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DTEK: THE LEADER IN UKRAINIAN
COAL & ENERGY MARKETS

SEPTEMBER 2011
CONTENTS

 DTEK at a glance

 Ukrainian energy market overview

 Operations

 Financials

 Back-up




                                     2
LARGEST PRIVATE VERTICALLY INTEGRATED ENERGY COMPANY IN UKRAINE




                                                                                                            Power
             Coal production                         Thermal power generation
                                                                                                         supply & sales

    Share in coal mining in Ukraine              Share in power generation in Ukraine¹           Share in power supply in Ukraine²


                                                                      11,5%
                                                            18,8%                                                        DTEK
                                                                                                                         8.0%

                         DTEK                                                DTEK                                          12.0%
                         28.1%                           18,7%               27.3%


                                                                  23,7%
                                                                                     DTEK
                                                                                     Dneproenergo
                                                                                     Zapadenergo                        DTEK
                                                                                     Centrenergo                        Affiliated with DTEK
                                                                                     Donbassenergo                      Other

1 As   of 30.06.2011, DTEK owns 47.55% of Dneproenergo, 39.98% of Kievenergo and 25.06% of Zapadenergo    Source: DTEK. The Main Data Processing
2                                                                                                         Center of NPC Ukrenergo
    As of 30.06.2011, DTEK owns 30.6% of Donetskoblenergo and 39.98% of Kievenergo                                                                 3
LONG-TERM GOALS




Fuel:

 Coal mining > 50 m t                             Energy
 Gas production > 3 bn m3


                                        Society                 Consumers
Power Generation:

 Thermal generation > 16 Gwt
 Renewable energy sources > 1 Gwt


                                        People                 Ukraine “Plus”
Power Supply:

 Electric power supply > 60 bn Kwt h
                                                  Efficiency
 Thermal power supply > 15 000 Gcal




                                                                                4
STRONG PROFIT GROWTH

Revenue, EBITDA and Net Profit, UAH mln




               Revenue                EBITDA            Net profit                                                                    Revenue growth drivers:
 30000                                                                                                                                - Volumes + 3 539 mln
                                                                                                                                      - Prices & Mix +1 883 mln
                                                                                                                24 294                - Exports + 2 405 mln
 25000



 20000                                                                                                                                                 18 453

                                                                                           15 009
 15000
                                                                        12 969
                                                                                                                                     10 625
 10000                                                  8 969

                                                                                                                     6 141
                                 5 049                                                                                                                      5 068
  5000    3 784                                                              3 457              3 565
                                                            2 425                                                            2 857        2 643                 2 201
                  777 268              1 257                     1193                                     856                                  1 288
                                               493                                   119
     0
                2005                   2006                 2007            2008               2009                 2010                1H 2010           1H 2011
 YoY growth:

         REVENUE                         +33%                   +78%         +45%              +16%                 +62%                                    +74%

         EBITDA                          +62%                   +93%         +43%                   +3%              +72%                                   +92%

         NET PROFIT                      +84%                   +142%        -90%               +619%                +234%                                  +71%

 All figures for 1H 2011 are actual      Source: DTEK                                                                                                                   5
CONTENTS

 DTEK at a glance

 Ukrainian energy market overview

 Operations

 Financials

 Back-up




                                     6
POWER GENERATION MARKET

      Thermal power plants are the only generation assets in Ukraine with available capacity to meet mid-
      term electricity consumption growth

        Breakdown of Ukraine’s electricity production, gross           Power plants output to WEM, TWh

                                                    Nuclear              Nuclear Power Plants                            41, 5
                                                     47%

               Others                                                   Thermal Power Plants                         32 ,6
                9%

                                                               Combined Heating Power Plants              7,5
             Hydro
              7%
                                                                          Hydro Power Plants           6 ,2


                                                                Non-conventional Power Plants       0,2
                                     Thermal
                                      37%

                         Installed capacity, MWt                        Installed capacity utilization, %

   Thermal & Combined
                                                     33 774
   Heating Power Plants                                                  Nuclear Power Plants                                73


   Nuclear Power Plants                    13 835                Thermal & Combined Heating
                                                                                                                31
                                                                        Power Plants


      Hydro Power Plants           5 458                                   Hydro Power Plants                   27



* All figures are 1H 2011 actual                                          Source: DTEK, Main Data Processing Centre of NPC Ukrenergo   7
THERMAL POWER GENERATION MARKET


              GenCos share of thermal power generation, %                                        GenCos output to WEM, TWh

                                                    Vostokenergo
                                                        27%                                       Vostokenergo                                 8,9


          Centrenergo                                                                             Dneproenergo                               7,8
             19%

                                                                                                    Centrenergo                        6,2
                                                                  Dneproenergo
                                                                      24%                          Zapadenergo                         6,1
       Donbassenergo
           11%
                                                                                                 Donbassenergo                 3,7
                                                  Zapadenergo
                                                     19%
                      GenCos installed capacity, MWt                                         GenCos Average tariffs, kop/ kWt h

              Dneproenergo                                4651*                  60,00
                                                                                                                                                     53,33
                                                                                                                                        44,80
               Zapadenergo                                4650
                                                                                 40,00                               33,24     36,75

                Centrenergo                                                                                 24,89
                                                          4600**                                   20,9
                                                                                 20,00   17,26
               Vostokenergo                            4157
                                                                                  0,00
            Donbassenergo                      2705                                      2005     2006      2007     2008      2009      2010 1H 2011




* Dnepronergo’s installed capacity is net of suspended oil & gas power units,     ** Centrergo’s installed capacity is net of suspended oil & gas power units,
and out of service units (8185 MWt including all units)                            (7600 MWt including all units)


  * All figures are 1H 2011 actual                                                                  Source: DTEK, the Main Data Processing Center of NPC Ukrenergo   8
UKRAINIAN ENERGY CONSUMPTION TRENDS

  Electricity demand is expected to grow at CAGR +3.7% in 2011-2020. In the mid-term (2011-2015) industry
  electricity consumption is expected to grow at CAGR +2.8%. Households demand should outperform the industrial
  sector with CAGR +6%, coming from the lowest in Europe electricity consumption per capita levels.



                                    Electricity consumption by categories, Mwh



                                                                                                  158 689
                                         148 528      147 893                147 483
                          143 463                                134 506                                            Households
       137 922
                                         29 011      31 920                                       39 382
                           28 276                                                                                   Other non-industrial consumers
      26 444                                                                     37 674
                                                                  34 396
                                                                                                                    Commercial households

                                                                                                                    Construction

                                                                                                                    Transport

      77 866               79 761        82 508                                                   78 351            Agriculture
                                                     77 244                  71 517
                                                                 63 985
                                                                                                                    Industry


        2005                2006          2007        2008        2009           2010             2011e




All figures are 1H 2011 actual                                                     Source: DTEK. National Electricity Regulatory Commission of Ukraine (NERC)
                                                                                                                                                                9
HOUSEHOLD TARIFFS ARE AMONG THE LOWEST IN EUROPE

      Average households electricity rates in Europe, €/ Kwh

                                                                                       The average household tariff for the EU-27 is 0,16
    Ukraine min             0,025              below 150 kWt per month                  €/Kwh. with the striking difference to Ukraine at
                                                                                        0,025 - 0,033 €/Kwh.
   Ukraine max                                 above150 kWt per month
                              0,033                                                    To bring Ukrainian tariffs to an economically
                                                                                        justified level a four-fold increase is needed.
           Russia                      0,08

        Romania                           0,11

            Latvia                            0,11

        Lithuania                               0,13
                                                                                           Tariff Growth in Ukraine, kop/kWh
          France                                 0,14
                                                                                                Industrial, 1st class
          Finland                                    0,15                                       Industrial, 2nd class
                                                                                                Households, consumption to 150 kWh
                                                                                                                                                      78,4
          Poland                                     0,15                           80,0

                                                                                    70,0
United Kingdom                                        0,15                                                    61,0                                   61,3
                                                                                                                                 66,8
                                                                                    60,0
         Hungary                                        0,17                                                    45,9
                                                                                    50,0
                                                                                                                                  51,6
                                                                                                 48,3
         Slovakia                                           0,17                    40,0
                                                                                                  36,1                                               28,0
           Austria                                                 0,20             30,0
                                                                                                                 21,9
                                                                                    20,0
        Germany                                                                                   21,9                            21,9
                                                                          0,26
                                                                                    10,0
        Denmark                                                              0,29             2008           2009            2010                2011E

Source: Europe‟s Energy portal, DTEK                                                                                      All figures are 1H 2011 actual
                                                                                                                                                             10
UKRAINIAN COAL AND GENCOS CONSUMPTION

Coal remains by far the most important fuel for Ukrainian thermal GenCos, accounting for 96% of
their total fuel (natural gas accounts for 4%).


