Download center Data analysys

Address to Shareholders by the Chairman of the Board of Directors

Dear Shareholders,

In the reporting year, activities of the Board of Directors were focused on ensuring interests of shareholders of Kubanenergo PJSC, improving its financial and economic performance, enhancing shareholders’, creditors’ and investors’ confidence in the Company.

In 2016, Kubanenergo PJSC held 32 meetings of the Board of Directors, resolutions on 234 items considered were made. Key issues examined during the meetings were the approval of strategic documents, ensuring of regular control of the Company’s management, and approval of transactions. New items were as follows: issue of additional shares of the Company and the Company’s charity activities.

According to the resolution of the extraordinary General Meeting of Shareholders on increasing the Company’s authorized capital by RUB 5.75 bln, measures were taken to issue the Company’s additional shares, an opportunity for shareholders to exercise their preemptive right when acquiring the shares was given, thus, allowing the Company to raise more than RUB 2 bln in return for the shares placed. The Company’s capitalization for the reporting period increased almost by 1.5.
In order to develop and reinforce control functions, the improvement of the risk management, internal control, and internal audit systems were determined by the Board of Directors as a priority area of the Company. The Board of Directors approved the Plan of Measures Aimed at Development and Improvement of Internal Control and Risk Management Systems of Kubanenergo PJSC for 2016–2018.

Chairman of the Board of Directors Kubanenergo PJSC Yu.N. Mangarov

Implementation of the Plan makes it possible to focus all efforts on improving the efficiency and effectiveness of the Company’s activity, the soundness of assets, the reliability of accounting (financial) and other statements, the compliance with legal requirements and local regulations of the Company, and ultimately contributes to achievement the Company’s goals and objectives.

Company’s share in the regional energy market (of the region’s NGP) in 2016 amounted to 73.9%. Total supply in the region is higher than the level of 2015 and in total amounts to 26.9 bln kWh. Growth of Kubanenergo PJSC NGP share in 2016 is due to increase of Kubanenergo PJSC electric grid facilities, including due to consolidation of TGC electric grid assets.

In 2016, PJSC Kubanenergo continued implementing a number of major investment projects. The Company was focused on the development of the power grid infrastructure on the Black Sea and Azov Sea coasts of the Krasnodar Krai.
High rates of reconstruction and renovation of the Company’s electric grids as well as the dynamic growth of technological connection volumes to the Company’s grid suggest that in the future the Kubanenergo PJSC will retain a dominant position in the regional market for electricity transmission.

In the framework of the agreement signed between Kubanenergo PJSC and the Administration of the Municipal Entity of Krasnodar City at the International Investment Forum Sochi-2016, reconstruction of the largest supply centers and construction of high-voltage power transmission lines and two cable power lines are planned in Krasnodar.

During the reporting period, Kubanenergo PJSC ensured reliable and uninterrupted power supply to the customers. Planned index​of the provided services reliability set by the regulating authorities – Regional Energy Commission – Pricing and Tariff Department of the Krasnodar Krai, were achieved.

Taking into account dynamic development of the Kuban Region the most important area of Kubanenergo PJSC remains timely and accessible technological connection of new customers to the electric grids. In 2016, the Company entered into 30,000 agreements for technological connection with total capacity of 734 MW.

For the reporting period, the electric facilities of such major applicants as LLC IKEA MOS (Trade and Property) (10 MW), PJSC Gazprom Invest (8.7 MW), Nemetskaya Derevnya (5 MW) were connected to the Company’s electric grids.

Under the energy efficiency program, Kubanenergo PJSC continued implementing innovative projects on improvement of the quality of electricity transmission and metering both at the Company’s own expense and by attracting investors.

Kubanenergo PJSC raised private funds in order to develop and improve the energy supply metering. Following the results of energy service agreements performance, the benefit of 2016 amounted to 119.2 mln kWh, including reduction of the losses (66.9 mln kWh) and growth of net electricity supply (52.3 mln kWh).

Main production goals of Kubanenergo PJSC for 2017 is an accident-free passage of the seasons of peak loads, timely receipt of a certificate of readiness or the autumn-winter period, implementation of investment and maintenance programs and minimization of excessive losses. Taking into account increasing demand for electricity and growing loads, it’s no less important to address the issue of increasing accessibility and transparency of grid connections, and the reliability and quality of services provided.

Besides, Kubanenergo PJSC sets a goal of continuous improvement of financial and economic indicators, increase of investment potential, openness and transparency of the activities in order to maximally meet shareholders’ and other concerned parties’ interests.

Chairman of the Board of Directors
Kubanenergo PJSC                                                                                                        Yu.N. Mangarov

 Address to Shareholders by the Chairman of the Board of Directors