Donbasenergo pays UAH 0.4 DPS, raises EBITDA 1.5x yoy in 2012

Donbasenergo (DOEN UK) shareholders approved a plan to distribute 30% of the company’s 2012 income in dividends at their March 21 AGM. The total dividend amount is UAH 9.29 mln, or UAH 0.393 per share, implying a yield of 1.9%.

Shareholders also approved the company’s financials with net revenue of UAH 4,648 mln (up 17% yoy) and EBITDA of UAH 252 mln (up 49% yoy). The company reported a visible 2.7% yoy decline in fuel cost per MWh of power produced in 2012, mainly on the lower price of coal supplied by state mines (which declined 10% since April 2012).

Shareholders also approved Donbasenergo’s earlier announced 2012 profit, or UAH 30.9 mln (vs. net losses of UAH 27.5 mln a year before). Shareholders voted not to consider the significant deals item.

Alexander Paraschiy: This was the first time that Donbasenergo was paid dividends over the last decade, so it is a positive development in itself. Despite the move being broadly anticipated, there was not 100% surety that the company would do it. The failure to approve the significant deals item is a negative surprise, although it is in line with the state policy to prevent any opportunity that might lead to a share buyback (refer to our Feb. 19 note).

The company’s UAH 274 mln in losses in 4Q12, as we initially expected, were caused by non-cash write-offs. So it demonstrated one of its best years operationally in 2012. Therefore, we remain bullish on Donbasenergo stock as it is one of few local “index stocks” that is delivering improvements in its operating and financial results.