Motor Sich raises net revenue 52.1% yoy in 1H09

Motor Sich (MSICH) posted net revenue of UAH 1.27 bln in 1H09, an increase of 52.1% yoy. The company also said that its gross income during the period amounted to UAH 555.2 mln (up 86.5% yoy), operating income was UAH 334.3 mln (up 10.7x yoy), and net income was UAH 253.9 mln (up 47.5x yoy). Yegor Samusenko: Motor Sich’s 1H09 results outperformed our expectations (see our note of July 31). Its EBITDA margin was 30%: up 20 pp from 1H08 and 10 pp higher than we expect for 2009E. Generally, Motor Sich’s operating results and bottom line fluctuate over quarters, thus we do not expect the company to retain this high profitability until the end of the year. Motor Sich’s high EBITDA in 1H09 can be explained by gains from the hryvnya’s depreciation: with its long production cycle, the company currently receives UAH 8 for every dollar of exports while its costs stand at 5 UAH per dollar. We rate Motor Sich BUY with a fair price of USD 150.