          Coal consumption by GenCos, in concentrate, G,DG,T,A grade, thousand tonnes
          Thermal and anthracite coal mining, in concentrate, G,T,A grade, thousand tonnes
          Average yearly coal price, per tonne, in concentrate (ash 23%, wet 8.9%)

  40000                                                                                                                                  800
                                                                                                                           776
  35000
                                                                                                                 593
  30000                                                                                                                                  600
                                                                                           528
  25000                                                                    456
  20000                                                                                                                                  400
                                                           330
  15000
                     222             263
  10000                                                                                                                                  200



                                                                   34972
             25873




                             32166




                                                   35359




                                                                                   27458




                                                                                                         30467




                                                                                                                         34677
                     31785




                                     30861




                                                           29318




                                                                           31344




                                                                                           29502




                                                                                                                 28830




                                                                                                                                 32197
   5000

      0                                                                                                                                  0
              2005            2006                  2007            2008            2009                  2010           2011E


     DTEK is a vertically integrated energy company in Ukraine with complete production chain
     from coal mining to electricity generation and supply. Today DTEK fully covers the needs of
     its thermal power generation with its own coal.




                                     Fuel supply                   Power plant                     Distribution

                                                                                                                                               11
CONTENTS

 DTEK at a glance

 Ukrainian energy market overview

 Operations

 Financials

 Back-up




                                     12
1H 2011: СOAL PRODUCTION

     DTEK runs some of the most efficient and high quality mines in Ukraine, maintaining constant focus
     on enhancing operations and cost efficiency.

                ROM output,                                Labor productivity,                                              Cost of production,
                kTonnes*                                 Tonne per month/ worker*                                           UAH/ Tonne*
                                                                          Average 57                                                          Average 350
        Pavlogradugol                      7812         Komsomolets                                         Komsomolets Donbassa                      288
                                                                                                 90
                                                         Donbassa
      Rovenkiantracite             3834
                                                    Krasnoarmeyskaya                             90                     Pavlogradugol                 305

    Krasnoarmeyskaya              3245                  Pavlogradugol                       76                      Sverdlovantracite                    309

     Sverdlovantracite            3241               Sverdlovantracite                 60                            Rovenkiantracite                    376

       Krasnodonugol          2896                    Rovenkiantracite             50                                 Dobropolyeugol                        384


Komsomolets Donbassa        2060                       Krasnodonugol              46                              Krasnoarmeyskaya                             467


                                                      Dobropolyeugol         31                                         Krasnodonugol                             518
       Dobropolyeugol      1563


         DTEK coal mining growth, kTonnes
            11 127                        11 435
                           +2,7%

              1413         +10,6%          1563
                                                            Dobropolyeugol                            *Dobropolyeugol   is consolidated as of January 4th 2011
              2036         +1.2%           2060
                                                                                                       All figures are 1H 2011 actuals . Source: DTEK, company data
                                                            Komsomolets Donbassa


              7678         +1.7%           7812
                                                            Pavlogradugol



            1H 2010                       1H 2011                                                                                                                       13
1H 2011: THERMAL POWER GENERATION

        DTEK’s TPPs are among the most efficient on Ukrainian power generation market. Vostokenergo’s
        TPP`s have highest production volumes and capacity utilization rates.

         Production volumes, TWh                      Capacity utilization rate, % *               Fuel consumption,           WEM tariffs by GenCos**,
                                                                                                   Gr / kWh                    kop / kWh



        Vostokenergo                        9, 786 Vostokenergo                       54 Dneproenergo         378,9           Zapadenergo              59




       Dneproenergo                       8 ,476    Dneproenergo                   42*     Vostokenergo       380,7          Vostokenergo           55




                                                   Donbassenergo                 35          Centrenergo         397,2       Dneproenergo          52
         Centrenergo                   6, 730




                                                      Centrenergo                34***      Zapadenergo           403,1
        Zapadenergo                    6, 703                                                                                 Centrenergo          51




                                                     Zapadenergo                33       Donbassenergo                417,8 Donbassenergo
     Donbassenergo                 4, 132                                                                                                         47



  * Dnepronergo’s ICUR is given net of suspended oil & gas power units and out of service units
  (21.84% including all units)
  ** Investment mark-up is not included
  ***Centrergo’s ICUR is given net of suspended oil & gas power units,
   (20,4% including all units )

All figures are 1H 2011 actual   Source: DTEK, the Main Data Processing Center of NPC Ukrenergo                                                             14
1H 2011: POWER SUPPLY


         Electricity transmission & sales, Mwh                            Nominal vs. Actual transmission losses, %


                                                                       Nominal transmission losses, %                 Actual transmission losses, %
     Dneprooblenergo                                     11 438
                                                                                                                                                 16,6
                                                                           Krymenergo
                                                                                                                                                16,1
         Service-Invest                          6 525
                                                                                                                                                     17,5
                                                                      Donetskoblenergo
                                                                                                                                              15,6
Zaporozhyeoblenergo                      4 182                                                                                                       17,7
                                                                      Odessaoblenergo
                                                                                                                                       13,8

                     LEO                 4 119                                                                                    12,6
                                                                                  LEO
                                                                                                                                    13,6

                                                                                                                                             14,8
    Donetskoblenergo                     4 057                        Kharkovoblenergo
                                                                                                                                      13,1

                                                                                                                           9,8
             Kievenergo                  4 038                     Zaporozhyeoblenergo
                                                                                                                           9,8

                                                                                                                               11,0
                                                                            Kievenergo
    Kharkovoblenergo                3 349                                                                                8,9

                                                                                                                         8,8
                                                                  DTEK Energougol ENE
     Odessaoblenergo                                                                                                   8,0
                                   2 790
                                                                                                                6,3
                                                                      Dneprooblenergo
                                                                                                          5,0
            Krymenergo           1 996
                                                                                                    2,3
                                                                         Service-Invest
                                                                                              1,0

                                                                                       Source: National Electricity Regulatory Commission of Ukraine (NERC)
All figures are 1H 2011 actual                                                                                                                                15
1H 2011: COAL & ELECTRICITY EXPORTS

    DTEK is the largest privately-owned exporter of coal and electricity in Ukraine with ambitious plans to increase
    export volumes.

