Power supply to Avdiyivka Coke partially restored

Обзоры по компаниям и отраслям 30.07.2014 Avdiyivka Coke (AVDK UK), Metinvest’s core coke provider, had its power lines restored on July 29 after the plant was disconnected amid armed fighting in the city of Avdiyivka, Metinvest reported the same day. The holding stressed that the risk of new disconnections still exists as only two of four power lines leading to the plant have been restored. Roman Topolyuk: The news is definitely positive for Avdiyivka Coke, which faced a risk of irrevocable damage to its key production facilities, coke batteries, had the disconnection continued a bit longer. With the power supply restored, the enterprise will likely keep its coke batteries in a safer “hot conservation” mode. It will be able to start ramping up production back to normal volumes (about 300 kt of coke per month) once Ukrainian forces move further away from the production site. That might happen very soon, given that the press center of the anti-terrorist operation reported the morning of July 30 that Avdiyivka city has been freed from the separatists. On top of problems with electricity supplies, disruptions have been reported in the railway connections in the hot zones of Donbas, preventing the normal delivery of raw materials and products. AVDK stock was a drag on the UX Index yesterday in reaction to the disconnection (-3.4%) but today it will likely recover from that loss. We do not expect any significant upward move for the stock afterwards, given that all the events in Donbas should lead to a worsening in the plant’s operating and financial results in 3Q14.