FY 2010

-          The installed capacity of unit 1 at Zuevskaya TPP increased by 8% to 325 MW, flexibility range of the power unit increased to 35 MW;

-           The installed capacity of unit 7 at Kurakhovskaya TPP increased by 7% to 225 MW, flexibility range of the power unit increased to 55 MW;

-          The third stage of equipment reconstruction commenced at several units (Unit 4 at Zuevskaya TPP; Unit 8 at Kurakhovskaya TPP; and Unit 13 at Luganskaya TPP);

 

Core of DTEK’s ongoing strategy are the ongoing investments at several key facilities of the Company . They include:

 

At Stepnaya mine (Pavlogradugol), DTEK continues to introduce plough units manufactured by Bucyrus DBT Europe GmbH. These units enable the mine to deliver a daily output of approximately 3,000 tonnes of coal from a single longwall, an increase of between two and three times over historic levels, which were produced through its use of shearers. 

 

Several investment projects were implemented at the Company’s coal preparation plants during 2010. They included upgrades to the water-sludge scheme at Oktyabrskaya CEP, installation of new centrifuges at Dobropolskaya CEP, and major refurbishment and reconstruction of buildings at Dobropolskaya CEP and Pavlogradskaya CEP. 

 

The reconstruction of DTEK’s power units, completed in 2009/2010, has enabled the Company to increase its electricity output and has ensured high levels of capacity and the ongoing reliability of Eastenergo’s operational infrastructure. Zuevskaya TPP has the highest Installed Capacity Utilization Rate (ICUR) for 300MW units in Ukraine (65%). Eastenergo’s ICUR remains the highest among Ukrainian TPPs at 50.01%.

 

The Company also continued the second stage of its power equipment upgrades during the period. Works at Unit 1 of Zuevskaya TPP and Unit 7 at Kurakhovskaya TPP have been completed, with its capacity increased from 300 MW to 325 MW and from 210 MW to 225MW respectively, while at the same time its specific fuel consumption has been reduced by 3%. The upgrading of Unit 10 at Luganskaya TPP continues, with schedule to complete it in December 2011.

 

DTEK has also commenced implementation of the third stage of the reconstruction of its power equipment, which will include Unit 4 at Zuevskaya TPP; Unit 8 at Kurakhovskaya TPP; and Unit 13 at Luganskaya TPP.    

 

The fourth stage of the reconstruction began at the end of 2010 with tendering procedure to choose subcontractors for reconstruction works (power unit 3, Zuevskaya TPP; power unit 6, Kurakhovskaya TPP and power unit 11, Luganskaya TPP).

The reconstruction works at Dniproenergo on Unit 9, Pridneprovskaya TPP and Unit 3, Krivorozhskaya TPP continued through the period. These are scheduled to be completed in September and December 2011 respectively. Also, reconstruction of Unit 1, Zaporozhskaya TPP is ongoing. The reconstruction will extend the service life of the equipment by 15-20 years and improve firing and slag yield, meaning that residual dust content will not exceed 50 mg/m3 – in line with the European Union standards. It also plans to raise the installed capacity of Unit 3, Krivorozhskaya TPP, from 282 MW to 300 MW.

 

At the beginning of the year, Service-Invest began the implementation of several large-scale investment projects including the reconstruction of the Donetskaya 110kV substation; Chulkovka, Ugledar(finished in December 2010) and Druzhkovka 110 kV substations; 12km-long power lines 35 kV Amvrosievka 330 Metallist; and the replacement of line transformers at Styla 110 kV substation(finished in December 2010).

 

PES Energougol finished implementation of the Tochmash PS – RP Stratonavts cable line capital construction project in the shift of the year. These projects will enable DTEK to improve the reliability of power supplies to industrial consumers and adjacent licensees. 

 

 

In 2010 DTEK Trading, coal trading arm of DTEK,- traded coal in domestic and foreign markets. Its main consumers in Ukraine are Ukrainian power generating companies, the largest iron and steel works and other industrial companies. Last year DTEK Trading exported about 2m tonnes of coal, which is twice as much as in 2009 (764,000 tonnes). Coal was supplied to consumers in Turkey, Bulgaria, Poland, Romania, India, USA and Brazil. Furthermore, the enterprise imported 1.3m tonnes of coal to be consumed by DTEK’s TPPs.

 

Starting January 2010, DTEK supplies electricity to consumers in Hungary, Slovakia, Romania and Belarus through Eastenergo and its electricity trading arm, Power Trade. Last year the Company exported 1.21 TWh of electricity.

