Motor Sich reports 32% margin in 9M10

Motor Sich (UX: MSICH UK), the Ukraine-based helicopter and aircraft engine manufacturer, reported 9M10 revenue of USD 406 mln, up an impressive 29% y-o-y. EBITDA amounted to USD 128 mln, with a margin of 32% (up from 30% in 1H10 and 1 pp down from 33% in 9M09). Net income amounted to USD 89 mln (margin of 22%, up 1 pp from 1H10 and 9M09). Yegor Samusenko: Though revenue growth of 29% y-o-y is higher than what we expect for 2010E (16% y-o-y), the whole year figure might contract from that posted in 9M10 because in 2009 the company posted weak results in the first half of the year, but compensated with strong figures in the second half. Contrary to last year’s trend, Motor Sich’s quarterly results appear less skewed this year. Nevertheless, the company is trading at 3.1 EV/EBITDA 10E and we confirm our BUY recommendation with target of USD 380 per share.