DTEK decreases net debt to EBITDA ratio to 0.45x

DTEK (DTEKUA), Ukraine’s largest private energy holding reported its 2011 financial results last Friday: top line increased 62% yoy to USD 4,962 mln, EBITDA rose 67% yoy to USD 1,294 mln (EBITDA margin of 26%, up 1 pp), and net income grew 23% yoy to USD 441 mln. DTEK reported USD 1,306 mln in end-2011 cash position and total debt of USD 1,890 mln, implying net debt to EBITDA ratio of 0.45x, an improvement from 0.62x a year before. DTEK increased CapEx 1.9x yoy to USD 542 mln, with its mining segment absorbing 58% of total investments last year.

Roman Topolyuk: DTEK’s solid 2011 financial results reflect the group’s ongoing expansion, rising prices for energy and stable or growing operating performance in its various segments. Growth in DTEK’s bottom line (+23% yoy) lagged improvement in EBITDA and revenue (+62-67% yoy) due to the recognition of one-off losses related to the transfer of subsidiaries and impairments. The latest reported net debt to EBITDA multiple of 0.45x represents DTEK’s strong solvency, which we believe will improve further, as long as the impact of its business expansion through acquisitions and concessions from the state at the end of 2011 and beginning of 2012 materialize in 70-72% yoy growth in full year earnings in 2012. DTEK’s cash balance will allow it to fund its modernization program in 2012 with minor need for attracting new debt.