28 October 2011
AvtoKrAZ (KRAZ UK) posted a net loss of UAH 55.0 mln in 3Q11, extending its net loss for 9M11 to UAH 113.4 mln, the company reported yesterday. Net revenues fell by 8.4% q-o-q to UAH 166.4 mln, mainly due to a decline of export sales to non-CIS countries, while COGS remained flat q-o-q at UAH 164.3 in 3Q11, which led to its gross margin for the quarter to decline by 9 pp q-o-q to 1.3%. The company increased its output by 15% y-o-y to 736 trucks in 9M11, confirming our positive view on the truck market recovery, but we see substantial risk that the company’s high leverage and average quarterly financial costs of UAH 46 mln will prevent it from breaking even in the next two years.