DTEK reports further decline in production in 1Q15

DTEK reports further decline in production in 1Q15



15 червня 2015 года
ICU

In its 1Q15 production results released last Friday, DTEK announced that coal mining declined 18% QoQ and 35% YoY to 6.8mt, electricity generation fell 13% QoQ and 15% YoY to 10.8TWh, and electricity transmission volumes dropped 12% QoQ and 18% to 12.2TWh. Also in 1Q15, DTEK reduced its exports of electricity by 20% QoQ and 60% YoY to 0.8TWh, and coal by 38% QoQ and 78% YoY to 0.3mt, while the company's imports of coal declined 24% QoQ to 0.4mt.

Investment implications: DTEK's 1Q15 electricity generation was impacted most negatively by production disruptions at Zuivska TPP, a thermal power plant located in the separatist-occupied territories, with a 53% YoY decline, and at Luganska TPP , which is located at the battle frontline, with a 69% YoY drop. Likewise, DTEK's coal mines in separatist-occupied territories reduced their 1Q15 production by 84% YoY versus a 4% YoY production increase at mines in Ukraine-controlled areas, according to Energybusiness. As a result of destroyed logistics operations and the isolation of separatist-occupied territories, DTEK's coal production may fall 20-25% and power generation may decline 15-20% in 2015, with high risks of declining even more severely should combat activities intensify. The sharp decline in export volumes may further decrease the share of exports in total revenues from 10% in 2014 and thus enhance DTEK's exposure to negative impact from the hryvnia devaluation.

Источник: ICU

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