Centrenergo posts -4% EBITDA margin in 1Q

Centrenergo (UX: CEEN UK) reported its 1Q10 financial results in a filing with the State Securities and Exchange Commission: its EBITDA margin was -4% in 1Q10, vs. -3% in 1Q09. The power generator posted net revenue of UAH 1.52 bln, up 54% yoy. Yegor Samusenko: As with other GenCos, Centrenergo’s negative profitability in 1Q10 was the result of a 10% hike in coal price (its main input) since January 1, while average electricity tariff growth in 1Q10 was only 5%. Centrenergo’s results are better than those posted by Donbasenergo, because the company started receiving an investment allowance for power unit modernization in late 2009. We expect coal prices to be flat until yearend, as announced by the state, while electricity prices are set to grow. We forecast Centrenergo’s EBITDA margin to reach 5% in FY2010.