Sadovaya raises coal mining 10% mom in April

Sadovaya Group (SGR PW) increased coal mining 14% yoy to 146 kt in 4M12, according to preliminary data from the Ministry of Energy published by Interfax. The data implies coal extraction of 43 kt in April (+10% mom), including 25 kt (+9% mom) at Sadovaya Mine and almost 18 kt (+11% mom) at Rassvet-1 Mine.

Roman Topolyuk: After a relatively slow start in mining in the first two months of 2012, Sadovaya is catching up to its full-year mining growth target of 12% yoy. Mining, however, will not be the sole determinant of Sadovaya’s growth this year – improvement in financials is expected to be largely driven by its coal waste recycling segment. Our key concern now is coal selling price – since April, the state has lowered the benchmark price 10% to the equivalent of USD 88/t, which will influence Sadovaya’s selling price, presumably, with a time lag.