Kyivenergo doubles LBITDA, net loss in 1H12

Kyivenergo (KIEN UK), an integrated utility company, reported a 38% yoy increase in net revenue to USD 542 mln in 1H12. On sticky heating tariffs and increased gas prices, the company posted 107% yoy growth in negative EBITDA (to USD 86 mln) and  98% yoy increase in its net loss (to USD 98 mln).

Alexander Paraschiy: The company’s weak financials should have a negative effect of 1H data of its new parent, DTEK (DTEKUA). Though, Kyivenergo’s 1H results are not indicative anymore as the company is awaiting compensation from the city of Kyiv’s budget for inefficient heating tariffs: as we wrote before, the budget foresaw UAH 2.23 bln (USD 280 mln) in compensation for Kyivenergo’s past losses. In late June, Ukraine’s Cabinet of Ministers ordered that amount be transferred to the city and we expect the company will get it on its account soon, allowing it to post an exceptionally high bottom line in 3Q12.