Dniproenergo slightly improves bottom line in 2Q12

DTEK Dniproenergo (DNEN UK) reported 1% yoy growth in net revenue in 1H12, according to IFRS based statements. EBITDA for the period amounted to USD 7.8 mln (down 10x compared to UAS-based EBITDA for 1H11). The company’s loss amounted to USD 36.8 mln (vs. a USD 41.5 mln profit a year ago). For 2Q12 alone, the company raised revenue 1% qoq and was able to report positive EBITDA (USD 44.5 mln) and net income (USD 7.8 mln) – both were negative in 1Q12.

Alexander Paraschiy: Dniproenergo’s results for 2Q are apparently weaker than for its state-controlled peers, Centrenergo (CEEN UK) and Donbasenergo (DOEN UK). Unlike the state-controlled GenCos, which experienced the positive effect of both coal price declines and power tariff growth in 2Q12, Dniproenergo enjoyed only the latter effect. The result is in line with our expectations based on the strong results of Dniproenergo’s main coal suppliers (also part of DTEK), the Pavlogradvuhillya and Komsomolets Donbasa mines (see our news on SHKD dated July 25). We expect Zakhidenergo (ZAEN UK) to post results comparable to Dniproenergo: improved EBITDA but still negative bottom line for 1H12.