Analyst: “We expect DTEK Energy’s power plants will underperform in 2018 to produce about the same amount of power as in 2017, while they have a chance to get a higher increase in the average power price than foreseen by the plan (up 16% yoy). So far, we remain neutral about DTEKUA bonds.
KYIV, Mar 6, 2018 - The power plants of DTEK Energy (DTEKUA) generated 3.95 TWh of electricity in January, Concorde Capital informed clients today according to sector-wide information provided by the Energy Ministry. This is 8% less yoy and 19% below the ministry’s plan as stipulated by the Energy Balance for 2018. The power plants of other generation companies performed better yoy and above plan in January Centrenergo (CEEN UK) produced 0.97 TWh (up 8% yoy) and Donbasenergo (DOEN UK) produced 0.36 TWh (up 38% yoy). But due to DTEK’s under-performance, all Ukrainian thermal power plants generated 2.8% less power yoy and 14.2% below their January plan, or 4.76 TWh. Total power generation in Ukraine (including hydro and nuclear) was 14.62 TWh, or 3.4% less yoy and 2.7% below plan. Concorde analyst Alexander Paraschiy added: “The forecasted average electricity price at the wholesale market was based on a higher share of expensive power generated by coal-fired thermal plants. In this way, the average forecasted price is artificially inflated, which is beneficial for companies like DTEK. Whenever the actual share of thermal power plants in the total power mix is below the ministry's plan, they can expect a higher individual power price (as compared to plan) given that the average power price in the sector is in line with the ministry's forecasts. In this way, companies like DTEK are able to achieve a higher price for their electricity, as compared to plan. That said, we expect DTEK Energy’s power plants will underperform in 2018 to produce about the same amount of power as in 2017, while they have a chance to get a higher increase in the average power price than foreseen by the plan (up 16% yoy). So far, we remain neutral about DTEKUA bonds. ### For more information, link here: www.concorde.ua
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