Centrenergo doubles profit yoy in 1H13

Power GenCo Centrenergo (CEEN UK) reported on July 25 encouraging results for 1H13, despite severe damage to its Uglegorsk power plant caused by fire in late March. The company’s 1H13 EBITDA (IFRS-based) improved 59% yoy to UAH 522 mln, and its bottom line increased 89% yoy to UAH 426 mln. Centrenergo naturally posted a yoy decline in net revenue (-16% to UAH 3.63 bln) on a 23% drop in power output (to 6.21 TWh) in 1H13.

The company’s 2Q13 results also were encouraging, despite its power output having declined 30% yoy and 38% qoq in the period. Quarterly revenue declined 21% qoq to UAH 1.68 bln, EBITDA fell only 11% yoy to UAH 430 mln and net income fell 13% to UAH 349 mln.

Alexander Paraschiy: Centrenergo’s financial results reflect enormous support that Ukraine’s power sector regulator and the state budget offered to the company to cope with the operating expenses and recovery costs of the damaged power plant. We are currently not sure that such results are sustainable, as there is a high risk of some revaluation-related losses (with respect to the damaged power plant) in 2H13. Unlike Donbasenergo, Centrenergo does not look like a company that will pay generous dividends in the next year. Or at least, it has a solid excuse to avoid dividend distribution.