Lutsk Automobile Directs 2006 Net Income Into Development

Lutsk Automobile Plant’s (LUAZ) AGM yesterday approved 2006 results: net revenues of USD 421 mln (+96% yoy) and net income of USD 19.93 mln (+4.4% yoy). Shareholders voted against paying dividends, and to direct 5% of net income to retained earnings and 95% into the company’s development. The company’s 2006 net margin fell to 4.7% (from 8.9% in 2005) due to cost hikes in wages and energy. The supervisory board, chairman of the board and auditing commission were all re-elected. The company announced plans to again double sales in 2007 to USD 934 mln and to increase its net margin to 8.0%. Inna Perepelytsya: The decision not to pay dividends makes sense given the company’s ambitious expansion plans to boost output through the construction of new production lines in 2008. After production begins on the new lines, management is planning an IPO in 2009-2010.