Coal export revenue grew from USD 65 mln
(1H 2010) to USD 231 mln (1H 2011)*                                                                                 Electricity export
demonstrating 253% growth
                                                                                                                    Coal export
 Coal export breakdown, thousand tonnes



                            183%                                         OTHER – 0.27
                                          1 865                           mln tonnes

                   658
                                                                                                 Belarus

                 1H 2010                 1H 2011                                  Poland



Electricity export revenue grew from USD 14
mln (1H 2010) to USD 146 mln (1H 2011)*
                                                                  EUROPE – 1.05     Slovakia        Moldova
demonstrating 934% growth                                          mln tonnes
                                                                                  Hungary
   Electricity export, mln KWh                                                                 Romania



                                                                                                 Bulgaria
                         738%
                                       2 138                                                                         Turkey
                255                                                                              MEDITERRANEAN
                                                                                                   and AFRICAN
              1H 2010                 1H 2011                                                    COUNTRIES – 0.16
                                                                                                    mln tonnes

*Using   NBU exchange rate as of 30 Jun 2011 – 8,10 UAH per USD
                                                                                                                                         16
POWER PLANTS MODERNIZATION

                              Vostokenergo.                                            Vostokenergo.
                             Kurahovskaya TPP                                         Luganskaya TPP




                              Unit-by-unit retrofit                                   Unit-by-unit retrofit
                          (200+222+225+4х 210 MWt)                                 (3х175+ 4х200+ 100 MWt)
                   Dismantling of the boiler, turbine, generator,        Dismantling of the turbine, generator, Automated
Modernization
                    Automated Process Control System, and                  Process Control System, and scrubbers completed
results
                    electrostatic precipitator completed                  New equipment: full turbine upgrade (Turboatom,
                   New equipment: Ovation (Emerson) software-             Power Machines), Ovation (Emerson) software-
                    technical unit for upgrading the Automated             technical unit for upgrading the Automated Process
                    Process Control System                                 Control System
                   New transformer, thyristor excitation system (АВВ)    New starter for the generator installed
                    installed                                             By the end of 2011, one block will be reconstructed.
                   Two blocks have been reconstructed so far. By the      By the end of the program in 2016, modernization of
                    end of 2011, the modernization of one more block       five energy blocks will be finished.
                    will be finished. By the end of program in 2016,
                    four more energy blocks will be reconstructed.


Investments                                                              USD 22, 420 mln
                  USD 72, 778 mln
2008-1H 2011

                  Project start – April 1, 2008                          Project start - October 12, 2009
Timelines         Expected completion (Management‟s view) –              Expected completion (Management‟s view) –
                  November-December 2016                                 November-December 2016
                                                                                                                                  17
AMBITIOUS CAPEX PLANS

      Total Capex, USD mln*                                                                         Capex Coal mining, USD mln*
700                                                                                           300                                     281           278
                                          572                                                                           263                                       261
600                                                       556                                                                         49
                                                                                              250
                                                                                                                        45                           56
                          486             22              24                                                211                                                    63
500
                          22                                              420                 200
                                                                                                            39
            371
400                                       254             238              21                                                        139
                                                                                              150                       128                         144
             28           186                                                                                                                                     116
300                                                                       122                               103
            118                                                                               100
200
                                                                                               50                       90            93
                          263             281             278             261                               69                                       78            82
100         211
                                                                                               0
  0                                                                                                        2011E       2012E        2013E          20114E        2015E
           2011E        2012E      2013E                2014E           2015E
                Coal      Power generation             Distribution                                     Mining development      Equipment purchase          Major overhaul


           Capex Power generation, USD mln*                                                               Capex Power distribution, USD mln*
           Partially funded via tariff investment mark up                                                 Fully funded via tariff investment mark up
  300
               Other   Modernization             Including investment mark-up                   40
                                                254
  250                                                          238                                                            Grid modernization     Other
                                                32                                              30           28
                               186                             27
  200
                                                                                                              3                                      24
                                31              212                                                                     22             22                          21
                                                                                                                                                      2
  150          118                                              201              122            20                       3              2                           2

  100             33                                                             25
                                155                                                                          25
                                                                                                10                                     20            22
                                                                                                                         19                                        19
      50                                                                         96
                  85

       -                                                                                            0
              2011E          2012E             2013E           2014E            2015E                       2011E      2012E         2013E         20114E        2015E

 * For comparison, UAH values of exact planned CAPEX are converted into USD at UAH 7.91/USD
                                                                                                                                                                             18
CONTENTS

 DTEK at a glance

 Ukrainian energy market overview

 Operations

 Financials

 Back-up




                                     19
OUTSTANDING FINANCIAL PERFORMANCE


     Revenue, UAH mln                                               EBITDA, UAH mln
     25 000                                                         8 000


     20 000                                     74%
                                                                    6 000
                                                                                                              92%
     15 000

                                 24 294                             4 000
     10 000
                                                         18 453                          6 141
                   15 009                                                                                            5 068
                                                                    2 000
      5 000                               10 625                                3 565
                                                                                                       2 643

          0                                                            0
                    2009         2010     1H 2010        1H 2011                2009     2010      1H 2010          1H 2011




        Net profit, UAH mln                                          Net operating cashflow, UAH mln
                                                                     4 000
        3 000


                                                   71%               3 000                                 203%
        2 250



        1 500                                                        2 000
                                  2 857
                                                           2 201                         3 235                       2 993
          750                                                        1 000       2 146
                                            1 288
                       856
                                                                                                        987
              0                                                             0
                      2009         2010   1H 2010         1H 2011                2009     2010     1H 2010          1H 2011


All figures are 1H 2011 actual
                                                                                                                              20
EBITDA GROWTH MAIN DRIVERS




                                                 2 199




                                                                                              1H 2011, actuals 2010,
                                                              (-) 5 373




                                                                                                 1H 2010, fact
    1H 2010, actuals




                                                                                                      fact
                                       5627




                                                                             30




                       2 643         Volumes    Price/Mix   Cost of Sales   Other   5 068,0




All figures are 1H 2011 actual
                                                                                                                       21
HEALTHY DEBT PROFILE


          Loan portfolio, USD mln                                    Loan maturity profile*, USD mln

    800
                                                                   600
                                                691                                                                            524
                                                             604
    600                          554
                                                                   450
                485

    400                                                            300




    200                                                            150

                                                                                                                 48
                                                                          9        20               7
      0                                                             0

               2008              2009           2010     1H 2011         2011     2012           2013           2014          2015




                      Debt currency profile, USD mln                 Loan portfolio by types of financing, USD mln

                                                       EUR
                                                                                                                      ECA financing
                                    8%    10%          USD                               8%     10%                   Eurobond
                                                       UAH
                                                                                                                      Credit lines




                                        82%
                                                                                              82%




                                                                                         *   Undiscounted principal amount repayment
All figures are 1H 2011 actual
                                                                                                                                       22
LOW LEVERAGE LEVELS



    Key leverage ratios                                                                  Credit ratings




   Ratio                         2008       2009        2010         1H 2011                          Rating        Outlook      Last review
   Gross Debt*                                                                         Fitch
                                 1.1         1.2         0.9            0.7              LT FC IDR B                Positive     July 2011
   Adj EBITDA**
                                                                                         LT LC IDR B+               Positive     July 2011
   Net debt*** 
                                 0.9          1          0.6            0.4             Moody's
   Adj EBITDA**
                                                                                         LT CFR    B2               Stable       Nov 2010
   Adj EBITDA** 
                                 13           8         13.5           23.8
   Interest expenses




                                                                                  “The ratings reflect DTEK's leading positions in the Ukrainian
• Gross debt - bank loans, accrued interest and Eurobonds
                                                                                  coal mining, thermal power generation and distribution sectors…
** Adjusted EBITDA represents profit for the year after excluding the following   DTEK continues to benefit from a high level of integration
non-operating income statement items: foreign exchange losses less gains
from borrowings, certain finance costs, income tax expense, depreciation and      between its coal-mining and coal-fired power generation
amortization and impairment of property, plant and equipment.                     business units, which helped it maintain its operating margins…“
*** Net debt - bank loans, accrued interest and Eurobonds less cash and cash
equivalents. Calculated for information purposes only.                                                                         Fitch Ratings, 2011




