Avdiivka Coke boosted its net income by 134% YoY to USD 16 million in Q1 of 2011 in dollar equivalents, Interfax reported on Tuesday, May 24. The company net sales jumped 81% YoY to USD 343 million and added 19% QoQ in Q4 of 2010.

Phoenix Capital analyst said “The positive result follows a quarter of USD 46 million in outstanding net losses in Q4 of 2010, which caused the stock’s underperformance. We estimate the rebound is the result of a price spread for coke and coking coal that widened by 11% to USD 125 in Q1 of 2011. Additionally, since gross coke production rose by 1% QoQ and coke prices added 6% to 10%, we partly attribute its 19% revenue increase to higher coke byproduct prices.”

He added “Avdiivka’s financial growth will persist considering the price spread gained 17% since the start of 2Q11 to USD 148 per tonne, the amount of costly coal imports from Metinvest’s American subsidiary is limited to 70,000 tonnes per month, and the price for imported coal from Russia has stabilized at USD 260 per tonne in May. Moreover, global producers and consumers of coking coal are negotiating at least a 5% decrease in prices for Q3 of 2011, implying an easing of the cost side for coke producers. Under such circumstances, and having reported USD 16 million in net income for Q1 of 2011, Avdiivka Coke is likely to beat our forecast of USD 43 million for its 2011 bottom line.”

(Sourced from www.phoenix-capital.ua)