Centrenergo EBITDA plunges 74% yoy in 1Q18

Net revenue at power generation company Centrenergo
(CEEN UK) increased 31% yoy to UAH 4,146 bln in 1Q18, according to its Apr. 26
regulatory filing. The growth was prompted by a 32% yoy rise in electricity
sales to 2.24 TWh. The company’s operating costs surged 91% yoy, which resulted
in a 74% yoy plunge in EBITDA to UAH 299 mln. Centrenergo’s net profit fell 80%
yoy to UAH 168 mln.

Despite its plummeting profit, the company enjoyed a
49% yoy gain in net cash generated from operations to UAH 1,317 mln (mostly due
to a working capital release) and end-1Q18 cash balance of UAH 2,253 mln (up
80% yoy and 110% YTD).

Alexander Paraschiy: The reduced
profitability is of little surprise, being the natural outcome of higher coal
purchase costs on the back of sticky yoy electricity rates.

With its huge cash balance, the company seems to be
well-prepared for privatization, which the State Property Fund preliminarily scheduled for June,
providing Ukraine’s Cabinet gives the green light.

Earlier, the fund’s head announced that a decision
to launch privatization may be adopted by the government today, so we look forward to hearing an update on that.