Russia’s nuclear corporation demonstrated excellent performance across all lines of business, says Rosatom’s Annual Report 2016, confirming continued growth of the revenue and international contract portfolio. You will find more details on the company’s financial and operating performance in our report.
In 2016, Rosatom increased its IFRS revenue by 5.3% to 864.6 billion rubles and retained its leadership in terms of reactor units under construction abroad (34 units in 12 countries). Long-term foreign contracts totaled 133.4 billion US dollars as at the year end. “We continued expanding our portfolio of international projects to have increased it by 20.9%. This is our undeniable achievement. One of the key results was a contract signed with the Swedish nuclear operator for the supply of TVS-K nuclear fuel. Many years of our efforts to enter the Western nuclear fuel market were finally rewarded. Along with commercial fuel supplies to Sweden’s Ringhals Nuclear Power Plant, we made a contract with an American company to deliver pilot TVS-K assemblies to the USA. There were other major achievements on the international market, such as a hand-over of Kudankulam’s first two power units to India and the first concrete pouring at the site of Units 3 and 4. A groundbreaking ceremony was held in Iran to mark the start of construction of Bushehr II Units 2 and 3,” Kirill Komarov, Rosatom’s First Deputy CEO for International Business, commented on the last year’s developments.
New business growth
2016 saw the successful development of Rosatom’s new businesses. The 10-year contract portfolio for new products went up 74.6% to 1,018.8 billion rubles, while revenue from new products reached 190.8 billion rubles (+52.6%). Another key event from the last year was the company’s winning bid to build 610 MW of wind generation capacity in Russia.
“In 2016, our new products showed good performance. According to our strategy, new businesses will generate 30% of the Group’s revenue by 2030. When we think of new products, we always look at whether they will be sought-after and competitive globally. Working on a new project, we always build a vertically integrated value chain so as to deliver a comprehensive solution to our international customers,” Kirill Komarov noted.
“We are not afraid of looking into the future because it is us who shape it. Our long-term Development Strategy 2030, which is a centerpiece of our 2016 Annual Report, totally proves it. Strategically, we aim to increase our share in foreign markets, create new products for the Russian and global markets, and reduce our production costs and lead times. 2016 was a success, and the Report shows that we made an important step to reach our strategic goals,” Rosatom CEO Alexei Likhachev commented on the results.
Consolidated labor productivity in current prices (excluding the Nuclear Weapons Division) has risen 110.9% against the 2011 base level Rosatom owes this growth to performance improvements as part of the corporate strategic program to reduce production costs and lead times. “In 2016, we cut our fixed costs by 8% and accelerated our inventory turnover by 27% (in days). We also launched an overhead cost optimization program that brought about 6 billion rubles in savings,” said Nikolai Solomon, Rosatom’s Chief Financial Officer and First Deputy CEO for Corporate Functions.
Onwards and upwards
The annual report says that the year 2016 was record-setting as Russia’s nuclear power plants generated 196.4 billion kWh of electricity, with the share of nuclear power reaching 18.3% of the country’s energy mix. This was contributed to by the commissioning of Beloyarsk Unit 4 operating an innovative BN-800 fast neutron reactor and grid connection of Novovoronezh II Unit 1 with a Generation 3+ reactor (commissioned in February 2017). The report stresses that all nuclear power facilities worked safely and reliably in 2016, just like in the previous years, with no INES Level 2 events registered (Level 1 and Level 0 events pose no threat to the facilities, people or the environment).
Rosatom: a career launcher
In 2016, Rosatom won six major awards for its talent management practices. The company topped the annual Leadership Index ranking as the best Russian company for starting a career (the ranking is compiled annually by Rabota.ru recruitment website and Elitny Personal magazine). For the two consecutive years, HeadHunter named Rosatom a Top 3 Russian employer. The company was also ranked a Top 5 employer in the Engineering and Production category by Universum (based on the survey among engineering, physics and chemistry students).
The report was prepared in compliance with key global standards (International Framework, Sustainability Reporting Guidelines of the Global Reporting Initiative, and AccountAbility) and in close cooperation with stakeholders.