                                                                                                                                                     23
DTEK’S LEVERAGE IS WELL BELOW INDUSTRY PEERS


    Debt/EBITDA, 2010 actual




                       DTEK‟s leverage is well below the industry
                       average, which provides flexibility in delivering                            5.1
5                      strategic growth objectives and puts the
                       company in a comfortable position in an
                                                                                            4,2
                       environment of tight debt markets.                    3,9   3,95
4




3
       Average 2.6
                                                                      2,8

                                                 2,1          2,1
2                             1,8



1
          0,9



0
         DTEK               EnBW                RWE          Endesa   E.ON   EDF   Enel   Verbund   EDP




All figures are 2010 actual. Source: DTEK, companies‟ data

                                                                                                          24
CONTENTS

 DTEK at a glance
 Ukrainian energy market overview
 Operations
 Financials
 Back-up




                                     25
SELECTED FINANCIALS 2005 – 2010, UAH


mln UAH                                     2005     2006     2007     2008     2009     2010
Income statement
 Revenues                                   3 784    5 049    8 969   12 969   15 009   24 294
Sale of steaming and coking coal            1 714    1 018    1 607    3 407    4 678    9 612
Sale of electricity to electricity pool     2 062    3 456    4 489    5 665    5 543    7 845
Sale of electricity to final customers          0      538    2 400    3 736    4 672    6 208
Other sales                                     8       37      473      161      116       58
 Operating expenses                         3 007    3 792    6 544    9 512   11 444   18 153
Cost of electricity purchased for resale        0      505    2 211    3 519    5 107    9 628
Raw materials                               1 338      773    1 263    1 799    2 325    3 787
Staff cost, including payroll taxes         1 330    1 637    1 913    3 015    3 020    3 560
Other expenses, net                           339      876    1 157    1 179      992    1 178
EBITDA                                        777    1 257    2 425    3 457    3 565    6 141
  EBITDA margin                            20.5%    24.9%    27.0%    26.7%    23.8%    25.3%
Depreciation                                  277      290      771    1 080    1 429    1 479
EBIT                                          500      967    1 654    2 377    2 136    4 662
  EBIT margin                              13.2%    19.2%    18.4%    18.3%    14.2%    19.2%
Net profit                                    268      493    1 193      119      856    2 857
Balance sheet
Non-current assets                         3 353    7 468    11 383   15 587   16 177   18 763
Current assets                               640    1 299     2 019    2 483    4 037    6 874
 - out of that cash and cash equivalents      86      237       368      595      739    1 693
  Total assets                             3 993    8 767    13 402   18 070   20 214   25 637
Shareholders equity (including minority)   2 388    5 181     7 069    9 989   10 793   13 280
Interest bearing debt                        145      858     1 947    3 731    4 428    5 502
Other liabilities                          1 460    2 728     4 386    4 350    4 993    6 855
  Total liabilities                        1 604    3 586     6 333    8 081    9 421   12 357


                                                                                                 26
SELECTED FINANCIALS 2005 – 2010, USD


mln USD                                     2005     2006     2007     2008     2009     2010
Income statement
  Revenues                                    738    1 000    1 776    2 462    1 926    3 061
Sale of steaming and coking coal              334      202      318      647      600    1 211
Sale of electricity to electricity pool       402      684      889    1 076      711      989
Sale of electricity to final customers          0      107      475      709      600      854
Other sales                                     2        7       94       31       15        7
  Operating expenses                          587      751    1 296    1 806    1 469    2 288
Cost of electricity purchased for resale        0      100      438      668      655    1213
Raw materials                                 261      153      250      342      298      477
Staff cost, including payroll taxes           260      324      379      572      388      449
Other expenses, net                            66      174      229      224      127      148
EBITDA                                        152      249      480      656      458      774
   EBITDA margin                           20.5%    24.9%    27.0%    26.7%    23.8%    25.3%
Depreciation                                   54       57      153      205      183      186
EBIT                                           98      192      328      451      274      587
   EBIT margin                             13.2%    19.2%    18.4%    18.3%    14.2%    19.2%
Net profit                                     52       98      236       23      110      360
Average x-rate USD/UAH                       5,12     5,05     5,05     5,27     7,79     7,94
Balance sheet
Non-current assets                           664    1 479    2 254    2 024    2 026    2 357
Current assets                               127      257      400      322      506      863
 - out of that cash and cash equivalents      17      237       73        77      93      213
  Total assets                               791    1 736    2 654    2 347    2 531    3 220
Shareholders equity (including minority)     473    1 026    1 400    1 297    1 352    1 668
Interest bearing debt                         29      170      386      485      555      691
Other liabilities                            289      540      869      565      625      861
  Total liabilities                          318      710    1 254    1 049    1 180    1 552
Average x-rate UAH / USD                    5,05     5,05     5,05       7,7    7,99     7,96
                                                                                                 27
ENERGY MARKET OF UKRAINE: REGULATORY FRAMEWORKS


                       Power generation market is regulated by:
Regulatory framework
                       •   Ministry of Energy and Coal Industry of Ukraine (regulator)
                       •   National Electricity Regulatory Commission of Ukraine (regulator)
                       •   Energorynok (single state operator).




                       Investments are included in tariffs for all NPPs, HPPs and CHPPs
Investment             The tariff for TPPs includes:
compensation model
                       • 80% of project implementation costs
for GenCos
                       • 95% of environmental investments



Investment             Currently, the regulator approves an annual figure for investments and includes it
compensation model     in the tariff.
for distribution
companies


                       Annually, the regulator sets a losses standard for each company. If actual losses
Losses compensation    are lower, it translates into profit; if higher, it translates into losses.
model


                                                                                                 Source: DTEK
                                                                                                                28
UKRAINE ЕNERGY MARKET: REGULATION MODELS EVOLUTION

Current model of the Wholesale Energy market (single buyer pool)                              Bilateral contracts market with a balancing market

      Price claims             Ministry of energy                                      GenCos           Ministry of energy             NERC           Consumers
                                                           Suppliers by
                                                          regulated tariff
     State TPP                       NERC
                                                                                                       System‟s operator: State company „Ukrenergo‟
      Generation
       NC ECU                                             Distribution
                                                           NC EKU                                      Bilateral contracts         Electricity
         DTEK:                  System‟s operator:                                                           market            transmission and
                                 State company                                       Bilateral                                      supply             Qualified
      Vostokenergo                                           DTEK:
                                   „Ukrenergo‟                                       contracts              Direct                                    consumers
                                                          Service-Invest
                                                         DTEK Energougol              market               contracts
                                                                                     installed                                    Suppliers by
                                                              ENE
  Tariff approved by NKRE                                                            capacity              Exchange               unregulated
                                                                                                           market „24                tariff
                                  State oprartor               VSE                                                                                      Export
                                                                                                           hours prior‟
                                  „Energorynok‟                AES
          NPP                                                                        Balancing
                                                                                       market              Balancing
                                                                                      installed             market
          HPP                                           Other suppliers by                                                        Suppliers by        Unqualified
                                                         regulated tariff             capacity
                                                                                                                                 regulated tariff     consumers
         CHPP                        Export
                                                                                       HPP                Balancing
                                                                                                          mechanism
                                  State operator                                       HNPP
     Other GenCos
                                 „Ukrinterenergo‟    Independent suppliers by
       including
         WPP                                            non-regulated tariff
                                                                                                       System‟s operator: State company „Ukrenergo‟
                                                                                                                             ‟


 Advantages of the current model:                                               New market model characteristics:
 • Simple in arrangements and price-setting
 • Practically guaranteed purchases of electricity from generating              •   The new market mechanism is based on the concept of bilateral contracts
   companies.                                                                       between generating companies and electricity suppliers
                                                                                •   Suppliers, at an unregulated tariff, supply electricity to qualified consumers,
 Drawbacks of the current model:                                                    and suppliers, at a regulated tariff, supply it to unqualified consumers
 • High level of administrative interference                                    •   The process of centralized planning and managing of electricity generation
 • Imperfect price-setting system, cross-subsidies                                  schedules by the market is replaced with a process of load schedules being
 • No market system and ancillary services.                                         compiled based on consumer use, supplier load and volume
                                                                                •   The balancing mechanism provides for balancing deviations in the declared
  Advantages of the new market model:
                                                                                    amounts of electricity generation and actual consumption. The operator
  • The market is competition-based
                                                                                    controls fulfillment of load schedules and can manage imbalances in the
  • Low administrative interference
                                                                                    system.
  • Favorable investment climate.
                                                                                                                                                      Source: DTEK
                                                                                                                                                                      29
UKRAINE ENERGY MARKET: TRANSITION TO RAB MODEL

Since 2007, The National Electricity Regulatory Commission, together with a group of foreign consultants supported by the
European Bank for Reconstruction and Development, has been implementing a project to introduce an incentive tariff-setting
system in the electricity distribution market in Ukraine.

