DTEK coal sales fall 21% m/m, power output rises 7% m/m in May

Ukraine’s leading coal and utility holding DTEK Energy (DTEKUA) mined 2,013 kt of coal in May 2016, which is a 24% m/m decrease, according to its monthly report. The decline was primarily caused by smaller production of hard steam coal, which dropped 34% m/m to 1,142 kt. Its sales of coal decreased 21% m/m to 1,630 kt, and sales of coal outside Ukraine fell 16% m/m to 158 kt.

DTEK Energy’s electricity supply from thermal power plants located outside the occupied territory of Donbas amounted to 2.34 TWh in May, or a 7% m/m increase. Its average achieved price for electricity generated decreased 9% m/m to UAH 1,067/MWh.

Alexander Paraschiy: DTEK’s operating results in electricity segment are not new to us, as well as its data for coal production in Ukraine. From the above statistics, we conclude that DTEK Energy increased its coal mining in Russia (+22% m/m to 224 kt in May). That result implies DTEK’s Russian mines are able to mine over 2 mmt of coal in full year 2016 (which we doubted earlier), and that means a successful sale of Russian mines (as the company announced earlier, for a total consideration of USD 436 mln) looks realistic.

As we reported earlier, DTEK is going to show for June a significant decline in mining of anthracite coal in Ukraine (-85% m/m), while its total coal production (including Russian mines) is likely to slightly improve m/m. DTEK’s power generation result should improve further in June, as compared to May, given that total power production of all Ukrainian thermal power plants increased 13% m/m.