Coal Energy doubles EBITDA yoy in 1H FY12

Coal Energy (CLE PW) reported this week a 50% yoy increase in revenue for the first half of its 2012 financial year (July-December 2011) to USD 82.4 mln, 103% yoy growth in EBITDA to USD 33.1 mln and a 129% rise in net income to USD 20.7 mln. EBITDA margin improved to 40% in 1H FY12 compared to 30% a year before. The half-year results imply improved quarterly performance – EBITDA grew 7% qoq to USD 17.1 mln and net income jumped 50% qoq to USD 12.4 mln.

Roman Topolyuk: Coal Energy reported a significant yoy increase in 1H FY12 financials on the back of a 57% increase in production. The key driver for qoq EBITDA growth in 2Q FY12 was the sale of emission reduction units for USD 0.9 mln (vs. zero sales in 1Q FY12), as coal production added just 2% qoq, and coal prices were mixed. Steam coal appreciation on the domestic market (+7% qoq) partly compensated for a decrease in the price of thermal coal on the export market (-8% qoq) and of coking coal prices sold domestically (-3% to -12% qoq). Coal Energy’s mining costs increased 6% qoq to USD 50.9/t. Cost of coal production from waste was a positive surprise, decreasing 12% qoq to USD 23.3/t. With prices for coking coal on the domestic market and thermal coal on the export market declining and Coal Energy’s production target for FY2012 of 1.8 mmt (which implies almost flat hoh production in 2H), the company might report a decrease in its EBITDA in 2H FY12.