DTEK Energy dollar EBITDA rises 24% in 2017

Net revenue at Ukraine’s leading coal and energy holding
DTEK Energy (DTEKUA) rose 10% yoy to UAH 141.0 bln, according to its abridged
non-audited financials released last week. Its EBITDA improved 29% yoy to UAH
23.0 bln, according to Concorde Capital estimates, while its net loss amounted
to UAH 2.9 bln. The result implies in 4Q17 alone, DTEK Energy generated UAH
41.4 bln in net revenue (rising 34% qoq, flat yoy) and UAH 8.8 bln in EBITDA
(jumping 92% qoq, down 16% yoy).

In dollar terms, the holding’s 2017 revenue increased
6% yoy to USD 5,300 mln and EBITDA grew 24% yoy to USD 865 mln, according to
Concorde Capital estimates.

The holding’s end-2017 net debt remained flat yoy at
UAH 64.6 bln, and its net debt-to-EBITDA ratio improved to 2.8x from 3.6x a
year before.

Alexander Paraschiy: DTEK’s
results beat our expectations (we saw 2017 EBITDA flat yoy in USD terms), and
so far it is hard to say what caused such an increase (possibly, the company’s
P&L has changed due to consolidation of coal machinery
assets since late 2017, which were owned by DTEK’s parent
holding before). In our view, it will be hard for the holding to keep EBITDA at
the 2017 level this year, so we continue to forecast a decline in its
profitability in 2018. We are also keeping our neutral view on DTEKUA bonds.