DTEK Energy coal mining falls in 9% m/m January

Ukraine’s leading coal and power producer DTEK Energy
(DTEKUA) mined 1.53 mmt of ROM coal in January, Concorde Capital calculated
based on sector-wide data provided by the Energy Ministry. This is 1.1% less
yoy, but 13.3% more yoy on a like-to-like basis (adjusting for the mine that
DTEK discontinued operating in January 2021). Compared to December 2021, its
coal mining decreased 9.1%.

The thermal power plants of DTEK Energy consumed 1.28
mmt of coal in January (down 5.4% m/m and 17.4% yoy) and had 1.51 mmt of coal
supplied (of which 0.43 mmt – was imported), Concorde Capital calculated. Its
power plants’ coal stockpiles increased 81% m/m to 0.51 mmt as of end-January
(covering about 13 days of power production).

Alexander Paraschiy: January
mining output slightly disappoints, but we still expect DTEK Energy to be able
to slightly increase its coal production in 2022. While DTEK Energy’s coal
self-sufficiency slightly decreased in January, it still remains solid (about
84% for hard steam coal). We expect that in February-March, DTEK Energy will
decrease coal imports so that 1Q22 imports are unlikely to exceed the result
for 1Q21 (0.73 mmt). All in all, we expect that 1Q22 will be much better for
DTEK Energy’s P&L, on a yoy basis.

In 2021, we estimate, the company generated about
UAH 14.0 – 14.5 bln of EBITDA (up from UAH 8.7 bln in 2020). We remain bullish
on DTEKUA bonds.