Jan. 25 (Bloomberg) -- OAO Mechel, Russia’s largest producer of coal for steelmaking, gained in New York after Finam Investment Holding LLC reiterated its “buy” rating on the stock and the company reported a rise in coking-coal sales.
American depositary receipts of the Moscow-based miner added 5.6 percent to $11.47 in New York, advancing for the second day this week and bringing this year’s gain to 35 percent. Mechel, which lost 71 percent in U.S. trading last year, has gone from being the worst performer on the Bloomberg Russia-U.S. 14 index of Russian stocks traded in the U.S. in 2011, to the best this year.
Moscow-based brokerage Finam cut their 12-month price target for Mechel’s ADRs to $16.80 from $23.60 as the shares have “already rallied and investors continue to be concerned about the cash flow management abilities of the company,” according to the report by analysts led by Vladimir Sergievskiy.
Mechel’s sales of coking-coal concentrate increased 9 percent to 12.5 million metric tons last year and steel production rose 1 percent to 6.12 million tons, the Moscow-based company said in a statement on Jan. 24.
The coal producer’s net debt climbed 29 percent to $9 billion in September, from the start of 2011, as the company upgraded steel mills and developed the Elga coal field in east Siberia, according to a Dec. 15 earnings statement. About $2.66 billion of Mechel debt matures this year, according to the presentation.
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