GenCos report weak margins in 1Q11

Ukraine’s three other traded pure electricity generators reported their 1Q11 financials yesterday, following the release of Dniproenergo (UX: DNEN UK) a day earlier. Yegor Samusenko: As we expected, the GenCos improved their margins sector-wide though they continued to post low margins in absolute terms. As in 2010, we expect the first quarter to be the weakest, while the second and third quarters should compensate for first quarter losses (and the fourth for Donbasenergo due to the technical specifics of its power units). For the whole year, we expect GenCos’ EBITDA margins to be in the positive single digits, with only Dniproenergo likely to break into the double digits, as the most of electricity price growth will be passed on to coal price appreciation. At Centrenergo, the only GenCos to decrease revenue, gas-fueled units were not utilized in 1Q, which led to a 4% decline in revenue.

 GenCo 1Q11 financial results, UAH mln
Net Revenue  y-o-y  EBITDA  margin    y-o-y
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Donbasenergo       1,005    33%  (52.1)   -5.2%  -7.1 pp
Centrenergo          1,450    -4%     1.9    0.1%     4.2 pp
Zakhidenergo        1,647    44%     6.4    0.4%     9.0 pp
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Source: Company data