Sadovaya halts mining as of mid-October

Sadovaya halts mining as of mid-October



19 жовтня 2012 года
Конкорд Капитал

Sadovaya Group (SGR)


Sadovaya Group (SGR PW) temporarily discontinued operations at Sadovaya Mine (51% of the group’s mining) since mid-October, according a report yesterday. The company attributed the suspension to weakness on the domestic coal market. In addition, Sadovaya said its other key mining subsidiary, Rassvet-1, will conduct planned repair work in October. Sadovaya’s waste reprocessing facility continues to operate in testing mode. The company reported an increase in coal sales by 29% mom to 56 kt and in coal mining by 11% mom to 56 kt in September. In 9M12, coal sales are down 40% yoy at 521 kt, but coal extraction grew 15% to 373 kt.

Roman Topolyuk: Clearly, the news is strongly negative for Sadovaya stock. The monthly improvement in coal sales and production in September is outweighed by plans to halt operations at both mining subsidiaries and an uncertain outlook for the future. The stockpiles of anthracite coal (key output of Sadovaya) at Ukrainian thermal power plants grew 23% mom during October to 2.8 mmt, which is 45% higher yoy, according to our estimates based on Energobizness data. This lowers the chances of a quick restoration in coal demand on the domestic market.

Источник: Конкорд Капитал

Аналитик: Роман Тополюк
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