KDM Shipping ups EBITDA 2% on 2% sales decline in 9M12

KDM Shipping (KDM PW), a Ukrainian maritime shipping company, reported a 2.2% yoy decline in revenue in 9M12 (to USD 19.2 mln), as an 11% decline in freight transportation revenue, its core segment, was only partially offset by 1.6x yoy growth in passenger transportation. Its third segment, ship repair, showed flat revenue yoy and a 33% decline in gross profit on increased costs. As KDM Shipping’s freight segments demonstrated improved profits, the company was able to raise consolidated EBITDA 2.3% yoy to USD 10.5 mln. The company’s operating cash flow before working capital changes improved 6% to USD 11.0 mln in 9M12. Net profit fell 7.4% yoy (USD 0.7 mln) to USD 9.1 mln – the decline is mostly explained by a USD 600,000 increase in D&A expenses. The USD 7.9 mln cash balance as of end-September consists of proceeds from its July IPO on the Warsaw Stock Exchange.

Roman Topolyuk: Despite the yoy decline in its top- and bottom lines in 9M12, the company reported high margins and a strong balance sheet (net funds of USD 3.5 mln, as of September 2012). In 4Q12, the company may start to actively implement part of its investment program announced previously, allocating almost all its IPO proceeds and placing orders for two additional vessels. These vessels, once purchased presumably in 2013, will potentially increase KDM revenue by 17-20%.