OREANDA-NEWS. February 21, 2011. Zakhidenergo (UX: ZAEN UK) reported its 4Q10 financials on Friday in securities commission filings. Its revenue grew 28% y-o-y to UAH 1,604 mln, while net losses amounted to UAH 151 mln (margin of -9% vs. -4% in 4Q09).

Concorde Capital: as we expected for all GenCos but Donbasenergo, 4Q10 was tight due to unexpected selling electricity price decreases in 4Q10, which undermined profitability. Zakhidenergo remains our lease favorite pick in the cheap Ukrainian GenCo universe due to its distance from coal mines, dependency on more expensive coal and low efficiency of power units. These factors makes us skeptical of the company’s ability to earn high margins even in the mid to long-term, when we expect sector-wide profitability to improve.