DTEK Energy revenue rises 15%, EBITDA 94% in 9M17

Ukraine’s leading coal and power holding DTEK Energy
generated UAH 99.6 bln in net revenue in 9M17, a 15% yoy rise, according to its
report of abridged unconsolidated results released last week. Its EBITDA was
UAH 14.2 bln in 9M17 by Concorde Capital estimates, or a 94% yoy surge. Its net
loss improved to UAH 0.97 bln in 9M17 from UAH 10.75 bln a year before. Its net
CapEx amounted to UAH 5.17 bln, a 17% yoy increase. Its net debt decreased 4%
YTD to UAH 61.93 bln and net debt-to-LTM EBITDA ratio fell to 2.5x as of
end-September, down from 3.6x at the beginning of the year.

In U.S. dollar terms, DTEK Energy’s 9M17 revenue
improved 11% yoy to USD 3.76 bln and EBITDA advanced 87% yoy to USD 538 mln, we
estimate.

Alexander Paraschiy: The results are in line with our previous outlook that DTEK Energy
will generate about UAH 17.7-18.0 bln in EBITDA this year, meaning it will be
nearly flat compared to 2016. The only difference in 2017 from the last year is
that the holding’s EBITDA will have declined each quarter of 2017, while in
2016 it generated more than half of its annual EBITDA in the last quarter, due
to exceptionally high prices for electricity for its power plants in 4Q16. With
the latest electricity prices suggesting that DTEK Energy’s 2017 EBITDA could
be even better than our current estimates, we maintain our positive view on DTEKUA
Eurobonds.