Centrenergo Improves 2006 Margins and Decides to Pay Dividends

Yesterday, power generation company Centrenergo’s (CEEN: HOLD) AGM approved the company’s 2006 financial results: net revenue of USD 525 mln (+36% yoy), EBITDA of USD 70 mln (+81% yoy) and net income of USD 17 mln (+44% yoy). Shareholders decided to pay 15% of net income as dividends (DPS is USD 0.007; dividend yield is 0.2%). Dividends will be paid during May-December 2007. Alexander Paraschiy: The company has improved its EBITDA margin from 10% in 2005 to 13% in 2006 – mainly due raising the load of its equipment (16% growth of output yoy) and increased fuel efficiency. This year, the company forecasts a decrease in electricity output (by about 5% yoy) due to lower domestic electricity demand (warmer winter in 2006-2007). However, sales are expected to grow as tariffs increase, and profitability remain close to the 2006 level.