Coal Energy increases EBITDA 18% yoy in FY2012

Coal Energy (CLE PW) increased revenue 10% yoy to USD 165.5 mln in FY2012 ended in June, according to a report published yesterday. EBITDA grew 18% yoy to USD 61.9 mln and net income rose 4% yoy to USD 38.4 mln. In quarterly terms, revenue added 45% qoq to USD 49 mln, EBITDA swelled 110% qoq to USD 19.5 mln, net income jumped 71% qoq to USD 7.6 mln. Net debt was USD 8.5 mln as of end June, compared to net cash of USD 0.8 mln as of March 2012. The change in net debt during the quarter represents half of the company’s CapEx, which was USD 16.8 mln in 4Q FY2012, bringing yearly CapEx to USD 57.4 mln. Coal Energy announced that it commissioned a new coal waste reprocessing plant in mid-October, which is expected to be loaded to full capacity (about 30k of coal concentrate per month) starting from January 2013. The company reiterated its previously downgraded guidance for coal mining in FY2013 of 2.2 mmt (+38% yoy), out of which 0.3 mmt of coal will be extracted from new long walls. Coal Energy estimates its CapEx for FY2013 at USD 63 mln.

Roman Topolyuk: The audited results came in close to the company’s published profit guidance. The company demonstrated yoy growth in revenues and earnings, despite a 6% yoy decline in sales (to 1.7 mmt, by volume). This was affected by 11-34% growth in the selling price of thermal coal (70-80% of total revenue), while coking coal prices slid 15% yoy. The quarterly boost in financials is explained by the selling of accumulated coal stockpiles in 4Q FY2012. We see further organic growth for the company’s business, which is focusing on thermal coal, will depend on raising debt financing. The company is currently negotiating a USD 70 mln long-term loan with the EBRD, which might cover Coal Energy’s investment needs for FY2013.