“SAMRUK-ENERGY” JSC | Integrated ANNUAL REPORT

MESSAGE OF THE CHAIRMAN OF “SAMRUK-ENERGY” JSC BOARD OF DIRECTORS

“Samruk-Energy” JSC group of companies maintained the dominant share in the electricity market of Kazakhstan in 2018 – 29.7 % of the total generation in  the  country and  produced 31.7 bln. Revenues from the  core business of “Samruk – Energy” JSC group of companies amount to 260.4 bln. tenge

Dear reader!

2018 was marked by an important event for “Samruk-Energy” JSC – the Company approved the new Development Strategy for 2018–2028.

The Strategy is based on current positions of “Samruk-Energy” JSC and takes into consideration the key trends of the external environment and power sector, which influence the Company’s operating conditions.

Over the coming years the Company will put its greatest energies into creating value for shareholders, meeting growing demand through reliable power supplies, high-tech development based on sustainability principles.

“Samruk-Energy” JSC group of companies maintained the dominant share in the electricity market of Kazakhstan in 2018 – 29.7 % of the total generation in the country and produced 31.7 bln. kWh of electricity. The record volume of coal – 44.9 mln. tons was mined at coal mines.

In 2018, along with production figures, “Samruk-Energy” JSC strengthened its financial stability by reducing the consolidated debt burden of 53 bln. tenge during 2018 and increasing EBITDA indicators. This contributed to the improvement of financial leverage. Actions taken enabled the power Holding Company to move out of red zone of financial risk.

Total consolidated revenues of the Company for 2018 amounted to – 268.08 bln. tenge, while revenues from the core business of “Samruk-Energy” JSC group of companies amount to 260.4 bln. tenge.

In 2018 “Samruk-Energy” JSC concluded agreements with Asian Development Bank in the amount equivalent to $ 120 million as part of loan portfolio optimization. The deal officially consolidated a long-term and strong partnership between the largest Kazakhstan energy holding and a reputable international financial institution for development. An Agreement with “Samruk-Energy” JSC is the first and unique experience in the Republic of Kazakhstan for Asian Development Bank, since loans are provided in national currency. The share of international financial institutions in the structure of “Samruk-Energy” JSC loan portfolio is 30 %, which exerts a considerable influence on “Samruk-Energy” JSC Group’s credit rating.

The Company will intensify measures to maintain and strengthen financial sustainability in the medium term. This will allow “Samruk-Energy” JSC to manage its debt in an efficient way and achieve an optimal capital structure.

The Company implemented a number of investment projects in 2018, 1 MW Solar Power Plant and 5 MW Wind Power Plant were commissioned, built in Almaty city and Almaty region under the Agreement between the Governments of Kazakhstan and China, these RES facilities have the potential to generate 18 mln. kWh of green electricity annually.

Today, both “Samruk-Energy” JSC and the country’s power industry are gearing up for the new event – the launch of the common electricity market of the EEU, which involves the establishment of relations system between entities of the wholesale electricity markets of the Union member states on the basis of parallel operating electricity systems linked with capacity sale and purchase. Owing to establishment of the EEU common electricity market, the Republic of Kazakhstan will not only gain a simplified access to the markets of the Union member countries, but also increase the openness of the internal market for external electricity suppliers. This means that new opportunities are emerging for “Samruk-Energy” JSC. I believe that a good experience and practice of the Company’s implemented projects give confidence that all strategic goals will be accomplished.

Beibit Karymsakov