DTEK Energy boosts coal mining 18% m/m in February

Ukraine’s leading coal and power holding DTEK Energy
(DTEKUA) produced 3.64 mmt of raw coal in 2M17, Concorde Capital calculated
based on sector-wide data provided by the Energy Ministry on March 23. This is
4.3% less yoy on a like-for-like basis. In February alone, DTEK’s mines
produced 67.0 kt coal per day, which is 17.9% more than January but 1.4% less
yoy.

Ukraine’s total mining of steam coal was 4.27 mmt in
2M17, or a 3.5% decrease on a like-for-like basis, with DTEK’s share remaining
close to 85%.

Alexander Paraschiy: DTEK has the
potential to slightly increase its coal mining in March from the recovery of
its mining operations at its Bilozerska mine in late February, after no
production in the previous four months. Bilozerska may increase coal mining to
2.5 mmt this year, or almost 4x more yoy, according to DTEK. Currently, the
mine has two new operational longwalls. With such plans and improved
performance in February, DTEK Energy’s initial guidance to boost total coal
mining by 7.3% yoy to 24.6 mmt in 2018 looks feasible. The key question,
however, remains whether it will be able to secure demand for all its mined
coal. We remain neutral on DTEKUA bonds.