Coal Energy increases 7M FY12 coal production by 56% yoy

Coal Energy (CLE PW) reported yesterday a 1.1% mom increase in coal mining to 134.7 kt in January 2012, while coal production from waste recovery remained flat mom at 17.6 kt. We estimate that the company increased underground mining by 67% yoy in 7M FY2012 to 919 kt, while total coal production grew by 56% yoy to 1,041 kt.

Roman Topolyuk: January’s monthly operations were expectedly stable. Output at Coal Energy’s coking coal segment was almost unchanged in January, after a new longwall was commissioned at Novodzerzhinskaya Mine in October and loaded to full capacity in December. Coal Energy plans to launch a new longwall and intensify production at another by the end of its 2012 financial year, which will increase coal mining by 60% yoy to 1.7 mmt. We project Coal Energy’s coal output to be 1.9-2.0 mmt (up 17-23% yoy), close to the company’s recent guidance. A positive surprise could come from the company’s waste recovery segment.