DTEK Energy boosts coal mining 0.4% in 1Q19

Ukraine’s leading coal and power holding DTEK Energy
(DTEKUA) produced 5.78 mmt of raw steam coal in 1Q19, Concorde Capital calculated
based on sector-wide data provided by Interfax-Ukraine on Apr. 12. This is 0.4%
more yoy. The increase was a result of a 2.2x jump in mining at its Bilozerska
mine (to 0.25 mmt), while production at the holding’s biggest asset,
Pavlogradcoal, slid 2.0% yoy to 4.74 mmt. Ukraine’s total production of steam
coal decreased 3.1% yoy to 6.54 mmt in 1Q19, with DTEK’s share reached 88%
(from 85%  a year before).

In March alone, DTEK Energy produced 2.05 mmt of coal.
This is 3.6% less yoy, 0.6% more than February (on an average daily basis) and
89% of Ukraine’s total steam coal production.

Alexander Paraschiy: The result
is in line with our expectation that DTEK Energy will boost its coal mining by
1-2% yoy in 2019. That should be enough to cover DTEK’s power plants’ needs of
hard steam coal in 2019. We maintain our neutral view on DTEKUA Eurobonds.