JSW Coal Miner Plunges to Record Low Before Earnings Release

JSW SA, the European Union’s biggest coking-coal producer, tumbled to a record after delaying its earnings release. UniCredit SpA said the stock may drop further.

The shares fell 6.5 percent to 36.3 zloty, the lowest since its 2011 debut, at the close in Warsaw. The state-controlled miner’s stock has lost 32 percent this year, the worst performance in the WIG30 Index. JSW delayed the release of its second-quarter earnings by six days until Aug. 13, it said in a regulatory filing this week without giving a reason.

The company may report its third loss in the last four quarters as a global glut of coal used by steelmakers cut the benchmark price to a six-year low, a Bloomberg survey shows. The coking-coal price may stay low for the “next few years,” Moody’s Investors Service said in a report on July 11.

“Investors want to unload shares before the release of poor results,” Marcin Gatarz, an analyst at UniCredit SpA in Warsaw, said by phone today. “JSW may dive even more as market conditions are still very weak.”

The benchmark coking-coal price in the second quarter fell to $120 a ton and is unchanged in the current quarter, according to data compiled by Bloomberg. The price could rise to about $140 a ton by the end of 2015, Moody’s said in its note. The ratings company cited a drop in Chinese imports, a “ramp-up” in Australian production and the “downshifting of the global cost curve” as reasons for lower prices.

Annual Loss

JSW will probably post its first annual loss since 2009 this year, according to the average estimate of 13 analysts surveyed by Bloomberg. The forecast is for a loss of 446.6 million zloty ($142 million), compared with a profit of 77.3 million zloty last year when the average benchmark coal price was $158 a ton.

Coking-coal prices may rise in the fourth quarter, Chief Executive Officer Jaroslaw Zagorowski said in an interview with Parkiet newspaper July 23.

Eleven of 17 analysts advise selling JSW shares, according to data compiled by Bloomberg. JSW’s 14-day relative strength index declined to 21 percent from 27 percent yesterday. A reading below 30 indicates to some technical analysts a stock may be oversold.

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