DTEK boosts power generation 31% m/m in July

Ukraine’s leading coal & utility holding DTEK Energy (DTEKUA) produced 3.92 TWh of electricity in July, according to Concorde Capital estimates based on sector-wide data provided by Energobiznes. This is 31% higher than June and a 6% decrease yoy.

The m/m increase in power output was recorded in all types of DTEK’s power plants (PPs), including a 38% growth at anthracite-burning thermal PPs, 27% growth at hard-coal burning thermal PPs and 77% growth at combined heat and power plants. Total electricity production in Ukraine increased 7% m/m to 11.55 TWh in July.

In 7M16, DTEK produced 21.99 TWh of electricity, which is an 8% decline yoy. Its anthracite-fired PPs boosted their output 81% yoy to 5.66 TWh, while PPs fired by hard coal dropped 23% yoy to 14.45 TWh. Total electricity production in Ukraine fell 6% yoy to 85.24 TWh in 7M16.

Alexander Paraschiy: DTEK’s 7M16 results remain broadly consistent with our expectations that DTEK will reduce electricity generation by about 5% yoy this year. It also confirms our expectation that DTEK Energy will show much better P&L in 3Q16 as compared to the second quarter. The growth is expected to be fueled by both output growth and increased average electricity prices enjoyed by power plants. Since beginning of the current quarter, the average price of electricity supplied by thermal power plants in Ukraine was about 3.5% higher than it was in 2Q16. Thus far, we confirm our neutral view on DTEKUA Eurobonds.