Kryukiv cuts 2013 production guidance as a result of reduced demand

Kryukiv Railcar (KVBZ UK) cut its full-year freight railcar production guidance to 6,000 units in 2013 (down 45% yoy and 25% below its previous guidance in May), the company’s CEO said on August 29. Kryukiv’s freight railcar production fell 32% yoy to 4,473 units in 7M13, while passenger railcar output grew 22% yoy to 55 units for the same period. Management expects a modest recovery in demand for freight railcars in 2014, driven by the potential renovation of Ukrzaliznytsia’s railcar park. Roman Dmytrenko: We believe the company’s new production outlook for 2013 to be overly conservative and expect Kryukiv to produce 7,150 freight railcars this year (down 35% yoy). In addition, the company’s exposure to the passenger rail segment will likely soften the revenue drop for the year. Overall, we expect Kryukiv to report USD 655 mln in revenue (a 22% yoy decline) and a 35% yoy drop in EBITDA to USD 82 mln for 2013.