Zakhidenergo improves profitability in 3Q12

DTEK Zakhidenergo (ZAEN UK) posted a 12% qoq increase in IFRS-based revenue on roughly 20% qoq growth in power production in 3Q12. COGS growth, by just 15% qoq, as well as a decrease in SG&A costs allowed the company to improve EBITDA for the quarter 26% qoq to UAH 414 mln, and post 9M12 EBITDA of UAH 425 mln. Net income for 9M12 amounted to UAH 237 mln, 2x below the UAS-based profit reported a year before.  

Alexander Paraschiy: Like for Dniproenergo (DNEN UK), the profitability of Zakhidenergo is a sort of a random variable depending on coal prices set by parent DTEK. Given the company’s massive CapEx programs, we expect DTEK will continue redistributing profit to the benefit of Zakhidenergo in the coming quarters.