DTEK power generation falls 12% yoy in 5M16

Ukraine’s leading coal and utility holding DTEK Energy (DTEKUA) produced 15.07 TWh of electricity in 5M16, we calculated based on company-wide data provided by Energobiznes. This is a 12% decline yoy, or slightly better than in 4M16 (-13% yoy). DTEK’s thermal power plants burning anthracite coal boosted power generation by 77% yoy to 4.00 TWh in 5M16, while its other generating sources demonstrated a 25% yoy decline. In the same period, total electricity generation in Ukraine decreased 3% yoy to 62.9 TWh.

In May 2016 alone, DTEK produced 2.65 TWh of electricity (-7% yoy and +2% m/m), and its anthracite-burning power plants produced 0.81 TWh, which is a 99% yoy jump (and +25% m/m). Ukraine’s power generation decreased 4% yoy and 5% m/m to 10.86 TWh in May.

All the above data excludes power generation statistics for the occupied territory of Ukraine, where DTEK operates one of its nine thermal power plants.

Alexander Paraschiy: The month-on-month advance in power production by DTEK was caused by a significant decline in power generation by nuclear power plants in Ukraine (-9% m/m in May). Nuclear stations’ production plans for 2016 were downgraded that month, which suggests output at thermal power plants (including those of DTEK) will rise during the rest of the year. All this confirms our initial forecast that DTEK’s 2016 electricity production will decrease only slightly, by about 5%. We reiterate our neutral view on DTEK Energy Eurobonds.