The 2010-2014 Economic Reforms Programme and the 2011 National Action Plan envisage switching to incentive-based tariff-
setting. The following has been planned for 2011, but has not been implemented so far:

• Introducing amendments to the Law On Natural Monopolies
• Designing and introducing methodology for incentive regulation – approval of the methodology by NERC.

The baseline scenario assumes that the new model will start functioning in 2013. Switching to the new tariff regulation, which
should stimulate companies to improve their efficiency and investment attraction, should be accompanied by transmission and
supply tariff growth.




               STAGE I                                   STAGE II                                   STAGE III

        2011                 2012                 2013                  2014                 2015                 2016




                                            • Stage where the incentive tariff-          • The incentive tariff-setting method
• Preparing the tariff-setting                                                             has been fully introduced.
  mechanism.                                  setting mechanism is in place, but
• Amending administrative-regulatory          market conditions allow participants
  documents.                                  to adapt to the new rules without
                                              considerable financial risks.

                                                                                                                    Source: DTEK
                                                                                                                                   30
MEMBERSHIP




EU-Ukraine   Eurelectric   European      American      European          UN Global   US-Ukraine
Business                   Business      Chamber of    Association for   Compact     Business
Council                    Association   Commerce in   Coal and                      Council
                                         Ukraine       Lignite




                                                                                                  31
OPERATING ASSETS OWNERSHIP




       Coal production                       Power generation         Electricity supply

DTEK Pavlogradugol – 99.92%            Vostokenergo – 100%      DTEK Energougol ENE– 91.12%
DTEK Mine Komsomolets Donbassa-94% Wind Power – 100%            Service-Invest – 100%
DTEK Dobropolyeugol – 49 years lease   Dneproenergo – 47.55%    DTEK Power Trade – 100%
DTEK Dobropolskaya CPP – 60.06%        Kievenergo – 39.98%      Kievenergo – 39.98%
Pavlogradskaya CPP – 99%               Zapadenergo – 25.06%     Donetskoblenergo – 30.59%
Kurakhovskaya CPP – 99%
Mospinskoye CPP – 99%
DTEK Oktyabrskaya CPP – 60.85%
DTEK Trading – 100%




                                                                                              32
This document may contain forward-looking statements related to planned measures or future financial indicators of DTEK.
Accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. We undertake
                                                   Спасибо за внимание!
no obligation and do not intend to update these forward-looking statements to reflect events or circumstances occurring after
publication date. You are cautioned not to place undue reliance on these forward-looking statements, which are pertinent only as of
the date of this document. By their nature, forward-looking statements are subject to numerous assumptions, risks and
uncertainties.




                                                                                                                                      33

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dtek_management_presentation_september_2011

