11,170	11,089	11,088
Others	9,785	2,659	8,347	8,851	5,116		2,009	616	(2,785)
Changes in working capital	(1,592)	(2,834)	1,417	(5,524)	187		(85)	293	(1,583)
Cash flow from operation	12,746	9,400	24,266	24,741	27,510		26,920	25,617	30,504
Cash flow used for investments	(17,524)	(25,915)	(14,064)	(9,788)	(9,236)		(8,943)	(9,898)	(11,454)
Cash flow used for/from financing	12,221	10,784	(13,097)	(14,323)	(17,108)		(16,123)	(15,823)	(14,908)
Effect of exchange rate changes	0	0	(110)	(28)	0		0	0	0
Cash flow for the year	7,443	(5,732)	(3,006)	602	1,166		1,854	(105)	4,142

Source: Company data, Renaissance Capital estimates

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Figure 41: Mosenergo DCF forecast, RUBmn (unless otherwise stated)

	2018E	2019E	2020E	2021E	2022E	2023E	2024E	2025E	2026E	2027E	2028E
EBIT	18,181	12,280	16,308	16,189	20,731	23,426	20,560	19,884	22,675	25,579	28,600
EBIT, adj	21,018	15,093	19,237	19,152	23,845	26,669	23,851	23,268	26,217	29,285	32,476
Tax	(3,636)	(2,456)	(3,262)	(3,238)	(4,146)	(4,685)	(4,112)	(3,977)	(4,535)	(5,116)	(5,720)
D&A	15,569	15,569	15,569	15,716	16,097	16,684	17,272	17,859	18,446	19,033	19,620
Changes in WC	1,545	788	(2,397)	(662)	(3,107)	(2,595)	(763)	(1,734)	(3,156)	(3,269)	(3,386)
Capex	(15,569)	(15,569)	(17,519)	(20,786)	(23,897)	(24,484)	(25,072)	(25,659)	(26,246)	(26,833)	(27,420)
FCF	18,928	13,425	11,629	10,182	8,792	11,589	11,176	9,757	10,726	13,101	15,570
WACC	15.9%	15.7%	15.9%	15.9%	15.9%	15.7%	15.7%	15.7%	15.7%	15.7%	15.7%
Discount factor	1.00	1.00	0.86	0.74	0.64	0.56	0.48	0.42	0.36	0.31	0.27
FCFF	18,928	13,425	10,030	7,574	5,640	6,463	5,386	4,064	3,874	4,091	4,204

Source: Renaissance Capital estimates

Figure 42: Mosenergo DCF summary, RUBmn (unless otherwise stated)

