Zakhidenergo posts -9% EBITDA margin in 1Q

Zakhidenergo (UX: ZAEN UK) reported its 1Q10 financial results in a filing with the State Securities and Exchange Commission on Friday: its EBITDA margin was -9% in 1Q10 (down 6 pp yoy). The power generator posted negative EBITDA of UAH 98 mln (vs. UAH 29 mln in 1Q09) and net revenue of UAH 1.14 bln, down 9.9% yoy. Yegor Samusenko: Zakhidenergo was only GenCos to decrease electricity output in 1Q10: production fell by 16% yoy vs. sector growth of 15% yoy. This was due to the shortage of bituminous coal, which emerged in winter (100% of Zakhidenergo power units burn bituminous coal while most other GenCos work either on mix of other grades or  purely on anthracite). We expect top line growth for Zakhidenergo in 2010 to be lower than for the sector. Zakhidenergo’s margins in 1Q10 were in line with the sector, which suffered from a one-time hike in coal prices on January 1; we expect Zakhidenergo to improve its EBITDA margin to 2% in 2010E.