EL5-Energo: revenue up 42% but EBITDA down 69.5% – growth paid for with margin

On 10 November EL5-Energo released unaudited results for the third quarter of 2026. Revenue rose 42.0% year on year to RUB 28,456.6 mn, but EBITDA fell 69.5% to RUB 1,292.8 mn and net profit was a loss of RUB 1,776.7 mn against a profit a year earlier. The EBITDA margin compressed from 21.1% to 4.5%, and revenue growth did not convert into profit. Our conclusion: rather unattractive – the 34% discount to its own EV/EBITDA history (2.8 vs 4.2) does not offset the margin collapse and the absence of dividends. Our view: the share is rather unattractive at the current price; no portal model for this share; EV/EBITDA 2.8 against a 3-year average of 4.2, a 34% discount to its history.

Our view: is there upside

Our view in numbers

Key takeaways

— Revenue rose 42.0% year on year, but growth decelerated from 84.9% in the second quarter

— EBITDA fell 69.5% and the margin compressed from 21.1% to 4.5% – growth was paid for with profitability

— A net loss of RUB 1,776.7 mn with an operating loss of RUB 1,031.9 mn – interest costs finish the result

— Net debt rose from RUB 29.3 bn on 30 June to RUB 32.9 bn on 30 September, at 1.86x LTM EBITDA

— No dividends were paid over the last 12 months; our estimate of the annual dividend is RUB 0.0 per share

— EV/EBITDA of 2.8 versus a three-year average of 4.2 – a 34% discount, but P/E LTM of 3.5 does not offset the reported-quarter loss

Key figures, RUB bn

Revenue rose 42.0% year on year, but growth decelerated from 84.9% in the second quarter

Revenue for the third quarter of 2026 was RUB 28,456.6 mn, up 42.0% year on year. That is notable growth, but it is slower than in the second quarter, when revenue added 84.9% year on year. The deceleration reflects the lower comparison base in the second quarter, while in the third quarter growth was built on an already higher prior-year revenue.

The nine-month report shows revenue growing across all segments: electricity brought in RUB 52,549.9 mn versus RUB 37,585.3 mn a year earlier, capacity RUB 23,809.5 mn versus RUB 16,307.0 mn, and heat and other RUB 8,814.1 mn versus RUB 3,907.6 mn. Revenue growth was accompanied by even faster growth in fuel costs – RUB 48,591.9 mn versus RUB 32,316.3 mn over nine months – which determined the pressure on profit.

For an investor, what matters is not revenue growth itself but that it does not translate into profit. The company is scaling up, but each additional unit of revenue costs more in terms of expenses. This is visible in the bottom line: with revenue up 42.0%, EBITDA fell 69.5%.

EBITDA fell 69.5% and the margin compressed from 21.1% to 4.5% – growth was paid for with profitability

EBITDA for the third quarter of 2026 was RUB 1,292.8 mn versus RUB 4,237.0 mn a year earlier, a decline of 69.5%. The EBITDA margin compressed from 21.1% to 4.5%. This is the key negative fact of the report: the company is growing revenue, but almost all of it goes into costs.

The main pressure came from fuel costs, which over nine months rose to RUB 48,591.9 mn from RUB 32,316.3 mn. Employee benefits also rose noticeably – RUB 7,948.6 mn versus RUB 3,780.8 mn, overheads – RUB 2,203.1 mn versus RUB 512.3 mn, and other expenses – RUB 2,553.7 mn versus RUB 465.5 mn. These items grew faster than revenue, which led to the margin compression.

The operating loss in the third quarter was RUB 1,031.9 mn versus operating profit of RUB 1,912.3 mn a year earlier. This means the company is already loss-making at the operating level, and EBITDA remains positive only thanks to depreciation, which is not a cash expense. For a shareholder, this signals that the business is losing efficiency.

A net loss of RUB 1,776.7 mn with an operating loss of RUB 1,031.9 mn – interest costs finish the result

The net loss for the third quarter of 2026 was RUB 1,776.7 mn versus a profit of RUB 645.5 mn a year earlier. In addition to the operating loss of RUB 1,031.9 mn, the result is pressured by finance costs. Over nine months, net interest expense was RUB 3,431.2 mn versus RUB 3,102.1 mn a year earlier, and total finance costs were RUB 4,319.1 mn.