Terminal growth, %			3%
PV (Terminal value)			33,450
PV (Present value)			64,751
EV			98,201
Net debt 2018E			(24,452)
Equity value			122,654
Total shares outstanding, mn			39,749
Target share price, RUB			3.09
Current share price, RUB			2.06
Upside potential, %			50%
			Source: Bloomberg, Renaissance Capital estimates
Figure 43: Mosenergo financials, RUBmn (unless otherwise stated)
Income statement	2014	2015	2016	2017	2018E		2019E	2020E	2021E
Revenue	161,432	171,163	190,656	196,056	192,280		190,646	198,503	200,815
Other Income	2,753	0	0	0	0		0	0	0
Gross operating expenses	-162,614	-173,078	-175,020	-168,700	-174,099		-178,366	-182,196	-184,626
EBITDA adjusted	26,060	28,693	35,466	45,366	36,587		30,662	34,806	34,868
EBIT	1,571	-1,915	15,636	27,356	18,181		12,280	16,308	16,189
Financial items	-4,875	-482	4,813	902	2,616		3,580	3,042	1,895
Profit before tax	-3,304	-2,397	20,449	28,258	20,797		15,861	19,350	18,084
Net Income	-3,067	-1,778	13,438	22,948	16,638		12,688	15,480	14,467
average number of shares outstanding	39,749	39,749	39,749	39,749	39,749		39,749	39,749	39,749
EPS, RUB/share	-0.077	-0.045	0.338	0.577	0.419		0.319	0.389	0.364
DPS, RUB/share	0.010	0.056	0.085	0.084	0.144		0.105	0.080	0.097
Payout ratio, %	5%	n/a	n/a	25%	25%		25%	25%	25%
Balance sheet	2014	2015	2016	2017	2018E		2019E	2020E	2021E
Current assets	62,047	65,654	83,818	87,254	93,562		92,336	95,907	101,540
Non-current assets	286,151	264,753	257,456	247,593	247,593		247,593	249,543	254,613
Total assets	348,198	330,407	341,274	334,847	341,155		339,929	345,450	356,153
Current liabilities	22,840	19,724	45,360	29,152	26,428		20,500	16,393	16,498
Long-term liabilities	83,663	78,814	50,481	39,343	37,474		33,647	30,968	30,968
Equity	241,695	231,869	245,433	266,352	277,253		285,782	298,089	308,686
Total equity and liabilities	348,198	330,407	341,274	334,847	341,155		339,929	345,450	356,153
Cash flow statement	2014	2015	2016	2017	2018E		2019E	2020E	2021E
Profit before tax	-3,304	-2,397	20,449	28,258	20,797		15,861	19,350	18,084
D&A	15,508	18,585	15,067	15,117	15,569		15,569	15,569	15,716
Others	9,813	12,630	619	-2,900	-3,938		-3,939	-3,983	-2,548
Changes in working capital	-8,373	-6,907	-4,445	1,592	1,545		788	-2,397	-662
Cash flow from operation	13,644	21,911	31,690	42,067	33,973		28,278	28,539	30,589
Cash flow used for investments	-22,421	-25,015	-23,668	-6,580	-10,403		-10,755	-14,009	-18,738
Cash flow used for/from financing	15,738	-921	-3,581	-24,921	-13,170		-15,393	-10,640	-4,023
Effect of exchange rate changes	-155	14	-10	-36	0		0	0	0
Cash flow for the year	6,806	-4,011	4,431	10,530	10,399		2,130	3,890	7,828

Source: Company data, Renaissance Capital estimates

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Figure 44: TGK-1 DCF forecast, RUBmn (unless otherwise stated)

	2018E	2019E	2020E	2021E	2022E	2023E	2024E	2025E	2026E	2027E	2028E
EBIT	13,426	12,662	13,728	8,698	8,611	5,068	6,413	7,334	7,271	8,000	8,756
EBIT, adj	14,292	13,893	15,285	10,207	10,164	6,608	8,023	9,011	9,005	9,805	10,634
Tax	(2,685)	(2,532)	(2,746)	(1,740)	(1,722)	(1,014)	(1,283)	(1,467)	(1,454)	(1,600)	(1,751)
D&A	8,448	8,491	8,491	8,513	8,569	8,657	8,744	8,831	8,919	9,006	9,093
Changes in WC	(345)	(110)	(531)	914	(290)	508	(636)	(565)	(374)	(569)	(590)
Capex	(9,068)	(8,491)	(8,806)	(9,332)	(9,829)	(9,917)	(10,004)	(10,091)	(10,179)	(10,266)	(10,353)
FCF	10,642	11,251	11,694	8,563	6,891	4,842	4,844	5,719	5,916	6,376	7,033
WACC	15.5%	16.6%	17.3%	17.3%	17.3%	17.3%	17.3%	17.3%	17.3%	17.3%	17.3%
Discount factor	1.00	1.00	0.85	0.73	0.62	0.53	0.45	0.38	0.33	0.28	0.24
FCFF	10,642	11,251	9,969	6,222	4,269	2,557	2,181	2,195	1,935	1,778	1,672

Source: Renaissance Capital estimates

Figure 45: TGK-1 DCF summary, RUBmn (unless otherwise stated)

