DTEK Energy power generation slides 4% in 9M18

Ukraine’s leading coal and power holding DTEK Energy
(DTEKUA) generated 27.51 TWh of electricity in 9M18, which is 4.0% less yoy,
according to Concorde Capital’s calculations based on sector-wide data provided
by Energy Ministry. DTEK’s power unit burning hard coal increased power
production 1.8% yoy to 22.25 TWh, while output at units burning scarce
anthracite coal fell 30% yoy to 3.13 TWh, we estimate. Its combined heat and
power plants produced 2.13 TWh in 9M18, or 9.2% less yoy. In September alone,
DTEK produced 2.62 TWh of electricity, or 26% less yoy.

Alexander Paraschiy: DTEK’s 9M18
power production fell because its competitors, Donbasenergo and Centrenergo,
boosted their output (95% and 52% yoy, respectively) from last year, when they
had coal supply problems. On top of that, DTEK’s Kyivenergo, which used to
operate two large Kyiv-based heat & power plants, halted their leasing as
of August 2018. With this loss of power generating assets, we see DTEK’s power
production will drop in 2018 by about 6% yoy to 37.5 TWh. The assets that DTEK
lost in Kyiv were loss-making, so the holding will only improve its profit
without them. We retain our neutral view on DTEKUA Eurobonds.