Centrenergo posts negative EBITDA, profit in 1Q12

Centrenergo (CEEN UK) released its 1Q12 financials on Tuesday: top line grew 52% yoy to USD 276 mln, mainly on a 40% yoy increase in power output. The company’s power tariff grew just 8% yoy, much slower than the cost of its key input: coal costs grew 24% yoy to USD 98/t. This resulted in negative USD 15 mln EBITDA (vs. marginally positive USD 0.3 mln a year earlier), and caused a 2.3x yoy increase in the company’s quarterly losses to USD 22 mln.

Alexander Paraschiy: The weak result for the first quarter was expected (see our news of April 9): management indicated its losses for 2M12 exceeded UAH 200 mln (USD 25 mln). The second quarter has traditionally been better for Centrenergo and other power generators as the regulator should allow a profit in order to accumulate coal stockpiles for the next heating season. Nevertheless, for the full year, we do not expect Centrenergo to improve profitability.