Centrenergo losses reach UAH 2 bln in 2019, state official says

State-controlled power generation company Centrenergo
generated UAH 1.98 bln of losses in 2019, after UAH 0.50 bln net profit in
2018, Dmytro Sennychenko, the head of State Property Fund, told journalists on
June 19. The company’s payables reached nearly UAH 4 bln, while the value of
its net assets were negative UAH 1.4 bln as of end-2019, Sennychenko said, as
reported by the epravda.com.ua news site.

The company has yet to report its annual financials.
In 2019, it boosted power generation 17% yoy to 10.2 TWh. In 9M19, it reported
a 4% yoy decline in net revenue to UAH 10.90 bln, posted negative EBITDA of UAH
1.44 bln (vs. positive UAH 0.85 bln a year before) and net losses of UAH 1.49
bln (vs. UAH 0.49 bln profit a year before). Its payables swelled 3.9x YTD to
UAH 2.36 bln as of end-September 2019.

Recall, the State Property Fund, which owns 78.2% of
Centrenergo shares on behalf of the state, managed to replace acting CEO of Centrenergo in late May,
as a result of a “blizzard operation” that withstood enormous pressure
from insiders related to tycoon Ihor Kolomoisky.

Alexander Paraschiy: The
company’s weak annual result is not a surprise, given its poor interim
financials and low electricity prices in 4Q19. From Sennychenko’s estimates of
the company’s value, it looks like the fund is not going to prepare the company
for privatization any time soon, which is also in line with our view.
Meanwhile, taking into account that electricity prices on the wholesale market
are declining further from the levels of 4Q19, Centrenergo’s P&L is likely
to worsen further this year, regardless of who controls its operations.