Terminal growth, %			3%
PV (Terminal value)			10,928
PV(Present value)			44,029
EV			54,957
Net debt 2018			3,484
Equity value			51,473
Total shares outstanding, mn			3,854,341
Target share price, RUB			0.0134
Current share price, RUB			0.0083
Upside potential, %			61%
			Source: Bloomberg, Renaissance Capital estimates
Figure 46: TGK-1 financials, RUBmn (unless otherwise stated)
Income statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Revenue	68,996	69,424	78,891	87,395	90,787	92,124	95,578	92,654
Other Income	1,114	1,395	825	599	543	571	593	616
Gross expenses	-63,614	-60,802	-71,115	-76,007	-77,905	-80,033	-82,442	-84,572
EBITDA adjusted	16,977	17,764	20,851	22,736	22,740	22,384	23,776	18,720
EBIT	6,496	10,017	8,601	11,986	13,426	12,662	13,728	8,698
Financial items	-2,625	-2,554	-2,134	-1,466	-881	-378	240	788
Profit before tax	3,871	7,463	6,466	10,520	12,545	12,284	13,968	9,486
Net Income	4,149	5,826	5,324	7,927	10,036	9,827	11,175	7,589
Number of shares outstanding	3,854,341	3,854,341	3,854,341	3,854,341	3,854,341	3,854,341	3,854,341	3,854,341
EPS, RUB/share	0.0011	0.0015	0.0014	0.0021	0.0026	0.0025	0.0029	0.0020
DPS, RUB/share	0.0002	0.0002	0.0002	0.0003	0.0005	0.0007	0.0006	0.0007
Payout ratio, %	10%	21%	16%	25%	24%	25%	25%	25%
Balance sheet	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Current assets	20,160	19,872	24,321	26,944	24,895	22,407	26,351	30,578
Non-current assets	130,170	135,022	135,450	136,845	137,465	137,465	137,780	138,599
Total assets	150,330	154,895	159,771	163,789	162,360	159,872	164,131	169,178
Current liabilities	17,161	20,588	20,773	18,698	15,739	12,550	11,208	11,460
Long-term liabilities	32,452	28,777	29,014	28,630	22,013	15,395	12,279	12,279
Equity	100,717	105,529	109,984	116,460	124,608	131,927	140,644	145,439
Total equity and liabilities	150,330	154,895	159,771	163,789	162,360	159,872	164,131	169,178
Cash flow statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Profit before tax	3,871	7,463	6,466	10,520	12,545	12,284	13,968	9,486
D&A	6,713	7,205	7,684	8,454	8,448	8,491	8,491	8,513
Others	3,283	-1,174	2,609	653	-762	-848	-1,477	-1,176
Changes in working capital	(2,191)	(3,230)	(2,597)	(2,418)	(345)	(110)	(531)	914
Cash flow from operation	11,677	10,265	14,162	17,209	19,886	19,817	20,452	17,736
Cash flow used for investments	(5,738)	(9,620)	(8,949)	(9,968)	(8,652)	(8,197)	(8,403)	(8,544)
Cash flow used for/from financing	(3,948)	(1,201)	(3,386)	(3,752)	(13,184)	(13,181)	(7,330)	(2,794)
Effect of exchange rate changes	32	(8)	(173)	132	0	0	0	0
Cash flow for the year	2,022	(564)	1,654	3,621	(1,951)	(1,561)	4,719	6,399

Source: Company data, Renaissance Capital estimates

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Figure 47: FGC DCF forecast, RUBmn (unless otherwise stated)

	2018E	2019E	2020E	2021E	2022E	2023E	2024E	2025E	2026E	2027E	2028E
EBIT	85,641	85,964	81,879	84,399	87,046	89,791	92,901	96,111	99,500	103,843	108,335
EBIT adj	98,736	99,351	94,482	97,355	100,728	104,231	107,775	111,432	115,205	119,864	124,681
Tax	(17,128)	(17,193)	(16,376)	(16,880)	(17,409)	(17,958)	(18,580)	(19,222)	(19,900)	(20,769)	(21,667)
D&A	46,845	49,424	51,891	53,609	55,184	56,786	58,414	60,088	61,811	62,857	63,920
Change in WC	2,278	474	2,098	20	(24)	(10)	30	49	70	68	91
Capex	(101,311)	(102,576)	(91,567)	(91,136)	(93,813)	(96,536)	(99,303)	(102,150)	(92,716)	(94,285)	(95,881)
FCF	29,420	29,479	40,528	42,969	44,666	46,513	48,336	50,197	64,469	67,736	71,145
WACC	11%	13%	14%	14%	14%	14%	14%	14%	14%	14%	14%
Discount factor	1.00	1.00	0.88	0.77	0.67	0.59	0.51	0.45	0.39	0.34	0.30
DFCF	29,420	29,479	35,674	33,147	29,926	27,270	24,797	22,534	25,324	23,283	21,398

