Coal Energy revenue falls 71% in FY20

Mining company Coal Energy (CLE PW) reported net
revenue for FY20 (July 2019 – June 2020) of USD 3.69 mln, which is 71% less
yoy, according to its unaudited annual accounts. About 69% of its sales came to
related parties in FY20 (98% a year ago). Its EBITDA turned negative at USD
0.02 mln, down from a positive value of USD 2.54 mln a year ago.

Meanwhile, the company reported net income of USD
30.12 mln in the year (vs. USD 9.29 mln losses a year ago), which was mostly
the result of USD 38.45 mln in “gain” on the sale of subsidiaries. It sold for
a symbolic price two subsidiaries which had USD 49.20 mln in debt, while the
company’s consolidated debt did not decrease much in the year: just by USD 5.40
mln yoy to USD 64.75 mln. At the same time, the company reported the appearance
of a long-term loan to a related party in the amount of USD 43.89 mln as of
end-June 2020. There is no mention of any lending in the company’s cash flow
statement.

Alexander Paraschiy: The company’s accounts, which have not been audited since 2014, look
increasingly strange. The “transaction” where the company “generated huge
profit” and “made a huge investment into lending to a related party” may mean
that Coal Energy’s owner simply took some additional guarantee on some portion
of the company’s debt. Meanwhile, the company’s ratio of net debt to revenue of
17.5x as of end-June 2020 (up from 5.4x a year before) indicates Coal Energy is
far from being solvent.