NWR Declines Most in 20 Months on Earnings Outlook: Prague Mover

New World Resources Plc tumbled the most in 20 months after saying it cannot confirm its 2013 earnings guidance as demand for coal falls and prices stagnate.

The stock of the biggest Czech coking-coal producer fell 12 percent, the most since August 2011, to 51.70 koruna, the lowest close since it began trading in May 2008. Turnover on the shares was 451 percent of the three-month daily average.

“The difficult trading environment has negatively impacted the operating performance,” the Amsterdam-registered company said today in a statement. “As a result, the 2013 full-year guidance as announced on Feb. 21, 2013 cannot be reiterated.”

The company said in February it expected to sell between 9.5 and 10.5 megatons of coal this year, equally split between coking coal used by steelmakers and the less profitable thermal coal. Stagnating prices of coal and coke, coupled with the slump in manufacturing and steelmaking, have damped first-quarter sales, it said.

The average agreed price of coking coal for deliveries in the second quarter increased 3 percent to 104 euros per ton, while the price of coke remained flat at 246 euros per ton, the NWR said in the statement.

First-quarter sales reached 1 megaton for coking coal, 1.04 megaton for thermal coal and 149 kilotons for coke, according to the statement.

“NWR is a high-cost coking coal producer at the wrong end of the quality spectrum in an environment where prices continue to fall,” Bank of America Corp analyst Jason Fairclough said in a note. He has an underperform rating on the stock.

The selloff cut the 14-day relative strength index for NWR shares to 13 today. Readings lower than 30 signal in technical analysis the asset may be oversold and poised for a rebound.

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