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DTEK Consolidated audited Financial Results for the Full Year ended December 31, 2008

Thursday, June 4th, 2009

DTEK, the fuel and energy industry leader in the Ukraine today announces its consolidated audited financial results for the full year ended December 31, 2008.
Key financial highlights:
o Consolidated revenue increased 44.6% to 12,969m. UAH (2007: 8,969m UAH)
o Gross profit increased 50.8% to 3,048m UAH (2007: 2,021m UAH)
o Gross Profit margin increased to 23.5% (2007: 22.5%)
o Net profit decreased from 1,193m UAH to 119m UAH principally due to the company’s foreign-currency debt revaluation. This resulted in non-cash foreign exchange losses of 1,307m UAH
o Adjusted¹ net profit from continuing operations increased 66.4% to 1,985m UAH (2007: 1,193m UAH)
o Adjusted net profit margins from continuing operations increased to 15.3% (2007: 13.3%)
Operational highlights:
o DTEK’s share of Ukraine total coal production increased to 22.6%.
o Coal production volumes increased by 11.4% to 17.6m tonnes.
o Thermal coal production volumes increased by 10% to 14.5m tonnes.
¹Adjustments done for Net foreign exchange loss on non-operational activities, revaluation of property, plant and equipment and past service cost arose as a result of changes in 2008 in the pension legislation, which increased the benefits payable
o Continued progress was made in the implementation of large-scale projects such as methane drainage and utilisation at the Komsomolets Donbassa mine as well as the installation of new equipment at Pavlogradugol.
o DTEK maintained its leadership position in the Ukrainian thermal generation sector with 47.5% of market share, including results of an affiliate company Dneproenergo².
o The 7 year modernization program of the generating units was launched with current investment of 305m UAH (approximately US$40m). This will update the power generating units at the Kurakhovskaya and Zuevskaya plants.
o DTEK’s Ukrainian wholesale electricity market share increased from 5.4% to 6.5% in 2008.
o Record-low network losses of 1.6%
²DTEK owns 47,5% shares of Dneproenergo
Post period end:
o The installed capacity of unit No.2 at Zuyevskaya TPP (Vostokenergo, DTEK) was increased from 300 to 315 MW
o Fitch Ratings upgraded the company’s national long-term rating from ‘АА-’ to ‘АА+’ with a ‘Stable’ outlook
Commenting on the results Maxim Timchenko, Chief Executive Officer of DTEK, said:
“I am pleased to report DTEK’s solid 2008 financial results. Despite a challenging economic environment we have achieved everything we had planned at the beginning of the year. We have demonstrated strong growth in all three business lines and progressed further in our goal of strengthening our position as one of leading energy companies in Europe.
“All three of our business segments demonstrated a strong performance in 2008. We have increased our coal production volumes by 11.4% and DTEK’s share of Ukraine total coal production has increased to 22.6%. We have retained our leadership position with 47.5% market share of Ukrainian thermal generation market, including results of our affiliate company Dneproenergo, and we have increased our wholesale electricity market share from 5.4% to 6.5%.
In 2008 we have achieved growth in almost all of our key performance indicators: consolidated revenue increased 44.6% to 12,969m UAH; adjusted net profit from continuing operations increased 66.4% to 1,985m UAH; our annual average total assets increased 42% to 15,736m UAH; and our return on assets increased to 12.6%.
We expect 2009 to be a challenging year for DTEK. slowdown of Ukraine’s economy will dampen domestic electricity demand and coal demand will also decrease. However we will continue to extend the geographical reach of our coal and electricity sales whilst keeping strong control over our costs. We expect 2009 production costs to remain stable in comparison to 2008.
We are confident that DTEK’s vertically integrated business model, the unique geographical location of its main production units, and the skills and experience of our professional management team will help us to overcome market turbulence and provide value for our shareholders in 2009 and beyond.”
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