Avdiyivka Coke reports weak 3Q14 financials

Avdiyivka Coke (AVDK UK), Ukraine’s largest coke producer and subsidiary of Metinvest (METINV), reported on Oct. 30 negative operating profit in 3Q14 resulting from suspended production in July after power supply to the plant was interrupted. The plant produced 358 kt of coke in 3Q14, which is 64% lower qoq. Revenue fell 60% qoq to USD 61 mln while EBITDA plunged to a USD 33 mln loss, compared to a positive result of USD 21 mln in 2Q14.

Avdiyivka Coke endured a net loss of USD 33 mln in 3Q14, compared to a net profit of USD 12 mln in 2Q14. Its financials weakened for 9M14: revenue decreased 34% yoy to USD 458 mln from the same year-ago period, EBITDA turned negative to USD -51 mln (compared to positive USD 34 mln in 9M13), and its net loss reached USD 61 mln compared to a profit of USD 2 mln a year ago.

Roman Topolyuk: The company published expectedly adverse financial results since the plant manufactured only a third of its usual quarterly volumes in 3Q14. Avdiyivka Coke succeeded in maintaining its key production facilities, its coke batteries, in operating mode by preventing them from being switched off after the plant was deactivated due to bombardment. However, due to continuing bombardment in the region, the plant has yet to restore coke production to normal volumes. We expect to see aggravated losses in its 2014 results.