DTEK Energy posts UAH 7.5 bln net loss in Q1 due to crisis in energy sector – report

DTEK Energy received a net loss of UAH 7.492 billion with revenue of UAH 12.78 billion in January-March 2020, the group said in its report released on Friday.

"The systemic crisis in the energy sector of Ukraine, which started in 2019, had a negative impact on the industry and business and influenced the company's performance," DTEK Energy CEO Dmytro Sakharuk said in the document.

"Artificial restrictions on electricity generators, manual regulation and interference in the energy market, as well as a slowdown in industrial production in the country, a lower electricity consumption and warm weather conditions destabilized the entire energy system of Ukraine, " he said.

The company does not provide comparative financial data for the first quarter of 2019, however, it indicates that if in the first quarter of 2020 the number of power units operating in the daytime and nighttime was reduced to 16 power units, then in the first quarter of 2019, some 27 power units operated in the daytime, and some 25 power units in the nighttime.

Another negative factor, according to the report, was a sharp drop in prices on spot electricity markets in Ukraine, namely, from January to March 2020, it fell by 30% due to a number of regulatory changes, such as decisions on the PSO structure, a buyer's price limit for Guaranteed Buyer and a pricing methodology in the balancing market.

As a result, power generation fell by 37.8%, to 5.1 TWh, and coal reserves reached 2.9 million tonnes in the first quarter of 2020, which is 80% more than in 2019.

In addition, the financial results were also affected by the weakening of the hryvnia because of the general global economic slowdown caused by coronavirus (COVID-19) outbreak.

According to the report, the company's gross profit amounted to UAH 1.43 billion, operating loss amounted to UAH 140 million, currency exchange losses amounted to UAH 6.16 billion.

DTEK Energy increased free cash from UAH 263 million to UAH 1.172 billion for the quarter.

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