DTEK Energy increases revenue 13%, EBITDA 22% in 1Q21

Ukraine’s leading coal and power holding DTEK Energy (DTEKUA)
increased its revenue 13% yoy to UAH 14.42 bln in 1Q21, according to its report
of abridged financials. The revenue growth driver was electricity revenue,
which was up 55% yoy as the amount of power generated for sale increased 44%
yoy (to 7.37 TWh) and the average achieved power price was up 8% yoy to UAH
1,399/MWh. At the same time, its sale of coal and coal concentrate decreased
12% yoy to 3.26 mmt in 1Q21 as the mining of ROM coal fell 23% yoy
to 4.38 mmt.

The company’s EBITDA increased 22% yoy to UAH 2.43
bln, Concorde Capital calculated, and the EBITDA margin improved 1.3 pp yoy to
16.9%. Its operating cash flow before working capital changes improved 30% yoy
to UAH 2.53 bln. Its net cash from operating activities increased 4% yoy to UAH
1.57 bln and net use of cash for investing activities increased 34% yoy to UAH
0.80 bln (including UAH 1.00 bln used for the purchase of PP&E and UAH 0.41
bln cash released from disposals – possibly due to the disposal of Dobropillia Coal).
DTEK Energy’s net debt stood flat YTD at UAH 57.59 bln as of end-March 2021.

Alexander Paraschiy: The
company’s profitability increase looks encouraging and it confirms our view
that risks for a new restructuring wave in the mid-term are small. At the same
time, we see its operating margin could have been better if it produced more
coal by itself. In particular, DTEK Energy reported it imported 0.73 mmt of
coal for its power plants in 1Q21, which is the highest import volume in the
last four years. That said, we see further potential for the company to
slightly improve its margin in case it increases self-sufficiency in its coal.