DTEK thermal plants boost power output 1.4x qoq in 3Q17

The thermal power plants of DTEK Energy (DTEKUA) generated 10.1 TWh of electricity in 3Q17, Concorde Capital estimated based on data provided by Energobiznes and Interfax-Ukraine. This is 39% higher qoq and 4% less yoy. DTEK’s share of electricity generated from scarce anthracitic coal amounted to 13% in the quarter, based on Concorde estimates, a decline from 29% a year ago but  more than 9% in the second quarter. Recall, DTEK lost control over all its anthracite-producing Ukrainian mines in March 2017 and now has to import anthracite. At the same time, it remains nearly self-sufficient in hard steam coal, which is now the key fuel for its power plants. 

 
The average achieved price of electricity supplied by DTEK’s power plants was UAH 1.41 / kWh, based on Concorde estimates on available production and price data. This is 23% more yoy but 11% less qoq.
In 9M17, DTEK’s thermal power plants generated 26.3 TWh of electricity, or 2% less yoy. Their average achieved electricity price was UAH 1.51/kWh in 9M17, or 41% more yoy. 

 
Alexander Paraschiy: The above estimates allow us to expect EBITDA of DTEK’s integrated coal and electricity business for 3Q17 at UAH 3.9-4.1 bln. Based on these conclusions, we upgrade our forecast of DTEK Energy’s 2017 EBITDA to UAH 17.7-18.0 bln (from UAH 14.0 bln), which will be nearly flat yoy in U.S. dollar terms. We maintain our bullish view on DTEKUA Eurobonds.