It is reported that Avdiivka Coke has posted a negative UAH 22 million result in FY10 in the announcement for the annual AGM implying UAH 203mn loss for the 4Q10 and deepening the negative UAH 91 million bottom line of the Q3 2010.

According to Millennium Capital analyst “The news is NEGATIVE for AVDK. The earnings missed our Q4 2010 target by more than UAH 300 million despite higher volumes and stronger coke prices in the quarter. However, we expected the miss after Azovstal reported sequentially weak Q4 2010 results earlier in Mar apparently caused by heavier transfer pricing on Metinvest behalf. Regarding AVDK we suggest the negative outcome is driven by the intensifying earnings redistribution within Metinvest as well. Moreover, we suggest this situation will most likely last through the entire FY11. Nevertheless, we expect muted reaction from the market in the eve of the forthcoming AGM which may potentially approve substantial dividends from the retained earnings of the previous years. In our view, the positive decision is likely given the recent deterioration in transfer pricing at both Azovstal and Avdiivka which flags the apparent cash needs of parent Metinvest.”

(Sourced from Millennium Capital)