Centerenergo pays UAH 0.2 DPS, raises EBITDA 1.4x yoy in 2012

Centerenergo (CEEN UK) shareholders voted to approve a plan to distribute 30% of the company’s 2012 income in dividends at their March 21 AGM. The company will pay UAH 70 mln in dividends by June 1, which implies DPS of UAH 0.19 and a yield of 3.3%.

The company also revealed its detailed 2012 financials, with net revenue growing 26% yoy to UAH 9,063 mln and EBITDA advancing 43% yoy to UAH 558 mln. The company’s fuel costs per MWh were just 1.0% lower yoy in 2012 and fully coincided with an 1.0% economy of fuel per MWh.

Shareholders also approved the company’s bottom line, which Centerenergo earlier reported at UAH 346 mln (2.0x higher yoy). Shareholders voted not to consider the significant deals item.

Alexander Paraschiy: Centerenergo’s operating results slightly disappointed us. Despite a 10% decline in the benchmark coal price (which state-produced coal is based on) since April 1, 2012, the company’s fuel costs didn’t decline last year. The failure to approve the significant deals item (which might have enabled those voting against to sell their shares) is in line with the state policy to prevent any opportunity that might lead to a share buyback. Nevertheless, it looks a bit strange given the company is in fact signing large contracts for coal purchases that can viewed as large deals.

While we are concerned by the company’s inability to benefit from last year’s coal-price decline in Ukraine, we have a bullish outlook on Centerenergo, one of the most liquid and financially stable companies in the UX Index.