TGK-10 Posts 1H10 IFRS Results
OREANDA-NEWS. July 20, 2010. The Finnish company Fortum published its 1H10 results, disclosing the IFRS financials of its Russian subsidiary TGK-10, reported the press-centre of OTKRITIE Financial Corporation.
View: 1H10 revenues amounted to USD537m which amounts to 56% of our FY10 forecast of USD 976m for the company. Reflecting a strong first quarter, revenue was up 27% YoY, with EBITDA at USD 86m (+132% YoY), which comprises 71% of our FY10 forecast of USD 121m. The EBITDA margin of 15.7% is higher than our FY10 estimate of 12.4%. Also, EBIT rose by 31% to USD 31m. The improved financial results are partly a function of increased electricity prices, and partly due to the rise of TGK-10’s share of power sold on the liberalized price market from 29% in 1H09 up to 53% in 1H10. There was no consensus available for these results. However, we regard them as relatively strong for the company, supportive of our FY10 forecasts.
Valuation: TGK-10 trades at an EV/Installed capacity multiple of USD 93/kW versus the TGK average of USD 230/kW.
Action: We view this news as slightly positive and reiterate a BUY rating on the stock.
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