Daily monitor

Ukraine’s state telecommunication company, Ukrtelecom [UTLM UZ, U/R], recorded a net profit of UAH 57.5 mln in 2Q09, compared to the results in 2Q08 when the company received a net loss of UAH 4.34 mln. Net sales increased by 0.7% YoY to UAH 1,615 bln.

On July 23, 205.8 thsd mt of oil was sold at Resources Auction 131, which took place on the floor of the Ukrainian Interbank Currency Exchange. According to the UICE’s official information, the average price of the oil was UAH 1,252 per mt (down 2.8% from the last large-volume auction, Auction 130, which took place on June 23), or USD 18.6 per bbl (excluding VAT, at USD/UAH 7.6632, down 3.4%).

Cherkasyoblenergo [CHON UZ, BUY], Dniprooblenergo [DNON UZ, BUY], Kharkivoblenergo [HAON UZ, BUY], Kirovogradoblenergo [KION UZ, BUY], Krymenergo [KREN UZ, BUY] and Lvivoblenergo [LVON UZ, BUY] reported their semi-annual financials. During the fist half of 2009 CHON, KION and KREN worsened their bottom lines compared to the first half of 2008 while the rest of the oblenergos saw a little improvement in revenues.

According to the State Statistics Committee, telecommunication revenue decreased by 0.9% YoY in 1H09 to UAH22.1 bln. Revenue from urban and rural fixed line services increased by 3.8% YoY and 2.1%YoY respectively or overall by 3.7% YoY, revenue from internet services grew by 26.8%YoY, revenue from domestic long distance (DLD) and international long distance (ILD) dropped 19.2 YoY. Revenue from the mobile segment decreased by 2.8% YoY to UAH 13.6 bln. mainly due to a drop in retail spending on mobile services.

According to preliminary data from the National Bank of Ukraine, the BOP deficit in 1H09 reached USD 7.3 bln, compared to USD 6.6 bln in January-May 2009. The BOP deficit in June reached USD 732 mln, compared to a USD 275 mln deficit in May.

Ukrzaliznitsya (UZ) intends to order additional 4 electric trains from Luhanskteplovoz [LTPL UZ, N/R]. UZ has already purchased four locomotives since the beginning of the current year. According to the head of UZ’s locomotive department, Mr Vladimir Zaytsev, the main barrier to increasing the order volume from LTPL is the price for a new locomotive, which has risen by 50% to UAH 37 mln (USD 4.85 mln).

Chernigivoblenergo [CHEON UZ, BUY], Khmelnitskoblenergo [HMON UZ, BUY], Vinnytsyaoblenergo [VIEN UZ, BUY], Volynoblenergo [VOEN UZ, BUY], Zakarpattyaoblenergo [ZOEN UZ, BUY] and Sumyoblenergo [traded OTC] reported their semi-annual financials. During the fist half of 2009 all the companies improved their revenues and net incomes, compared to the first half of 2008. Nonetheless, margins did not change materially.

According to NBU decision #414 from July, 21 banks will be obliged to transfer 40% of their mandatory reserves to a special account in NBU beginning on August 3. Unlike correspondent accounts, these special accounts money will not be available for banks, which NBU believes would decrease banks’ ability to speculate of the FX market and would decrease devaluation pressure.

Based on a statement from the head of the Industry and Infrastructure Department of the Luhansk Oblast Administration, Mr.Valariy Bezlepkin, Luhanskteplovoz [LTPL UZ, N/R] will dismiss about 70% of its staff down to 2000 employees in the next few months. The main reason for the cost cutting program is a lack of orders from clients.

According to IKS-Consulting monthly statistics, the number of Ukrtelecom [UTLM UZ, U/R] mobile users increased by 4.4% MoM to 289.7 thsd clients in June 2009.The overall number of mobile users in the market decreased by a meager 0.5% to 54.8 mln. customers. The level of penetration decreased by 0.4% to 119.2%.