Sadovaya monthly sales hit record low in December, mines idle

Sadovaya Group (SGR PW) reported on Jan. 14 a 1.9x mom decline in monthly sales in December to 11.2 kt (down 11x yoy). Thus, the company’s 2012 coal sales amounted to 569.6 kt, down 55% yoy. Both of its mines remained idle in December, while the company reported some 2.4 kt in coal extracted from its Rassvet-1 mine (flat mom, down 12x yoy). 2012 coal mining was down 14% yoy to 407.5 kt. SGR’s waste reprocessing facility is still running in test mode.

Roman Topolyuk: Sadovaya’s December sales came in lower than we expected. Finished product stockpiles decreased only 12% to around 80 kt, according to our estimates. With such low sales activity, the company may continue to keep production facilities idle in February, leading to rising pressure on its solvency and liquidity.