Donbasenergo reports expectedly strong 1H14 results

Donbasenergo reports expectedly strong 1H14 results



28 липня 2014 года
Конкорд Капитал

Донбассэнерго (DOEN)


Power GenCo Donbasenergo (DOEN UK) reported a 3% yoy increase in net revenue to UAH 2.55 bln in 1H14, according to its July 25 filing. Its EBITDA increased 35% yoy to UAH 706 mln in 1H14. Its semi-annual bottom line advanced 34% yoy to UAH 621 mln, exceeding its annual result for 2013 (UAH 532 mln). In 2Q14 alone, Donbasenergo generated UAH 468 mln in EBITDA (+19% yoy, +96% qoq) and UAH 424 mln in net profit (+18% yoy, +116% qoq).



Alexander Paraschiy: As was the case in 1Q14 and should be in the future, the core driver of Donbasenergo’s 2Q14 profit growth was a generous surcharge to its electricity rates that is aimed at covering the costs of reconstruction of its power units, as approved by the government last year. The good news is that the surcharge’s contribution to the company’s EBITDA decreased in 2Q14 to 50%, vs. 98% in 1Q14, according to our estimates.



Most likely, the company will receive even more revenue from additional surcharges in 2H14, given that Donbasenergo had one of its two power plants damaged by warfare in June 2014. Meanwhile, we continue to treat the company as a potentially high dividend payer and remain bullish on its stock. A risky development is that the company’s second power station, Starobesheve TPP, is located very close to the Donbas warzone (though on territory that is controlled by the Ukrainian government, according to official reports of the National Security and Defense Council).

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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