 

  

Mr. Yuriy Ryzhenkov, Chief Operating Officer, commented:

“During 2010, DTEK continued to make solid progress across its major projects, further enhancing its operational infrastructure and continuing its investments into new initiatives that will ensure and enhance DTEK’s long term prospects. We are pleased that our ongoing modernization program together with other measures to increase operating efficiency paid us back with encouragingly growing overall company’s performance. It placed DTEK in a very favorable position for future development, and provides foundation for future growth.”

 

 

DTEK continues to develop its network of social partnerships. In 2010, DTEK collaborated within framework of the Social Partnership Programme with towns where the Company runs its business. 15 towns and 4 districts of Donetsk, Dnepropetrovsk, Zaporozhye and Lugansk regions of Ukraine became participants of the Programme. In 2010, DTEK invested USD 1.5m in the social-economic development of those areas.    

 

In 2010, priority directions of DTEK’s social partnership were energy efficiency, education, health care and improvement of the  local infrastructure. Key projects included improving energy efficiency of heating networks of Kurakhovo town in the Donetsk region (implemented with support of the USAID project “Municipal Heating Reform in Ukraine”) and equipping four medical care units in the Western Donbass.   

 

 

Maxim Timchenko, Chief Executive Officer of DTEK, concluded:

 

“2010 brings DTEK to the new level. We have created solid foundation to prepare for future growth, we managed to find the right direction for the DTEK’s development. We proved our ability to turn over our assets and are ready to integrate new assets into our efficient operational and financial structure. Looking forward I am confident that we have the right capabilities, expertise and team composition to deliver sustainable long term value for our stakeholders.”

 

 

   

 

Alexander Tolkach

Director for External Affairs

DTEK

Tel:      +38 (044) 581 45 90

E-mail: ir@dtek.com

  

 

DTEK is the first private vertically-integrated power company in Ukraine. It is part of the financial and industrial group System Capital Management (SCM). The enterprises of DTEK build up an efficient operational chain of coal production and preparation, electricity generation and distribution.

 

The coal business of DTEK includes Pavlogradugol (consisting of ten coal mines), Komsomolets Donbassa Mine and five coal preparation plants. Also DTEK rents the whole production complex of state owned coal mining company Dobropolyeugol (5 mines) . The Lease Agreement with 49 years tenure was signed with the State Property Fund of Ukraine.

 

The power generation business of DTEK is represented by Eastenergo (Vostokenergo) and the associate companies Dniproenergo, where DTEK owns 47.55%, and Zakhidenergo, where DTEK together with affiliate companies owns 24.9%.

 

Service-Invest, PES Energougol and the associated Donetskoblenergo Company, where DTEK owns 30.6%, represent the electricity sales and supply business of DTEK.

 

DTEK also holds a 39.98% stake in Kyivenergo, which provides a full cycle of energy supply to Ukraine’s capital, with a unified process for production, transport and supply of heat and electric energy.

 

  

This document may contain forward-looking statements related to the planned measures or future financial indicators of DTEK. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” or the negatives of these terms or variations of them and similar expressions are intended to identify such forward-looking statements. Accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. We undertake no obligation and do not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties. Such risks include concerns over the general economic status, environment and risks associated with the doing business in Ukraine, significant technological and environmental changes in our sector, as well as many other risks specifically applicable to DTEK and its business.

 

 

In millions of Ukrainian Hryvnia	31 December 2010	31 December 2009
Assets
Non-current assets
Property, plant and equipment	11,575	10,954
Intangible assets	731	700
Investments in associates	4,099	3,025
Financial investments	1,279	1,054
Deferred income tax asset	1,041	428
Other non-current assets	38	16
Total non-current assets	18,763	16,177
Current assets
Inventories	1,157	633
Trade and other receivables	2,984	2,070
Financial investments	1,040	595
Cash and cash equivalents	1,693	739
Total current assets	6,874	4,037
Total assets	25,637	20,214
EQUITY
Share capital	-	-
Share premium	9,909	9,909
Other reserves	(865)	(696)
Retained earnings	4,166	1,507
Net assets attributable to the equity holders	13,210	10,720
Non-controlling interest in equity	70	73
Total equity	13, 280	10,793
Liabilities
Non-current liabilities
Liability to non-controlling participants	3	2
Eurobonds issued	3,889	-
Borrowings	620	807
Other financial liabilities	118	221
Indebtedness under amicable agreement	93	126
Government grants	9	42
Retirement benefit obligations	1,582	1,379
Provisions for other liabilities and charges	311	160
Deferred income tax liability	1,540	959
Total non-current liabilities	8,165	3,696
Current liabilities
Borrowings	993	3,621
Other financial liabilities	485	607
Prepayments received	320	80
Trade and other payables	1,961	1,055
Current income tax payable	273	205
Other taxes payable	160	157
Total current liabilities	4,192	5,725
Total liabilities	12,357	9,421
Total liabilities and equity	25,637	20,214