DTEK’s listed power DisCos improve their 1Q16 P&L

The three top power distribution companies of DTEK, Dniprooblenergo (DNON UK), Kyivenergo (KIEN UK) and Donetskoblenergo (DOON UK), reported some improvement in their 1Q16 financial results. Their aggregate revenue increased 18% yoy to UAH 15.0 bln in 1Q16. Their aggregated EBITDA was UAH 122 mln, which is a radical improvement compared to negative UAH 434 mln a year before. Their combined net loss was halved yoy to UAH 378 mln.

Alexander Paraschiy: The three mentioned DisCos account for about 75% of DTEK’s total power distribution business, so their results are a reliable indicator for this segment. Unlike DTEK’s power generation companies, whose financials can be easily distorted via non-market prices for their inputs, DTEK’s distribution companies have fewer business links with the holding’s other segments. The improved EBITDA of DisCos adds some optimism that this segment won’t be loss-producing for the holding, as it was last year (with negative EBITDA of UAH 914 mln in 2015).