Sadovaya reports minimum sales in January, plans to sell 25 kt in March

Sadovaya Group (SGR PW) reported coal sales of 1 kt in January (11x lower mom). The company gave no update on coal production during the month, which leads us to presume that its mining subsidiaries are still in idling mode. Sadovaya expects to sell 5 kt of coal in February and 25-30 kt in March.

Roman Topolyuk: The company continues to struggle in tough market conditions, with very slow destocking of products. We estimate its stock of finished products will fall to 75 kt by the end of February. With 31-36 kt reportedly planned for sale in 1Q13 (about 1.5x down qoq, 6x down yoy), Sadovaya will have its worst quarter in terms of earnings since 2009, which would also imply a second consecutive quarter of losses.