Centrenergo posts UAH 436 mln profit in 3Q21

State-controlled power generation company Centrenergo
(CEEN UK) reported a UAH 436 mln net profit in 3Q21, according to its Oct. 25
announcement. With this profit, the company was able to decrease its year-to-date
loss to UAH 156 mln in 9M21, from UAH 591 mln in 6M21, Centrenergo highlighted.

Its 3Q21 revenue decreased 45% yoy to UAH 3,136 mln
despite more than doubled power generation. The key driver of its bottom line
increase in was UAH 512 mln in “other operating income” (up 33x yoy) which
allowed it to increase EBITDA to UAH 499 mln (up 25% yoy) in 3Q21. The company
did not explain the nature of such “other” income.

In 9M21, Centrenergo generated UAH 8,909 mln net
revenue (down 40% yoy), UAH 37 mln EBITDA (down 6% yoy), which was a result of
an increase of “other operating income” by 11.6x yoy.

The company also reported that it had concluded
contracts for coal supplies from Poland and Kazakhstan and is in talks to
increase supplies of coal from these countries to secure greater coal
stockpiles for the upcoming heating season. As of Oct. 23, Centrenergo’s power
plants had 91 kt of coal stockpiles, according to Energy Ministry data, which
is enough for just 8-10 days of power generation.

Alexander Paraschiy: Increased
profit in 3Q21 is the only good news for Centrenergo, while the key reason for
such an increase is not clear at the moment. Taking into account the company’s
need to increase purchases of coal (including imports) at increased prices,
there is still a low probability that Centrenergo will be able to become
profitable in full-year 2021, despite the significant increase of domestic
power prices.