Centrenergo EBITDA plunges 74% in 1H18

Power GenCo Centrenergo (CEEN UK) generated UAH 7,974
mln net revenue in 1H18, or 32% more yoy, according to its July 27 regulatory
filing. The growth was fueled by a 57% yoy increase in the sale of electricity
to the wholesale market amid a 16% yoy decline in the average achieved power
price. This decline in the power price, as well as a surge in fuel costs,
resulted in Centrenergo’s EBITDA plunging 74% yoy to UAH 705 mln. The company’s
bottom line fell 78% yoy to UAH 439 mln.

Alexander Paraschiy: The
worsening in the bottom line is the result of a high comparison base from the
previous year, when the company enjoyed a temporary increase in average power
rates due to an emergency on the electricity market (a trade blockade of
occupied Donbas limited coal supply to power plants). Now that the company’s
profits have been “normalized,” Centrenergo is unlikely to remain a
generous dividend payer as it had been this year and in 2017.