Motor Sich targets UAH 250-260 mln in net income in 2009

Motor Sich (MSICH) CEO Vyacheslav Boguslayev said that the company is targeting net income of UAH 250-260 mln (USD 30-31 mln) in 2009, Interfax reported, citing a press conference on Saturday. Boguslayev said production is expected to increase 17-18% yoy this year, and by 40% yoy in 2010. Boguslayev also said that his company expects to earn USD 200 mln from a soon-to-be signed contract with the Indian armed forces for aircraft maintenance. Boguslayev said the contract would have a four-year term. Yegor Samusenko: The forecast by Motor Sich’s CEO corresponds to the projections from our July 31 note. We expect Motor Sich to post net income of USD 31 mln this year (margin of 8.1%, up 7.9 pp yoy). In terms of the Indian contract, India and Ukraine signed preliminary documents to repair An-32 airplanes in June 2009. Previous news reports stated that Motor Sich would receive only USD 150 mln in revenue from the deal, vs. the USD 200 mln Motor Sich’s CEO now says it would get. We expect a moderately positive effect of the news on the stock and retain our target price of USD 175 per share.