Sadovaya raises coal sales 29% mom in August

Sadovaya Group (SGR PW) reported a 29% mom increase in August coal sales to 43.7 kt, while 8M12 data shows a 39% yoy decline to 464 kt. Coal mining has been the company’s only growth segment this year: +18% mom at 50.4 kt in August, and +12% yoy at 316.9 kt. Sadovaya also announced that its modular enrichment complex was launched in test mode on September 7.

Roman Topolyuk: The increase in mining occurred due to a new longwall launch at the Rassvet-1 Mine, as well as due to more intense loading of longwalls at Sadovaya Mine. With 8M12 results in hand, we see that Sadovaya will be close to meeting its 2012 target for coal mining of 532 kt, but the company’s pace is still lagging behind its own target for coal sales of 1.177 mmt. This, however, seems to be largely priced-in by the market. The long-awaited news on the commissioning of its waste enrichment complex is encouraging, though we are still looking forward to seeing the quality of output and production costs of the new facility.