DTEK estimates imported coal needs at 8.5 mmt, asks regulator to help

Обзоры по компаниям и отраслям 13.10.2014 Ukrainian thermal power plants may need to import up to 8.5 mmt of coal to provide enough fuel for the current heating season, DTEK’s CEO Maxym Tymchenko told journalists at an Oct. 10 press conference. He estimated that imports will demand additional cash outflow from the sector of about UAH 3.7 bln this season, and the sector regulator should account for this amount while setting the tariff for power GenCos. Coal stockpiles the holding’s power plants – which consume anthracitic coal –are only enough for 10-20 days of operations, according to Tymchenko. The holding has used up all of its own liquidity reserves so it will be only able to finance coal purchases if it receives money from the wholesale market, which already owes DTEK UAH 1.8 bln for electricity purchased in 1H14. Alexander Paraschiy: As the biggest player on Ukraine’s power market, DTEK indeed suffers from non-perfect payments from the wholesale market operator. This would not be a problem for DTEK if it didn’t have to spend its liquidity for financing coal mines in the occupied territory of Donbas, which are working from stock only, as well as reserve finances to import coal. However, we do not believe the company’s liquidity problems to be very serious. Usually, the holding uses each autumn to make all its debtors repay and it usually works well. Nobody in the government wants to take the risk of leaving the country without electricity and heat before a new heating season starts, and all the regulators are usually much more cooperative with energy companies in late autumn as compared to any other season. Usually, the most active was its subsidiary Kyivenergo (in 2012 and in 2013). That’s why we can expect other statements and maybe some actions from DTEK aimed at making debtors and regulators become more cooperative.