DTEK releases production results for 2008

Ukraine’s largest private energy holding, DTEK, increased coal extraction by 11.4% yoy to 17.6 mln mt in 2008, decreased electricity production by 7.3% yoy to 16.8 TWh and raised electricity transmission by 10.8% yoy to 13.5 TWh. The company increased its share in the Ukrainian coal sector by 1.7 pp to 22.6%, decreased its share in power generation by 0.6 pp to 9.7% and increased its share in the power distribution sector by 1.1 pp to 6.5%. Alexander Paraschiy: DTEK remains a powerful player on the Ukrainian energy market, with share of steam coal production of 28.5% and share of electricity production by thermal power plants of 25.4%. We attribute the increase in DTEK’s power distribution in 2008, against the backdrop of zero growth for the whole sector, to DTEK’s Servis-Invest enticing industrial consumers from distribution company Dniprooblenergo in late 2007. For the year 2009, we expect a 14%-20% decrease in electricity production and supply by DTEK-related companies. The reason is a reduction in power demand from industrial consumers (the key clients of DTEK’s distribution companies), and a decrease in demand for fossil-fueled electricity on the wholesale market in 2009.