DTEK Group cuts power generation, coal mining 6% in 9M17

2017/11/30 23:53:13

Analyst: “…we confirm our EBITDA estimate of DTEK Energy at UAH 17.7-18.0 bln in 2017. We remain bullish on the holding’s Eurobonds. We also warn that key risk for DTEK Energy now is on the regulation side – its well-being in early 2018 will depend much on the ability of Ukrainian power brokers to unfreeze the work of the NERC, Ukraine's power sector regulator.”

 


KYIV, Nov 30, 2017 - Coal mining at DTEK Group, the parent company for DTEK Energy (DTEKUA), fell 5.8% yoy to 21.0 mmt in 9M17, Concorde Capital informed clients based on DTEK’s operating update released on Nov. 29. It supplied 26.86 TWh of generated electricity, a 6.1% drop yoy. The group halved yoy coal exports to third countries (outside Russia and Ukraine) by 0.58 mmt. DTEK’s gas E&P subsidiary produced 1.24 bcm of natural gas in 9M17, a 2.9% yoy rise.

 

The assets currently consolidated by DTEK Energy mined 16.94 mmt of coal (a 10.5% yoy rise) and supplied 26.41 TWh of generated electricity (-6.4% yoy) in 9M17. DTEK Energy’s grid companies transmitted 31.78 TWh of electricity (a 5.3% yoy drop). It increased power exports from Ukraine 45% yoy to 4.04 TWh. It imported 1.34 mmt of coal to Ukraine in 9M17, up from 0.01 mmt a year ago. Part of the imported coal (0.53 mmt) came from a related Russian mine.

 

Concorde analyst Alexander Paraschiy added: “There is little new information in DTEK’s operating update, except the exact amounts of coal imports and exports. The provided data suggests that DTEK’s Russian coal mine is still continuing to supply most of coal outside Ukraine, even though DTEK’s Ukrainian power plants suffer from a deficit of anthracite's coal. That makes sense only in case DTEK’s Russia-mined coal gets better pricing elsewhere than the coal that DTEK has to import from South Africa and the U.S.

 

“In any case, we confirm our EBITDA estimate of DTEK Energy at UAH 17.7-18.0 bln in 2017. We remain bullish on the holding’s Eurobonds. We also warn that key risk for DTEK Energy now is on the regulation side – its well-being in early 2018 will depend much on the ability of Ukrainian power brokers to unfreeze the work of the NERC, Ukraine's power sector regulator.”

 

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For more information, link here: www.concorde.ua

 

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