Stirol decreases net loss by 47% y-o-y in 1H11

Stirol (UX: STIR UK) decreased its net loss by 47% y-o-y to UAH 135 mln in 1H11, while revenues more than doubled y-o-y to UAH 2.4 bln, according to a filing yesterday with the State Securities & Exchange Commission. Antonina Davydenko: Stirol’s earnings release demonstrates a substantial improvement, however the company did not manage to generate a profit despite booming fertilizer prices in 1H11 (average FOB Yuzhny ammonia prices grew 46% y-o-y, urea +47% y-o-y, and ammonia nitrate +40% y-o-y).  There is still no certainty on the price at which the company purchases gas. We forecast revenues at USD 200 mln in 2011E (given that its gross margin is in the black for the first time since 2008) and we expect Stirol to break even in 2011E.