DTEK Energo reports UAH 8.135 bn net loss in January-June 2016

DTEK Energo reports UAH 8.135 bn net loss in January-June 2016DTEK Energo, managing assets in coal production, heat generation and distribution of DTEK energy holding, saw a 61.5% fall in net loss in January-June 2016 year-over-year, to UAH 8.135 billion

The company said in a press release that the main contributors to net loss reduction were continued hryvnia devaluation, which resulted in exchange rate difference losses being 75% lower.

Revenue grew by 24.6%, to UAH 56.986 billion. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 75.6%, to UAH 3.171 billion.

The main contributors to the growth in revenue were higher sales of gas, third party coal sales in Ukraine and electricity sales to European markets.

EBITDA margin was 5.6% compared to 1.7% in H1 2015.

Capital expenditure grew by 16.1%, to UAH 2.176 billion.

The first six months of 2016 saw the continuation of the 2015 trend where the tariffs set for electricity supply did not fully cover its production cost.

In addition, the overdue debt of the state enterprise Energomarket for the electricity produced by the company in January-June 2016 increased by UAH 2 billion, aggravating our liquidity position even further. As of 1 July 2016, the total debt of Energomarket exceeded UAH 6.9 billion.

The other negative factors that had a material impact on the company’s performance were losses of the companies located in the non-controlled territory.

As of 30 June 2016, the company's loan debt was UAH 61,737 million.

Due to severely deteriorated liquidity, the company has started discussions on the long-term debt restructuring with its creditors earlier this year. After entering into a standstill agreement with the bondholders, the company formalised a standstill agreement with the banks on September 21, 2016, in order to create a stable platform to progress the long-term restructuring negotiations with all its creditors.

In addition, on September 22, 2016, DTEK Energy completed the deleveraging transaction involving a transfer of the company’s Russian assets along with $436 million of related debts outside the perimeter of DTEK Energy. The transaction has reduced DTEK Energy's debt amount by 17%, thus contributing towards the improvement of the company's financial position. The company expects to complete the long-term restructuring with its creditors within the coming months.
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