  • 1. DTEK: THE LEADER IN UKRAINIAN COAL & ENERGY MARKETS SEPTEMBER 2011
  • 2. CONTENTS  DTEK at a glance  Ukrainian energy market overview  Operations  Financials  Back-up 2
  • 3. LARGEST PRIVATE VERTICALLY INTEGRATED ENERGY COMPANY IN UKRAINE Power Coal production Thermal power generation supply & sales Share in coal mining in Ukraine Share in power generation in Ukraine¹ Share in power supply in Ukraine² 11,5% 18,8% DTEK 8.0% DTEK DTEK 12.0% 28.1% 18,7% 27.3% 23,7% DTEK Dneproenergo Zapadenergo DTEK Centrenergo Affiliated with DTEK Donbassenergo Other 1 As of 30.06.2011, DTEK owns 47.55% of Dneproenergo, 39.98% of Kievenergo and 25.06% of Zapadenergo Source: DTEK. The Main Data Processing 2 Center of NPC Ukrenergo As of 30.06.2011, DTEK owns 30.6% of Donetskoblenergo and 39.98% of Kievenergo 3
  • 4. LONG-TERM GOALS Fuel:  Coal mining > 50 m t Energy  Gas production > 3 bn m3 Society Consumers Power Generation:  Thermal generation > 16 Gwt  Renewable energy sources > 1 Gwt People Ukraine “Plus” Power Supply:  Electric power supply > 60 bn Kwt h Efficiency  Thermal power supply > 15 000 Gcal 4
  • 5. STRONG PROFIT GROWTH Revenue, EBITDA and Net Profit, UAH mln Revenue EBITDA Net profit Revenue growth drivers: 30000 - Volumes + 3 539 mln - Prices & Mix +1 883 mln 24 294 - Exports + 2 405 mln 25000 20000 18 453 15 009 15000 12 969 10 625 10000 8 969 6 141 5 049 5 068 5000 3 784 3 457 3 565 2 425 2 857 2 643 2 201 777 268 1 257 1193 856 1 288 493 119 0 2005 2006 2007 2008 2009 2010 1H 2010 1H 2011 YoY growth: REVENUE +33% +78% +45% +16% +62% +74% EBITDA +62% +93% +43% +3% +72% +92% NET PROFIT +84% +142% -90% +619% +234% +71% All figures for 1H 2011 are actual Source: DTEK 5
  • 6. CONTENTS  DTEK at a glance  Ukrainian energy market overview  Operations  Financials  Back-up 6
  • 7. POWER GENERATION MARKET Thermal power plants are the only generation assets in Ukraine with available capacity to meet mid- term electricity consumption growth Breakdown of Ukraine’s electricity production, gross Power plants output to WEM, TWh Nuclear Nuclear Power Plants 41, 5 47% Others Thermal Power Plants 32 ,6 9% Combined Heating Power Plants 7,5 Hydro 7% Hydro Power Plants 6 ,2 Non-conventional Power Plants 0,2 Thermal 37% Installed capacity, MWt Installed capacity utilization, % Thermal & Combined 33 774 Heating Power Plants Nuclear Power Plants 73 Nuclear Power Plants 13 835 Thermal & Combined Heating 31 Power Plants Hydro Power Plants 5 458 Hydro Power Plants 27 * All figures are 1H 2011 actual Source: DTEK, Main Data Processing Centre of NPC Ukrenergo 7
  • 8. THERMAL POWER GENERATION MARKET GenCos share of thermal power generation, % GenCos output to WEM, TWh Vostokenergo 27% Vostokenergo 8,9 Centrenergo Dneproenergo 7,8 19% Centrenergo 6,2 Dneproenergo 24% Zapadenergo 6,1 Donbassenergo 11% Donbassenergo 3,7 Zapadenergo 19% GenCos installed capacity, MWt GenCos Average tariffs, kop/ kWt h Dneproenergo 4651* 60,00 53,33 44,80 Zapadenergo 4650 40,00 33,24 36,75 Centrenergo 24,89 4600** 20,9 20,00 17,26 Vostokenergo 4157 0,00 Donbassenergo 2705 2005 2006 2007 2008 2009 2010 1H 2011 * Dnepronergo’s installed capacity is net of suspended oil & gas power units, ** Centrergo’s installed capacity is net of suspended oil & gas power units, and out of service units (8185 MWt including all units) (7600 MWt including all units) * All figures are 1H 2011 actual Source: DTEK, the Main Data Processing Center of NPC Ukrenergo 8
  • 9. UKRAINIAN ENERGY CONSUMPTION TRENDS Electricity demand is expected to grow at CAGR +3.7% in 2011-2020. In the mid-term (2011-2015) industry electricity consumption is expected to grow at CAGR +2.8%. Households demand should outperform the industrial sector with CAGR +6%, coming from the lowest in Europe electricity consumption per capita levels. Electricity consumption by categories, Mwh 158 689 148 528 147 893 147 483 143 463 134 506 Households 137 922 29 011 31 920 39 382 28 276 Other non-industrial consumers 26 444 37 674 34 396 Commercial households Construction Transport 77 866 79 761 82 508 78 351 Agriculture 77 244 71 517 63 985 Industry 2005 2006 2007 2008 2009 2010 2011e All figures are 1H 2011 actual Source: DTEK. National Electricity Regulatory Commission of Ukraine (NERC) 9
  • 10. HOUSEHOLD TARIFFS ARE AMONG THE LOWEST IN EUROPE Average households electricity rates in Europe, €/ Kwh  The average household tariff for the EU-27 is 0,16 Ukraine min 0,025 below 150 kWt per month €/Kwh. with the striking difference to Ukraine at 0,025 - 0,033 €/Kwh. Ukraine max above150 kWt per month 0,033  To bring Ukrainian tariffs to an economically justified level a four-fold increase is needed. Russia 0,08 Romania 0,11 Latvia 0,11 Lithuania 0,13 Tariff Growth in Ukraine, kop/kWh France 0,14 Industrial, 1st class Finland 0,15 Industrial, 2nd class Households, consumption to 150 kWh 78,4 Poland 0,15 80,0 70,0 United Kingdom 0,15 61,0 61,3 66,8 60,0 Hungary 0,17 45,9 50,0 51,6 48,3 Slovakia 0,17 40,0 36,1 28,0 Austria 0,20 30,0 21,9 20,0 Germany 21,9 21,9 0,26 10,0 Denmark 0,29 2008 2009 2010 2011E Source: Europe‟s Energy portal, DTEK All figures are 1H 2011 actual 10
  • 11. UKRAINIAN COAL AND GENCOS CONSUMPTION Coal remains by far the most important fuel for Ukrainian thermal GenCos, accounting for 96% of their total fuel (natural gas accounts for 4%). Coal consumption by GenCos, in concentrate, G,DG,T,A grade, thousand tonnes Thermal and anthracite coal mining, in concentrate, G,T,A grade, thousand tonnes Average yearly coal price, per tonne, in concentrate (ash 23%, wet 8.9%) 40000 800 776 35000 593 30000 600 528 25000 456 20000 400 330 15000 222 263 10000 200 34972 25873 32166 35359 27458 30467 34677 31785 30861 29318 31344 29502 28830 32197 5000 0 0 2005 2006 2007 2008 2009 2010 2011E DTEK is a vertically integrated energy company in Ukraine with complete production chain from coal mining to electricity generation and supply. Today DTEK fully covers the needs of its thermal power generation with its own coal. Fuel supply Power plant Distribution 11
  • 12. CONTENTS  DTEK at a glance  Ukrainian energy market overview  Operations  Financials  Back-up 12
  • 13. 1H 2011: СOAL PRODUCTION DTEK runs some of the most efficient and high quality mines in Ukraine, maintaining constant focus on enhancing operations and cost efficiency. ROM output, Labor productivity, Cost of production, kTonnes* Tonne per month/ worker* UAH/ Tonne* Average 57 Average 350 Pavlogradugol 7812 Komsomolets Komsomolets Donbassa 288 90 Donbassa Rovenkiantracite 3834 Krasnoarmeyskaya 90 Pavlogradugol 305 Krasnoarmeyskaya 3245 Pavlogradugol 76 Sverdlovantracite 309 Sverdlovantracite 3241 Sverdlovantracite 60 Rovenkiantracite 376 Krasnodonugol 2896 Rovenkiantracite 50 Dobropolyeugol 384 Komsomolets Donbassa 2060 Krasnodonugol 46 Krasnoarmeyskaya 467 Dobropolyeugol 31 Krasnodonugol 518 Dobropolyeugol 1563 DTEK coal mining growth, kTonnes 11 127 11 435 +2,7% 1413 +10,6% 1563 Dobropolyeugol *Dobropolyeugol is consolidated as of January 4th 2011 2036 +1.2% 2060 All figures are 1H 2011 actuals . Source: DTEK, company data Komsomolets Donbassa 7678 +1.7% 7812 Pavlogradugol 1H 2010 1H 2011 13
  • 14. 1H 2011: THERMAL POWER GENERATION DTEK’s TPPs are among the most efficient on Ukrainian power generation market. Vostokenergo’s TPP`s have highest production volumes and capacity utilization rates. Production volumes, TWh Capacity utilization rate, % * Fuel consumption, WEM tariffs by GenCos**, Gr / kWh kop / kWh Vostokenergo 9, 786 Vostokenergo 54 Dneproenergo 378,9 Zapadenergo 59 Dneproenergo 8 ,476 Dneproenergo 42* Vostokenergo 380,7 Vostokenergo 55 Donbassenergo 35 Centrenergo 397,2 Dneproenergo 52 Centrenergo 6, 730 Centrenergo 34*** Zapadenergo 403,1 Zapadenergo 6, 703 Centrenergo 51 Zapadenergo 33 Donbassenergo 417,8 Donbassenergo Donbassenergo 4, 132 47 * Dnepronergo’s ICUR is given net of suspended oil & gas power units and out of service units (21.84% including all units) ** Investment mark-up is not included ***Centrergo’s ICUR is given net of suspended oil & gas power units, (20,4% including all units ) All figures are 1H 2011 actual Source: DTEK, the Main Data Processing Center of NPC Ukrenergo 14
