Kyivenergo raises net losses 3.7x yoy in 1Q12

Integrated utility Kyivenergo (KIEN UK) reported a 33% increase in revenue in 1Q12, mainly on a 1.2x increase in electricity and heat tariffs, according to a filing on Wednesday. Heavy losses in its heating segment pushed the company’s bottom line lower: negative EBITDA amounted to USD 36 mln (5x growth yoy), and net losses grew to USD 41 mln (+3.7x yoy).

Alexander Paraschiy: Unlike other Ukrainian utilities, Kyivenergo generates its losses mainly in its heating segment, which makes its bottom line sensitive to state compensation that covers the difference between tariffs and costs. We expect this compensation could reach UAH 2 bln (USD 250 mln) this year, as parliament already reserved UAH 4.6 bln for compensation from the state budget (see our news of April 11).