Dniproenergo announces 1H08 results

Dniproenergo (DNEN: BUY) reported 1H08 financials: sales of USD 452 mln (+38% yoy); EBITDA of USD 33.5 mln (-55% yoy; EBITDA margin of 7.4%) and net income of USD 3.1 mln (-86% yoy; net margin of 0.7%). Alexander Paraschiy: According to the company’s management, the key factors that “spoiled” 1H08 financials were: an increase in expenses for equipment repairs in 2Q08 and a lag between fuel price growth and electricity tariffs in 1H08. At the moment, the company has almost doubled yoy its coal stockpiles, which, under the risk of coal price growth in the near future, will allow Dniproenergo to reap relatively cheaper fuel costs in 3Q08, and significantly improve its financials in the next quarter.