DTEK boosts coal mining in Ukraine 3.7% qoq in 3Q15
8 October 2015
Ukraine’s leading coal and power holding DTEK Energy (DTEKUA) produced 6.93 mmt coal at its Ukrainian mines in 3Q15, we estimate, based on preliminary 9M15 data provided by Interfax-Ukraine. The result indicates a 8.9% decline yoy but 3.7% growth compared to 2Q15.
Output at DTEK’s mines producing hard steam coal decreased 1.8% yoy (and -4.4% qoq) to 5.48 mmt in 3Q15. At the same time, its anthracite mines, operating in the occupied territory of Donbas, improved their output 53% qoq (to 1.45 mmt) in 3Q15. This number still lags 28% yoy.
In 9M15, DTEK coal mining in Ukraine dropped 27% yoy to 19.92 mmt, mostly due to lagging anthracite coal mining (-71% yoy). Recall, in 1H15, coal output at its Ukrainian mines fell 34% yoy to 12.99 mmt, while total coal mining fell 32% yoy to 14.00 mmt.
Ukraine’s total mining of steam coal slid 40% yoy to 23.62 mmt as output at non-DTEK mines decreased 69% yoy in 9M15. As a result, DTEK’s share in total production of Ukrainian energy coal increased to 84% in 9M15, up from 69% a year before.
Alexander Paraschiy: The steady recovery of output at DTEK’s anthracite mines, as well as the reported unblocking of supply of this coal in recent months, will enable DTEK to improve its operating efficiency in its mining segment, as well as improve its cash liquidity in the coming months. This supports our view that the worst is over for DTEK, from the operational side.