  • 15. 1H 2011: POWER SUPPLY Electricity transmission & sales, Mwh Nominal vs. Actual transmission losses, % Nominal transmission losses, % Actual transmission losses, % Dneprooblenergo 11 438 16,6 Krymenergo 16,1 Service-Invest 6 525 17,5 Donetskoblenergo 15,6 Zaporozhyeoblenergo 4 182 17,7 Odessaoblenergo 13,8 LEO 4 119 12,6 LEO 13,6 14,8 Donetskoblenergo 4 057 Kharkovoblenergo 13,1 9,8 Kievenergo 4 038 Zaporozhyeoblenergo 9,8 11,0 Kievenergo Kharkovoblenergo 3 349 8,9 8,8 DTEK Energougol ENE Odessaoblenergo 8,0 2 790 6,3 Dneprooblenergo 5,0 Krymenergo 1 996 2,3 Service-Invest 1,0 Source: National Electricity Regulatory Commission of Ukraine (NERC) All figures are 1H 2011 actual 15
  • 16. 1H 2011: COAL & ELECTRICITY EXPORTS DTEK is the largest privately-owned exporter of coal and electricity in Ukraine with ambitious plans to increase export volumes. Coal export revenue grew from USD 65 mln (1H 2010) to USD 231 mln (1H 2011)* Electricity export demonstrating 253% growth Coal export Coal export breakdown, thousand tonnes 183% OTHER – 0.27 1 865 mln tonnes 658 Belarus 1H 2010 1H 2011 Poland Electricity export revenue grew from USD 14 mln (1H 2010) to USD 146 mln (1H 2011)* EUROPE – 1.05 Slovakia Moldova demonstrating 934% growth mln tonnes Hungary Electricity export, mln KWh Romania Bulgaria 738% 2 138 Turkey 255 MEDITERRANEAN and AFRICAN 1H 2010 1H 2011 COUNTRIES – 0.16 mln tonnes *Using NBU exchange rate as of 30 Jun 2011 – 8,10 UAH per USD 16
  • 17. POWER PLANTS MODERNIZATION Vostokenergo. Vostokenergo. Kurahovskaya TPP Luganskaya TPP Unit-by-unit retrofit Unit-by-unit retrofit (200+222+225+4х 210 MWt) (3х175+ 4х200+ 100 MWt)  Dismantling of the boiler, turbine, generator,  Dismantling of the turbine, generator, Automated Modernization Automated Process Control System, and Process Control System, and scrubbers completed results electrostatic precipitator completed  New equipment: full turbine upgrade (Turboatom,  New equipment: Ovation (Emerson) software- Power Machines), Ovation (Emerson) software- technical unit for upgrading the Automated technical unit for upgrading the Automated Process Process Control System Control System  New transformer, thyristor excitation system (АВВ)  New starter for the generator installed installed  By the end of 2011, one block will be reconstructed.  Two blocks have been reconstructed so far. By the By the end of the program in 2016, modernization of end of 2011, the modernization of one more block five energy blocks will be finished. will be finished. By the end of program in 2016, four more energy blocks will be reconstructed. Investments USD 22, 420 mln USD 72, 778 mln 2008-1H 2011 Project start – April 1, 2008 Project start - October 12, 2009 Timelines Expected completion (Management‟s view) – Expected completion (Management‟s view) – November-December 2016 November-December 2016 17
  • 18. AMBITIOUS CAPEX PLANS Total Capex, USD mln* Capex Coal mining, USD mln* 700 300 281 278 572 263 261 600 556 49 250 45 56 486 22 24 211 63 500 22 420 200 39 371 400 254 238 21 139 150 128 144 28 186 116 300 122 103 118 100 200 50 90 93 263 281 278 261 69 78 82 100 211 0 0 2011E 2012E 2013E 20114E 2015E 2011E 2012E 2013E 2014E 2015E Coal Power generation Distribution Mining development Equipment purchase Major overhaul Capex Power generation, USD mln* Capex Power distribution, USD mln* Partially funded via tariff investment mark up Fully funded via tariff investment mark up 300 Other Modernization Including investment mark-up 40 254 250 238 Grid modernization Other 32 30 28 186 27 200 3 24 31 212 22 22 21 2 150 118 201 122 20 3 2 2 100 33 25 155 25 10 20 22 19 19 50 96 85 - 0 2011E 2012E 2013E 2014E 2015E 2011E 2012E 2013E 20114E 2015E * For comparison, UAH values of exact planned CAPEX are converted into USD at UAH 7.91/USD 18
  • 19. CONTENTS  DTEK at a glance  Ukrainian energy market overview  Operations  Financials  Back-up 19
  • 20. OUTSTANDING FINANCIAL PERFORMANCE Revenue, UAH mln EBITDA, UAH mln 25 000 8 000 20 000 74% 6 000 92% 15 000 24 294 4 000 10 000 18 453 6 141 15 009 5 068 2 000 5 000 10 625 3 565 2 643 0 0 2009 2010 1H 2010 1H 2011 2009 2010 1H 2010 1H 2011 Net profit, UAH mln Net operating cashflow, UAH mln 4 000 3 000 71% 3 000 203% 2 250 1 500 2 000 2 857 2 201 3 235 2 993 750 1 000 2 146 1 288 856 987 0 0 2009 2010 1H 2010 1H 2011 2009 2010 1H 2010 1H 2011 All figures are 1H 2011 actual 20
  • 21. EBITDA GROWTH MAIN DRIVERS 2 199 1H 2011, actuals 2010, (-) 5 373 1H 2010, fact 1H 2010, actuals fact 5627 30 2 643 Volumes Price/Mix Cost of Sales Other 5 068,0 All figures are 1H 2011 actual 21
  • 22. HEALTHY DEBT PROFILE Loan portfolio, USD mln Loan maturity profile*, USD mln 800 600 691 524 604 600 554 450 485 400 300 200 150 48 9 20 7 0 0 2008 2009 2010 1H 2011 2011 2012 2013 2014 2015 Debt currency profile, USD mln Loan portfolio by types of financing, USD mln EUR ECA financing 8% 10% USD 8% 10% Eurobond UAH Credit lines 82% 82% * Undiscounted principal amount repayment All figures are 1H 2011 actual 22
  • 23. LOW LEVERAGE LEVELS Key leverage ratios Credit ratings Ratio 2008 2009 2010 1H 2011 Rating Outlook Last review Gross Debt* Fitch 1.1 1.2 0.9 0.7 LT FC IDR B Positive July 2011 Adj EBITDA** LT LC IDR B+ Positive July 2011 Net debt*** 0.9 1 0.6 0.4 Moody's Adj EBITDA** LT CFR B2 Stable Nov 2010 Adj EBITDA** 13 8 13.5 23.8 Interest expenses “The ratings reflect DTEK's leading positions in the Ukrainian • Gross debt - bank loans, accrued interest and Eurobonds coal mining, thermal power generation and distribution sectors… ** Adjusted EBITDA represents profit for the year after excluding the following DTEK continues to benefit from a high level of integration non-operating income statement items: foreign exchange losses less gains from borrowings, certain finance costs, income tax expense, depreciation and between its coal-mining and coal-fired power generation amortization and impairment of property, plant and equipment. business units, which helped it maintain its operating margins…“ *** Net debt - bank loans, accrued interest and Eurobonds less cash and cash equivalents. Calculated for information purposes only. Fitch Ratings, 2011 23
  • 24. DTEK’S LEVERAGE IS WELL BELOW INDUSTRY PEERS Debt/EBITDA, 2010 actual DTEK‟s leverage is well below the industry average, which provides flexibility in delivering 5.1 5 strategic growth objectives and puts the company in a comfortable position in an 4,2 environment of tight debt markets. 3,9 3,95 4 3 Average 2.6 2,8 2,1 2,1 2 1,8 1 0,9 0 DTEK EnBW RWE Endesa E.ON EDF Enel Verbund EDP All figures are 2010 actual. Source: DTEK, companies‟ data 24
  • 25. CONTENTS  DTEK at a glance  Ukrainian energy market overview  Operations  Financials  Back-up 25
  • 26. SELECTED FINANCIALS 2005 – 2010, UAH mln UAH 2005 2006 2007 2008 2009 2010 Income statement Revenues 3 784 5 049 8 969 12 969 15 009 24 294 Sale of steaming and coking coal 1 714 1 018 1 607 3 407 4 678 9 612 Sale of electricity to electricity pool 2 062 3 456 4 489 5 665 5 543 7 845 Sale of electricity to final customers 0 538 2 400 3 736 4 672 6 208 Other sales 8 37 473 161 116 58 Operating expenses 3 007 3 792 6 544 9 512 11 444 18 153 Cost of electricity purchased for resale 0 505 2 211 3 519 5 107 9 628 Raw materials 1 338 773 1 263 1 799 2 325 3 787 Staff cost, including payroll taxes 1 330 1 637 1 913 3 015 3 020 3 560 Other expenses, net 339 876 1 157 1 179 992 1 178 EBITDA 777 1 257 2 425 3 457 3 565 6 141 EBITDA margin 20.5% 24.9% 27.0% 26.7% 23.8% 25.3% Depreciation 277 290 771 1 080 1 429 1 479 EBIT 500 967 1 654 2 377 2 136 4 662 EBIT margin 13.2% 19.2% 18.4% 18.3% 14.2% 19.2% Net profit 268 493 1 193 119 856 2 857 Balance sheet Non-current assets 3 353 7 468 11 383 15 587 16 177 18 763 Current assets 640 1 299 2 019 2 483 4 037 6 874 - out of that cash and cash equivalents 86 237 368 595 739 1 693 Total assets 3 993 8 767 13 402 18 070 20 214 25 637 Shareholders equity (including minority) 2 388 5 181 7 069 9 989 10 793 13 280 Interest bearing debt 145 858 1 947 3 731 4 428 5 502 Other liabilities 1 460 2 728 4 386 4 350 4 993 6 855 Total liabilities 1 604 3 586 6 333 8 081 9 421 12 357 26
