FGC UES: revenue up 16.3%, but EBITDA grows 28.5% — margin recovery

On August 28, 2026, FGC UES reported Q2 2026 results. Revenue grew 16.3% YoY to RUB 455.3 bn, EBITDA rose 28.5% to RUB 157.0 bn, and the EBITDA margin expanded from 31.2% to 34.5%. This review examines what drove the margin expansion, how debt changed, and what it means for shareholders.

Key takeaways

— Q2 revenue grew 16.3% to RUB 455.3 bn, accelerating from Q1

— EBITDA rose 28.5% to RUB 157.0 bn, margin expanded to 34.5% from 31.2% a year earlier

— Quarterly net profit reached RUB 77.7 bn, nearly double last year's RUB 51.7 bn

— Leverage stands at 1.7x EBITDA for the last 12 months, with net debt up RUB 14.8 bn over the year

— H1 capex of RUB 279.2 bn nearly equals operating cash flow before working capital changes

— No dividends paid over the last 12 months; the model estimates the next payout at RUB 0.0 per share

— EV/EBITDA multiple of 1.9x is below its three-year average of 2.3x

Key figures, RUB bn

Q2 revenue grew 16.3% to RUB 455.3 bn, accelerating from Q1

In Q2 2026, FGC UES revenue reached RUB 455.3 bn, up 16.3% year-on-year. This is a slowdown from Q1's 22.0% growth, but still double-digit.

The main driver remains electricity transmission – the segment generated RUB 472.6 bn in the quarter, nearly the entire revenue. Grid connection added RUB 25.5 bn, and electricity and capacity sales RUB 17.5 bn.

EBITDA rose 28.5% to RUB 157.0 bn, margin expanded to 34.5% from 31.2% a year earlier

Q2 EBITDA rose 28.5% to RUB 157.0 bn, significantly outpacing revenue. The EBITDA margin expanded from 31.2% to 34.5%, indicating that operating costs grew slower than income.

The income statement shows operating expenses for the quarter increased only 10.6% to RUB 356.6 bn, while revenue grew 16.3%. The gap drove the margin expansion.

Quarterly net profit reached RUB 77.7 bn, nearly double last year's RUB 51.7 bn

Net profit for April–June 2026 reached RUB 77.7 bn versus RUB 51.7 bn a year earlier. The growth was driven by operating profit, which jumped from RUB 76.9 bn to RUB 107.2 bn.

Finance costs fell from RUB 20.8 bn to RUB 17.2 bn, also supporting the bottom line. The effective tax rate was about 27%, slightly lower than the 29.4% a year earlier.

Leverage stands at 1.7x EBITDA for the last 12 months, with net debt up RUB 14.8 bn over the year

As of end-June 2026, FGC UES net debt stood at RUB 873.1 bn. The net debt to EBITDA ratio for the last 12 months is 1.7x. Over the year, net debt increased by RUB 14.8 bn, although it decreased by RUB 33.9 bn in the latest quarter.

Long-term borrowings fell from RUB 564.6 bn to RUB 501.1 bn since the start of the year, while short-term borrowings rose from RUB 265.1 bn to RUB 274.7 bn. Cash on the balance sheet is RUB 285.2 bn.

H1 capex of RUB 279.2 bn nearly equals operating cash flow before working capital changes

In H1 2026, capex reached RUB 279.2 bn, almost matching operating cash flow before working capital changes of RUB 400.4 bn. Net operating cash flow after taxes and interest was RUB 301.3 bn, meaning the company spends nearly all generated cash flow on its investment program.

Free cash flow, therefore, remains negative after capex. This is typical for a grid company with a large investment program, but it limits the ability to pay dividends.

No dividends paid over the last 12 months; the model estimates the next payout at RUB 0.0 per share

FGC UES has not paid dividends over the last 12 months. Our model estimates the next payout at RUB 0.0 per share, implying a zero payout ratio from profit.

With a fair yield of 12.0% for this name, the absence of dividends makes the stock less attractive for income-oriented investors. However, the company continues to fund its investment program, which may be a priority.

EV/EBITDA multiple of 1.9x is below its three-year average of 2.3x

EV/EBITDA for the last twelve months is 1.9x, below the three-year average of 2.3x. This means the stock trades at a discount to its own history.

P/E LTM is 2.2x, reflecting high profitability against a low market cap (RUB 98.6 bn). ROE is 11.2%.

Valuation on the latest reported figures

Bottom line

FGC UES reported strong EBITDA and margin growth in Q2, indicating operational efficiency. However, almost all operating cash flow goes to capex, and debt continues to rise. The absence of dividends and low valuation (EV/EBITDA 1.9x vs. average 2.3x) raise the question of when the company will start returning cash to shareholders. For now, this is a story about infrastructure investment, not yield.