Sadovaya coal sales fall 33% yoy in 5M12

Sadovaya Group (SGR PW) reported a 33% yoy decrease in coal sales to 339 kt in 5M12, following a 13% mom decrease in May to a low 68 kt. Sadovaya’s mining subsidiaries increased coal extraction 3% mom to 44 kt in May and 21% yoy in 5M12 to 189 kt, in line with preliminary data from the Ministry of Energy published early this month.

Roman Topolyuk: Sadovaya’s published production results imply the sales decline is attributed to a squeeze in the company’s third party coal trading amid weakness on the coal market. The company has been cutting its low-profit reprocessing of third party coal since the beginning of the year, while increasing its own coal mining. The closest short-term driver for the stock will be the launch of an enrichment facility, which Sadovaya expects to commission in test mode in July 2012.