Finance costs are rising along with debt. Net debt at 30 September 2026 was RUB 32.9 bn versus RUB 29.3 bn at 30 June 2026. Rising debt increases the interest burden, which becomes especially onerous given the operating loss. The net debt to LTM EBITDA ratio is 1.86, still below critical levels, but if current dynamics persist, EBITDA coverage could deteriorate.

For an investor, it is important that the loss is not one-off but is generated by operations and interest. Unlike one-off write-offs, such a loss may recur if the cost structure or the cost of debt does not change.

Net debt rose from RUB 29.3 bn on 30 June to RUB 32.9 bn on 30 September, at 1.86x LTM EBITDA

Net debt at 30 September 2026 was RUB 32.9 bn versus RUB 29.3 bn at 30 June 2026, an increase of RUB 3.6 bn. Over the year, from 30 September 2025, net debt rose from RUB 19.0 bn to RUB 32.9 bn, i.e. by RUB 13.8 bn. Such debt growth against falling EBITDA increases risk for creditors and shareholders.

The net debt to LTM EBITDA ratio is 1.86. This is a moderate level, but it is calculated on LTM EBITDA, which includes strong previous quarters. If the current weak EBITDA persists, the ratio will rise. Importantly, the FACTS do not contain an earlier value of this ratio, so we cannot state that leverage rose or fell – only note the current level.

Net interest expense over nine months was RUB 3,431.2 mn. At the current cost of debt and its growing volume, the interest burden will remain significant. For a company with an operating loss, this creates additional pressure on net profit.

No dividends were paid over the last 12 months; our estimate of the annual dividend is RUB 0.0 per share

Over the last 12 months EL5-Energo paid no dividends: the payment per share was RUB 0.0, and the trailing dividend yield is 0.0%. Our model estimates the annual dividend at RUB 0.0 per share as well, giving a forward yield of 0.0% at a price of RUB 0.3808. We consider a fair yield for this name to be 12.0%.

Historically, the company paid dividends: RUB 0.1449 per share in 2018, RUB 0.1415 in 2019, and RUB 0.085 in 2020. However, payments have stopped in recent years. Our zero-dividend estimate is based on the dividend-potential model, where the payout parameter is 1.0 of profit, but the profit base of RUB 6,736.0 mn does not generate sufficient free cash flow for payments given the current debt level and capital expenditure.

For a shareholder, this means the investment case is not supported by dividends. With the key rate at 14.0% and a fair yield of 12.0%, the absence of payments makes the stock unattractive for income investors. Dividends could return only with a recovery in profit and a reduction in debt burden, but the current report offers no prerequisites for this.

EV/EBITDA of 2.8 versus a three-year average of 4.2 – a 34% discount, but P/E LTM of 3.5 does not offset the reported-quarter loss

On the LTM EV/EBITDA multiple, the company trades at 2.8 versus a three-year average of 4.2, i.e. at a 34% discount. Formally, this means the stock is cheaper than usual and the market is already pricing in weak results. However, a discount is not a sufficient argument to buy if profit is falling.

P/E LTM is 3.5, which also looks low. But this metric is based on LTM profit, which includes strong previous quarters. In the reported third quarter, the company posted a net loss, and if current dynamics persist, LTM profit will decline and P/E will rise. Thus, the current low valuation could be a trap.

Comparison with its own history shows that the market has already priced in the deterioration. But for the discount to become an entry point, signs of recovery in margin and profit are needed. The current report contains no such signs: EBITDA is falling, the operating result is negative, and dividends are absent. Therefore, the 34% discount does not compensate for fundamental risks.

Valuation on the latest reported figures

Dividend per share, ₽, and yield at the ex-date

Bottom line

The strong side of the report remains revenue growth of 42.0% year on year, but it does not convert into profit: EBITDA fell 69.5%, the margin compressed to 4.5%, and the net loss was RUB 1,776.7 mn. Rising debt to RUB 32.9 bn and the absence of dividends increase pressure on shareholder value. The 34% EV/EBITDA discount to its own history looks tempting, but it reflects a deterioration in fundamentals rather than undervaluation. Our conclusion: rather unattractive – the 34% discount does not offset the margin collapse and zero dividends. Our view: the share is rather unattractive at the current price; no portal model for this share; EV/EBITDA 2.8 against a 3-year average of 4.2, a 34% discount to its history.