Komsomolets Donbasa increases EBITDA 2.6x yoy in 1H12

Komsomolets Donbasa (SHKD UK), a Ukrainian steam coal miner, reported EBITDA of USD 60 mln in 1H12, which is 161% higher yoy. Revenue jumped 60% yoy to USD 133 mln, and its bottom line turned positive to USD 21 mln from a net loss of USD 0.2 mln a year before. EBITDA margin grew from 28% in 1H11 to a hefty 45% in 1H12. On a quarterly basis, revenue was cut 4% qoq to USD 65 mln in 2Q12, EBITDA decreased 14% qoq to USD 28 mln, and net income plunged 46% qoq to USD 8 mln.

Alexander Paraschiy: The company’s improved financials in 2Q12 on the back of nearly sticky yoy coal prices suggests the company turned into a profit center for its parent DTEK (DTEKUA), i.e. inter-holding prices for energy coal are much higher this year. This is supported by financials of another DTEK coal asset, Pavlogradvuhillia Mine: EBITDA increased 2.2x yoy in 1H12. We deem it a bad sign for DTEK’s newly acquired Dniproenergo (DNEN UK) and Zakhidenergo (ZAEN UK), who are likely to suffer from increased coal prices.