AvtoKrAZ 2006 Net Income Tops Our Expectations

AvtoKrAZ (KRAZ: HOLD) saw its net income dip 30.8% yoy to USD 11.4 mln in 2006. Earlier this month KRAZ released figures showing that its truck sales grew 2.5 times yoy in 2M07 to 617 vehicles and its truck output grew 46% yoy in 2M07 to 641 vehicles. Olha Pankiv: The company’s reported net income is almost twice higher than what we expected in 2006, and it looks like 80% of it was earned in 4Q06, when the company sold ~60% more trucks monthly than the beginning of the year. The yoy decrease in net income happened as 2005’s results were inflated with USD 6.6 mln officially reported as income from tax, which we consider as extraordinary one-time amount to correct the accumulated accounting differences between the financial and tax reports. We do not rule out the possibility of one-time profits in 2006 as well, and will be able to tell more after the company releases its official financials. KRAZ will hold its AGM on May 18.