Source: Renaissance Capital estimates

Figure 48: FGC DCF summary, RUBmn (unless otherwise stated)

Terminal growth				1%
PV (Terminal value)				147,989
PV (Present value)				272,832
EV				420,821
Net debt 2018				169,181
Fair value				251,640
Total shares outstanding, mn				1,274,665
Fair share price, RUB				0.20
Current share price, RUB				0.15
Upside potential, %				32%
			Source: Bloomberg, Renaissance Capital estimates
Figure 49: FGC financials, RUBmn (unless otherwise stated)
Income statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Revenue	175,968	187,041	255,603	242,186	258,341	267,722	270,390	280,427
Other income	5,618	4,001	6,039	6,405	6,597	6,940	7,197	7,485
Gross expenses	(196,912)	(133,813)	(181,795)	(165,570)	(179,296)	(188,698)	(195,708)	(203,514)
EBITDA adjusted	107,743	104,423	116,712	126,447	125,600	128,067	132,226	136,252
EBIT	(15,326)	57,229	79,847	83,021	85,641	85,964	81,879	84,399
Financial items	(7,187)	(942)	(1,036)	8,086	15,420	15,105	16,942	21,059
Profit before tax	(22,513)	56,287	78,811	91,107	100,716	101,069	98,821	105,458
Net Income	(20,601)	44,098	68,709	72,622	80,573	80,855	79,057	84,366
Number of shares outstanding	1,274,665	1,274,665	1,274,665	1,274,665	1,274,665	1,274,665	1,274,665	1,274,665
EPS, RUB/share	(0.02)	0.03	0.05	0.06	0.06	0.06	0.06	0.07
DPS, RUB/share	0.001	0.001	0.013	0.015	0.015	0.016	0.016	0.016
Payout ratio, %	-6%	2%	38%	28%	27%	25%	25%	25%
Balance sheet	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Current assets	110,821	125,261	118,386	104,201	145,087	147,300	159,914	180,942
Non-current assets	824,354	870,067	978,724	1,079,624	1,098,753	1,140,500	1,169,573	1,196,218
Total assets	935,175	995,328	1,097,110	1,183,825	1,243,840	1,287,799	1,329,487	1,377,160
Current liabilities	119,113	102,563	99,428	88,718	96,579	98,112	99,172	100,456
Long-term liabilities	242,831	273,127	269,265	293,339	284,274	266,145	248,016	229,887
Equity	573,231	619,638	728,417	801,768	862,987	923,542	982,299	1,046,817
Total equity and liabilities	935,175	995,328	1,097,110	1,183,825	1,243,840	1,287,799	1,329,487	1,377,160
Cash flow statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Profit before tax	(22,513)	56,287	78,811	91,107	100,716	101,069	98,821	105,458
D&A	43,365	39,447	39,397	44,752	46,845	49,424	51,891	53,609
Others	84,121	15,961	28,602	(14,641)	(26,810)	(29,072)	(30,643)	(35,134)
Changes in working capital	(11,960)	(13,672)	(35,334)	(451)	2,278	474	2,098	20
Cash flow from operation	93,013	98,023	111,476	120,767	123,029	121,895	122,167	123,953
Cash flow used for investments	(28,059)	(97,242)	(37,958)	(76,536)	(57,395)	(80,331)	(68,085)	(64,137)
Cash flow used for/from financing	(44,513)	(14,673)	(57,290)	(46,100)	(29,354)	(40,300)	(40,300)	(39,848)
Effect of exchange rate changes
Cash flow for the year	20,441	(13,892)	16,228	(1,869)	36,280	1,263	13,781	19,968

Source: Company data, Renaissance Capital estimates

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Utilities

Figure 50: Rosseti DCF forecasts, RUBmn (unless otherwise stated)

