Metals and Mining
April 27, 2012
Avdyivka Coke disclosed disappointed earnings for 2H11 this week: EBITDA turned negative USD 35mn vs. positive USD 41mn in 1H11 while sales were down just by 3% HoH. Poor 2H11 earnings were, in our view mainly due to the heavily distorted reported financials as coke maker produced high quality coke and sold it at below the ordinary coke market price. We revise our model to incorporate higher risk of opaque financials in the medium term. Our updated DCF model derives a target price of USD 1.02 (vs. USD 1.86 previously). New TP is 65% higher than the current market price of AVDK stock.
