Kyivenergo reports USD 93 mln net losses in 2008

According to preliminary data released by electricity company Kyivenergo (KIEN), its revenue grew 28% yoy to UAH 5.9 bln (USD 1.14 bln), while its EBITDA dropped to negative UAH 75 mln (USD 14 mln), and net loss amounted to UAH 488 mln (USD 93 mln). Alexander Paraschiy: The key reason for the company’s negative EBITDA is an increase in its bad debt provision by UAH 200 mln from eoy 2007: without this adjustment the company would have reported EBITDA of about UAH 125 mln (or about USD 24 mln, refer to our note on KIEN of Feb. 6, 2009); Kyivenergo’s reported EBITDA turned out to be USD 14 mln higher than we expected, mainly due to an unexpected decrease in the company’s bad debt provision compared to end-3Q08 by UAH 70 mln. We expect the company will report USD 24 mln in EBITDA in 2009.