Sadovaya reports USD 4.3 mln net loss in 1Q13

Sadovaya reports USD 4.3 mln net loss in 1Q13



16 травня 2013 года
Конкорд Капитал

Sadovaya Group (SGR)


Sadovaya Group (SGR PW) reported on May 15 a 50x yoy plunge in revenue to a mere USD 0.29 mln in 1Q13 on a 39x yoy fall in coal sales to 4.9 kt. The company posted a USD 3.8 mln operating loss for the period versus USD 0.07 mln in operating profit a year ago, and a USD 4.3 mln net loss compared to USD 0.7 mln in net profit in 1Q13.



Sadovaya's cash flow statement revealed that it managed to generate USD 1.8 mln in net operating cash flow in 1Q13, mainly via a USD 2.3 mln increase in payables, thus partly covering USD 1.97 mln in loan repayments. The firm disclosed no update on its mining outlook, reiterating plans to sell 5 kt of coal from its waste recovery facility in May on an export contract.



Roman Topolyuk: Sadovaya’s negative bottom line came in worse than our expectation of USD 4 mln in 1Q1,3 mainly owing to aggravated expenses, which resulted from keeping mines idle (related expenses grew 11% qoq to 2.8 mln). The selling coal price slid 21% qoq to USD 58.5 per ton, indicating further weakening in the coal market. The company’s tactics to use working capital to service its debt is not sustainable, we believe, despite the current ratio of 3.1x as of end-March 2013. About 57% of its inventories are raw materials, which are rather illiquid assets under current market conditions, and trade receivables also look illiquid, with the company having already written down USD 4 mln. Given the uncertainty about Sadovaya’s future, we do not believe its stock is worth investing in.

Источник: Конкорд Капитал

Аналитик: Роман Тополюк
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