  • 27. SELECTED FINANCIALS 2005 – 2010, USD mln USD 2005 2006 2007 2008 2009 2010 Income statement Revenues 738 1 000 1 776 2 462 1 926 3 061 Sale of steaming and coking coal 334 202 318 647 600 1 211 Sale of electricity to electricity pool 402 684 889 1 076 711 989 Sale of electricity to final customers 0 107 475 709 600 854 Other sales 2 7 94 31 15 7 Operating expenses 587 751 1 296 1 806 1 469 2 288 Cost of electricity purchased for resale 0 100 438 668 655 1213 Raw materials 261 153 250 342 298 477 Staff cost, including payroll taxes 260 324 379 572 388 449 Other expenses, net 66 174 229 224 127 148 EBITDA 152 249 480 656 458 774 EBITDA margin 20.5% 24.9% 27.0% 26.7% 23.8% 25.3% Depreciation 54 57 153 205 183 186 EBIT 98 192 328 451 274 587 EBIT margin 13.2% 19.2% 18.4% 18.3% 14.2% 19.2% Net profit 52 98 236 23 110 360 Average x-rate USD/UAH 5,12 5,05 5,05 5,27 7,79 7,94 Balance sheet Non-current assets 664 1 479 2 254 2 024 2 026 2 357 Current assets 127 257 400 322 506 863 - out of that cash and cash equivalents 17 237 73 77 93 213 Total assets 791 1 736 2 654 2 347 2 531 3 220 Shareholders equity (including minority) 473 1 026 1 400 1 297 1 352 1 668 Interest bearing debt 29 170 386 485 555 691 Other liabilities 289 540 869 565 625 861 Total liabilities 318 710 1 254 1 049 1 180 1 552 Average x-rate UAH / USD 5,05 5,05 5,05 7,7 7,99 7,96 27
  • 28. ENERGY MARKET OF UKRAINE: REGULATORY FRAMEWORKS Power generation market is regulated by: Regulatory framework • Ministry of Energy and Coal Industry of Ukraine (regulator) • National Electricity Regulatory Commission of Ukraine (regulator) • Energorynok (single state operator). Investments are included in tariffs for all NPPs, HPPs and CHPPs Investment The tariff for TPPs includes: compensation model • 80% of project implementation costs for GenCos • 95% of environmental investments Investment Currently, the regulator approves an annual figure for investments and includes it compensation model in the tariff. for distribution companies Annually, the regulator sets a losses standard for each company. If actual losses Losses compensation are lower, it translates into profit; if higher, it translates into losses. model Source: DTEK 28
  • 29. UKRAINE ЕNERGY MARKET: REGULATION MODELS EVOLUTION Current model of the Wholesale Energy market (single buyer pool) Bilateral contracts market with a balancing market Price claims Ministry of energy GenCos Ministry of energy NERC Consumers Suppliers by regulated tariff State TPP NERC System‟s operator: State company „Ukrenergo‟ Generation NC ECU Distribution NC EKU Bilateral contracts Electricity DTEK: System‟s operator: market transmission and State company Bilateral supply Qualified Vostokenergo DTEK: „Ukrenergo‟ contracts Direct consumers Service-Invest DTEK Energougol market contracts installed Suppliers by ENE Tariff approved by NKRE capacity Exchange unregulated market „24 tariff State oprartor VSE Export hours prior‟ „Energorynok‟ AES NPP Balancing market Balancing installed market HPP Other suppliers by Suppliers by Unqualified regulated tariff capacity regulated tariff consumers CHPP Export HPP Balancing mechanism State operator HNPP Other GenCos „Ukrinterenergo‟ Independent suppliers by including WPP non-regulated tariff System‟s operator: State company „Ukrenergo‟ ‟ Advantages of the current model: New market model characteristics: • Simple in arrangements and price-setting • Practically guaranteed purchases of electricity from generating • The new market mechanism is based on the concept of bilateral contracts companies. between generating companies and electricity suppliers • Suppliers, at an unregulated tariff, supply electricity to qualified consumers, Drawbacks of the current model: and suppliers, at a regulated tariff, supply it to unqualified consumers • High level of administrative interference • The process of centralized planning and managing of electricity generation • Imperfect price-setting system, cross-subsidies schedules by the market is replaced with a process of load schedules being • No market system and ancillary services. compiled based on consumer use, supplier load and volume • The balancing mechanism provides for balancing deviations in the declared Advantages of the new market model: amounts of electricity generation and actual consumption. The operator • The market is competition-based controls fulfillment of load schedules and can manage imbalances in the • Low administrative interference system. • Favorable investment climate. Source: DTEK 29
  • 30. UKRAINE ENERGY MARKET: TRANSITION TO RAB MODEL Since 2007, The National Electricity Regulatory Commission, together with a group of foreign consultants supported by the European Bank for Reconstruction and Development, has been implementing a project to introduce an incentive tariff-setting system in the electricity distribution market in Ukraine. The 2010-2014 Economic Reforms Programme and the 2011 National Action Plan envisage switching to incentive-based tariff- setting. The following has been planned for 2011, but has not been implemented so far: • Introducing amendments to the Law On Natural Monopolies • Designing and introducing methodology for incentive regulation – approval of the methodology by NERC. The baseline scenario assumes that the new model will start functioning in 2013. Switching to the new tariff regulation, which should stimulate companies to improve their efficiency and investment attraction, should be accompanied by transmission and supply tariff growth. STAGE I STAGE II STAGE III 2011 2012 2013 2014 2015 2016 • Stage where the incentive tariff- • The incentive tariff-setting method • Preparing the tariff-setting has been fully introduced. mechanism. setting mechanism is in place, but • Amending administrative-regulatory market conditions allow participants documents. to adapt to the new rules without considerable financial risks. Source: DTEK 30
  • 31. MEMBERSHIP EU-Ukraine Eurelectric European American European UN Global US-Ukraine Business Business Chamber of Association for Compact Business Council Association Commerce in Coal and Council Ukraine Lignite 31
  • 32. OPERATING ASSETS OWNERSHIP Coal production Power generation Electricity supply DTEK Pavlogradugol – 99.92% Vostokenergo – 100% DTEK Energougol ENE– 91.12% DTEK Mine Komsomolets Donbassa-94% Wind Power – 100% Service-Invest – 100% DTEK Dobropolyeugol – 49 years lease Dneproenergo – 47.55% DTEK Power Trade – 100% DTEK Dobropolskaya CPP – 60.06% Kievenergo – 39.98% Kievenergo – 39.98% Pavlogradskaya CPP – 99% Zapadenergo – 25.06% Donetskoblenergo – 30.59% Kurakhovskaya CPP – 99% Mospinskoye CPP – 99% DTEK Oktyabrskaya CPP – 60.85% DTEK Trading – 100% 32
  • 33. This document may contain forward-looking statements related to planned measures or future financial indicators of DTEK. Accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. We undertake Спасибо за внимание! no obligation and do not intend to update these forward-looking statements to reflect events or circumstances occurring after publication date. You are cautioned not to place undue reliance on these forward-looking statements, which are pertinent only as of the date of this document. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties. 33