Analysis of the vulnerability of Ukrainian energy companies to financial risks

The article examines the vulnerability of enterprises in Ukraine’s energy sector to financial risks through a comprehensive analysis of key financial risks, including liquidity, currency, interest rate, credit, and capital structure risks. To assess these risks, an algorithm consisting of six interrelated stages was developed. The financial performance of major industry companies – NNEGC «Energoatom», NPC «Ukrenergo», DTEK Energy Group, and NJSC «Naftogaz of Ukraine» were analysed. It is emphasized that new challenges, particularly those emerging since 2019, have increased uncertainty in this sector. The study revealed low liquidity indicators due to debt accumulation caused by government regulation, highlighting the need for improved risk management. Currency risk was found to be most significant for companies with substantial open currency positions, especially for DTEK Energy. The analysis of interest rate risk confirmed the vulnerability of companies that attract loans with floating interest rates, particularly NPC «Ukrenergo» and NNEGC «Energoatom». Credit risk is largely driven by debtor defaults, negatively impacting the financial performance of Naftogaz and Ukrenergo. Capital structure risks are inherent to DTEK Energy Group and NPC «Ukrenergo» due to insufficient equity capital. The study’s findings enabled the formulation of recommendations to enhance the financial stability of energy companies, including loan restructuring, currency risk hedging, the introduction of bank guarantee mechanisms, and factoring. The developed financial risk map identifies critical areas that require priority improvements in risk management. The conclusions drawn may be useful for financial analysts, investors, and government regulators in developing strategies to mitigate financial risks in Ukraine's energy sector.