DTEK Energy increases coal mining 12% m/m in December

Ukraine’s leading coal and power producer DTEK Energy
(DTEKUA) mined 16.84 mmt of ROM coal in 2021, Concorde Capital calculated based
on sector-wide data provided by the Energy Ministry. This is 10.9% less yoy,
but 0.5% more yoy on a like-to-like basis (adjusting for the mine that DTEK
discontinued operating in January).

In December alone, the company produced 1.69 mmt of
ROM coal, which is 12.0% more than in November (on a daily average basis) and
5.7% more yoy (and 25.5% more yoy on a like-to-like basis).

The total mining of steam and coking coal in the
country increased 2.0% yoy to 29.39 mmt in 2021, including the mining of steam
coal of 22.15 mmt (-0.1% yoy).

Alexander Paraschiy: DTEK is
increasing coal mining for the fourth month in row, showing a 37% growth in
December compared to August’s low. The company managed to outperform our
estimate of mining 16.6-16.7 mmt in 2021. Most likely, the company will
continue investing into further increase of coal mining this year, taking into
account high global coal prices. In this way, DTEK might reach self-sufficiency
in hard steam coal in 2022.

We expect the company’s 2021 EBITDA will increase
23-25% yoy, and we keep our bullish view on DTEKUA bonds.