	2018E	2019E	2020E	2021E	2022E	2023E	2024E	2025E	2026E	2027E	2028E
EBIT	184,633	165,841	160,778	140,381	161,053	169,565	185,030	184,787	196,702	203,606	228,218
EBIT, adj	216,322	198,720	195,151	172,278	194,444	204,850	222,363	224,024	237,446	245,773	271,989
Tax	(36,927)	(33,168)	(32,156)	(28,076)	(32,211)	(33,913)	(37,006)	(36,957)	(39,340)	(40,721)	(45,644)
D&A	115,715	122,417	134,694	144,900	152,399	159,492	173,744	188,036	202,369	208,059	213,764
Change in WC	(8,961)	6,678	(1,024)	6,332	(9,400)	(3,809)	(9,968)	(2,958)	(7,738)	(1,487)	(9,316)
Capex	(232,542)	(300,975)	(285,297)	(258,536)	(260,904)	(367,910)	(383,658)	(399,451)	(294,623)	(300,910)	(307,215)
FCF	53,607	(6,327)	11,368	36,898	44,328	(41,289)	(34,525)	(27,306)	98,114	110,714	123,580
WACC	9.3%	11.2%	11.2%	11.2%	11.2%	11.2%	11.2%	11.0%	11.0%	11.0%	11.0%
Discount factor	1.00	1.00	0.90	0.81	0.73	0.65	0.59	0.54	0.48	0.43	0.39
DFCF	53,607	(6,327)	10,220	29,821	32,208	(26,970)	(20,317)	(14,613)	47,309	48,101	48,378

Source: Renaissance Capital estimates

Figure 51: Rosseti DCF summary, RUBmn (unless otherwise stated)

Terminal growth			1%
PV (Terminal value)			490,116
PV (Present value)			147,810
EV			637,926
Net debt + Minority interest 2019E			489,365
Fair value			148,561
Total shares outstanding, mn (adj)			202,523
Fair share price, common, RUB			0.73
Current price, common, RUB			0.79
Upside potential, %			-7%
			Source: Bloomberg, Renaissance Capital estimates
Figure 52: Rosseti financials, RUBmn (unless otherwise stated)
Income statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Revenue	759,608	766,812	901,034	948,344	983,324	999,479	1,033,799	1,047,963
Other Income	14,309	22,069	30,747	22,261	22,929	24,121	25,014	26,014
Gross operating expenses	-759,805	-652,538	-788,324	-779,288	-821,620	-857,759	-898,034	-933,596
EBITDA adjusted	240,584	260,560	315,288	320,785	332,037	321,138	329,845	317,178
EBIT	14,112	136,343	143,457	191,317	184,633	165,841	160,778	140,381
Financial items	(32,161)	(22,631)	(23,615)	(13,713)	(16,356)	(17,358)	(20,625)	(20,815)
Profit before tax	(18,049)	113,712	119,842	177,604	168,277	148,483	140,153	119,566
Net Income	(24,257)	81,602	98,341	137,122	134,622	118,786	112,123	95,653
Number of shares outstanding, common	161,079	161,079	161,080	198,828	198,828	198,828	198,828	198,828
Number of shares outstanding, preferred	2,075	2,075	2,075	2,075	2,075	2,075	2,075	2,075
EPS, RUB/share	(0.15)	0.50	0.60	0.68	0.67	0.59	0.56	0.48
DPS common, RUB/share	-	-	-	0.01	0.02	0.02	0.02	0.01
DPS preferred, RUB/share	-	-	-	0.37	0.33	0.32	0.29	0.27
Payout ratio, total%	0%	0%	0%	2%	4%	4%	4%	4%
Payout ratio, preferred%	0%	0%	0%	1%	1%	1%	1%	1%
Balance sheet	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Current assets	287,526	334,613	306,688	293,247	300,477	257,267	234,663	234,227
Non-current assets	1,696,553	1,811,144	1,959,990	2,116,152	2,208,843	2,378,613	2,519,762	2,623,456
Total assets	1,984,079	2,145,757	2,266,678	2,409,399	2,509,320	2,635,880	2,754,426	2,857,682
Current liabilities	382,114	399,720	371,024	330,089	336,216	348,326	358,841	369,936
Long-term liabilities	563,161	577,142	591,015	655,749	619,421	619,421	619,421	619,421
Equity	1,038,804	1,168,895	1,304,639	1,423,561	1,553,683	1,668,133	1,776,164	1,868,325
Total equity and liabilities	1,984,079	2,145,757	2,266,678	2,409,399	2,509,320	2,635,880	2,754,426	2,857,682
Cash flow statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Profit before tax	-18,049	113,712	119,842	177,604	168,277	148,483	140,153	119,566
D&A	125,910	100,529	113,766	109,287	115,715	122,417	134,694	144,900
Others	73,460	-40,365	-18,253	-47,631	-17,243	-9,916	-3,490	-1,658
Changes in working capital	-20,645	-17,188	-39,791	-26,874	-8,961	6,678	-1,024	6,332
Cash flow from operation	160,676	156,688	175,564	212,386	257,788	267,662	270,333	269,140
Cash flow used for investments	-166,290	-174,519	-153,932	-188,840	-217,266	-287,876	-275,465	-248,894
Cash flow used for/from financing	26,273	32,345	-31,752	-8,462	-44,500	-4,336	-4,092	-3,491
Effect of exchange rate changes
Cash flow for the year	20,659	14,514	-10,120	15,084	-3,977	-24,549	-9,224	16,755

