Donbasenergo Announces first quarter results

Donbasenergo (DOEN: BUY) posted USD 55.8 mn revenue (+280%) and USD 0.65 mn net income (-1.4%) in 1Q05. The company?s electricity output decreased by 1.3% yoy. Concorde Capital: The company operates two power plants: Slaviansk TPP, which decreased its output by 16% in 1Q05, because of dispatcher limitations (the 800 MW unit works at 340 MW only), and Starobeshev TPP who increased output by 13% yoy in Q1. Starobeshev TPP is on the final stage of testing unit#4, which is the most efficient and the cheapest unit reconstructed according to CFB standards. This unit will give DOEN a significant competitive advantage this year. We share DOEN management?s optimism for a 16% increase of electricity output in 2005.