Dniproenergo Announces 44% Sales Increase.

The thermal power generator Dniproenergo (DNEN: BUY) increased sales in 1H06 by 44% yoy to $249m and EBITDA by 11.6% to $21.5m. Net losses increased due to temporal differences in tax accounting to $3.3 m. The company also decreased its accounts payable by 9.7% ($21.7m) during 2Q06. Alexander Paraschiy: About three quarters of the sales growth was due to increased tariffs, and the rest to output growth. DNEN’s EBITDA margin decreased to 8.6% from 11% in 1H05 due to a lag between fuel price growth and tariff adjustments. The company remains the most cost-efficient traded GenCo. The debt decrease supports our optimism about the company’s ability to clear its debts through participation in the government’s debt-offset program.