IDGC Volga: H1 profit up 1.6x, but operating cash flow fell short of last year

27 августа «МРСК Волги» раскрыла промежуточную отчётность за первое полугодие 2026 года. Выручка выросла на 25,0% до 71,2 млрд руб., EBITDA – на 95,4% до 14,2 млрд руб., чистая прибыль – на 134,5% до 7,3 млрд руб. Разбор показывает, что рост прибыли обеспечен не только операционными результатами, но и эффектом низкой базы, а операционный денежный поток за полугодие оказался ниже прошлогоднего.

Key takeaways

— H1 revenue grew 25.0% to RUB 71.2bn, but Q2 growth slowed to 25.0% from 53.7% a year earlier

— H1 EBITDA grew 95.4% to RUB 14.2bn, margin expanded from 13.0% to 20.3%

— H1 net profit grew 134.5% to RUB 7.3bn, but Q2 growth slowed to 134.5% from 53.7% a year earlier

— H1 operating cash flow was RUB 8.7bn, below last year's RUB 6.4bn despite higher profit

— H1 capex rose to RUB 8.2bn from RUB 5.1bn, leading to negative free cash flow

— Net debt at end-H1 was RUB 0.9bn, down from RUB 2.2bn a year earlier

— Trailing dividend yield is 3.55%, but our model estimates next dividend at RUB 0.01 per share, implying forward yield of 7.2%

Key figures, RUB bn

H1 revenue grew 25.0% to RUB 71.2bn, but Q2 growth slowed to 25.0% from 53.7% a year earlier

For H1 2026, IDGC Volga's revenue reached RUB 71.2bn, up 25.0% from the same period last year. The main contributor was electricity transmission – RUB 66.7bn, up 15.5% from last year. Grid connection brought RUB 3.8bn versus RUB 0.8bn a year earlier – a fivefold increase.

In Q2 2026, revenue was RUB 34.7bn, up 25.0% from Q2 2025. For comparison, in Q1 2026 growth was 15.7%, and in Q2 2025 it was 53.7%. The slowdown is due to a high base effect: last year tariffs and volumes grew faster.

The report shows that in Q2 2026, revenue from grid connection was RUB 3.5bn versus RUB 0.34bn a year earlier. This is one-off activity related to connecting new consumers and is unlikely to repeat at such a scale.

H1 EBITDA grew 95.4% to RUB 14.2bn, margin expanded from 13.0% to 20.3%

EBITDA for H1 2026 was RUB 14.2bn, up 95.4% from H1 2025. EBITDA margin expanded from 13.0% to 20.3%. The main driver was revenue growth with a moderate increase in operating expenses.

Operating expenses for H1 grew 15.8% to RUB 62.0bn, significantly below the revenue growth rate. In particular, electricity transmission costs rose 8.4% to RUB 32.3bn, while labour costs rose 21.8% to RUB 13.7bn. Material costs increased 18.7% to RUB 8.4bn.

In Q2 2026, EBITDA was RUB 7.0bn versus RUB 3.6bn a year earlier. The near-doubling was driven by both higher revenue and cost containment.

H1 net profit grew 134.5% to RUB 7.3bn, but Q2 growth slowed to 134.5% from 53.7% a year earlier

Net profit for H1 2026 was RUB 7.3bn, up 134.5% from H1 2025. In Q2 2026, net profit was RUB 3.5bn versus RUB 1.5bn a year earlier – a 2.3x increase.

Profit growth was driven not only by operating results but also by lower finance costs. Interest expenses on financial liabilities for H1 fell from RUB 496m to RUB 277m, while interest income rose from RUB 638m to RUB 650m.

The effective tax rate for H1 was 25.2% versus 25.9% a year earlier, also supporting net profit.

H1 operating cash flow was RUB 8.7bn, below last year's RUB 6.4bn despite higher profit

Operating cash flow for H1 2026 was RUB 8.7bn, up 35.3% from H1 2025 (RUB 6.4bn). However, in Q2 2026 operating cash flow was only RUB 2.5bn versus RUB 1.1bn a year earlier.

The decline in Q2 operating cash flow is due to higher receivables and advances issued, as well as increased inventories. The change in trade and other receivables for H1 was +RUB 675m (a decrease), but in Q2, judging by the dynamics, there was an outflow.

Despite higher profit, operating cash flow did not reach a level that would provide positive free cash flow after capex.

H1 capex rose to RUB 8.2bn from RUB 5.1bn, leading to negative free cash flow

Capital expenditures for H1 2026 were RUB 8.2bn versus RUB 5.1bn for H1 2025 – up 61.2%. In Q2 2026, capex was RUB 4.1bn versus RUB 2.5bn a year earlier.

Free cash flow (operating cash flow minus capex) for H1 was RUB 0.5bn (8.7 – 8.2), significantly below H1 2025 (6.4 – 5.1 = RUB 1.3bn). In Q2, free cash flow was negative: 2.5 – 4.1 = -RUB 1.6bn.

The increase in capex is related to the investment programme, financed by operating cash flow and borrowings. The company raised RUB 7.9bn in debt during H1 but also repaid RUB 7.9bn.

Net debt at end-H1 was RUB 0.9bn, down from RUB 2.2bn a year earlier

At end-June 2026, IDGC Volga's net debt was RUB 0.9bn, significantly lower than RUB 2.2bn at end-June 2025. Over the last 12 months, net debt decreased by RUB 1.3bn.

The net debt / EBITDA ratio for the last 12 months is 0.08 – a very low level, indicating minimal debt burden. The company barely uses borrowed financing.

Cash on the balance sheet at end-H1 was RUB 7.3bn, covering the entire debt (RUB 8.1bn of long-term and short-term borrowings).

Trailing dividend yield is 3.55%, but our model estimates next dividend at RUB 0.01 per share, implying forward yield of 7.2%

Over the last 12 months, the company paid dividends of RUB 0.0 per share, corresponding to a dividend yield of 3.55% (likely due to interim payments). Our model estimates the next dividend at RUB 0.01 per share, implying a forward yield of 7.2%.

The fair yield for this name, in our view, is 10.5%, which is higher than the forward yield. This means the current share price implies a higher yield than we consider fair. The implied payout ratio is 0.38 of profit.

The company declared dividends for H1 2026 of RUB 3,992m, which corresponds to RUB 0.21 per share (calculated). However, the payment was reflected in the statement of changes in equity, but not in the cash flow for H1, as it will likely be paid later.

Valuation on the latest reported figures

Bottom line

IDGC Volga posted strong H1 2026 results: revenue up 25%, EBITDA nearly doubled, net profit up 2.3x. However, Q2 growth slowed and operating cash flow was weak, leading to negative free cash flow. The company is nearly debt-free, but capex is rising and future dividends, in our view, will be below the current yield. The key question for shareholders is whether the company can sustain profit growth without one-off factors and amid rising investments.