Source: Company data, Renaissance Capital estimates

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Figure 51: Umeme financial forecast, UGXmn (unless otherwise stated)

Income statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Revenue	977,664	1,161,008	1,358,206	1,476,430	1,642,482	1,874,530	2,061,411	2,348,786
Other income	11,117	9,064	7,087	8,772	8,772	8,772	8,772	8,772
Gross expenses	(882,234)	(979,431)	(1,124,590)	(1,372,823)	(1,353,098)	(1,569,748)	(1,724,808)	(1,920,692)
EBITDA adjusted	177,668	247,539	308,362	193,448	389,975	413,494	453,994	554,297
EBIT	124,110	214,045	267,423	142,228	327,612	342,700	374,605	466,202
Finance costs	(22,436)	(53,063)	(69,301)	(97,628)	(111,905)	(123,568)	(129,769)	(134,370)
Profit before tax	101,674	160,982	198,122	44,600	215,708	219,132	244,836	331,832
Net Income	70,493	105,857	138,834	13,419	150,995	153,392	171,385	232,283
Number of shares outstanding	1,624	1,624	1,624	1,624	1,624	1,624	1,624	1,624
EPS, UGX/share	43	65	85	8	93	94	106	143
DPS, UGX/share	30	35	19	8	20	47	50	62
Payout ratio, %	64%	65%	25%	16%	30%	50%	50%	50%

Balance sheet	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Current assets	485,474	416,314	475,701	430,880	560,570	639,428	703,120	800,610
Non-current assets	726,465	1,358,555	1,750,352	1,918,553	2,036,142	2,179,541	2,322,595	2,469,723
Total assets	1,211,939	1,774,869	2,226,053	2,349,433	2,596,712	2,818,969	3,025,715	3,270,333
Current liabilities	469,467	410,526	546,184	714,960	708,061	788,002	844,729	908,579
Long-term liabilities	428,760	860,568	1,055,593	1,016,804	1,185,921	1,220,863	1,250,912	1,269,082
Equity	313,712	503,775	624,276	617,669	702,730	810,104	930,074	1,092,672
Total equity and liabilities	1,211,939	1,774,869	2,226,053	2,349,433	2,596,712	2,818,969	3,025,715	3,270,333

Cash flow statement	2014	2015	2016	2017	2018E	2019E	2020E	2021E
Profit before tax	101,674	160,982	198,122	44,600	215,708	219,132	244,836	331,832
D&A	41,371	47,588	61,622	82,668	91,410	99,841	108,436	117,142
Others	12,039	(23,078)	(36,536)	28,933	(64,712)	(65,740)	(73,451)	(99,550)
Changes in working capital	(11,879)	(8,916)	(52,538)	148,531	(186,257)	(11,447)	(17,558)	(37,778)
Cash flow from operation	143,205	176,576	170,670	304,732	56,148	241,787	262,263	311,647
Cash flow used for investments	(268,837)	(280,528)	(317,797)	(236,427)	(229,020)	(243,240)	(251,490)	(264,270)
Cash flow used for/from financing	110,324	102,761	125,938	(65,590)	196,701	3,982	(8,416)	(43,685)
Effect of exchange rate changes	(1,475)	0	0	0	0	0	0	0
Cash flow for the year	(16,783)	(1,191)	(21,189)	2,715	23,830	2,529	2,358	3,692

Source: Company data, Renaissance Capital estimates

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