Sadovaya ups coal sales 35% mom in November

Sadovaya Group (SGR PW) reported 35% mom growth in coal sales in November to 21.6 kt, and 11M12 sales at 558 kt, down 51% yoy. Coal mining fell 3% yoy to 405 kt in 11M12, and slid 13x mom in November to 2.3 kt, with all its monthly output coming up from its Rassvet-1 mine, which came as no surprise taking into account the released Energy Ministry data (refer to our Dec. 7 news). Sadovaya’s new waste recovery facility is still in testing mode with zero output, according to the company’s data. The Group provided no outlook for the restoration of mining at its Sadovaya Mine and the transition of its waste recovery facility into industrial production.

Roman Topolyuk: Coal sales in November remained weak, though a bit higher than we expected. We estimate that its finished goods inventories dwindled 17% mom to around 90 kt, which the company can sell off during the next quarter at the current pace of monthly sales. We expect Sadovaya Group will report a net loss for 4Q12 and FY12 due to low sales in the current quarter (they tend to be more than twice as low as compared to 3Q12), high fixed costs and interest expense.