MZVM Increases Net Revenues By 25% To USD 324.2 - Boosts Profitability In 9M05.

The company?s (MZVM: BUY) EBITDA margin increased from 1% in 9M05 to 4% (EBITDA increase by 234% to USD 12.7 mln), while its net margin grew from 0.04% to 1% (Net income increase by 3563% to USD 4.0 mln). Concorde Capital: MZVM?s potential to increase officially reported profitability is the main driver for our BUY recommendation. To some extent the increase in EBITDA and net margins is connected to the yoy decrease in steel prices. Nevertheless, we believe that most of the company?s profits are not disclosed due to transfer pricing. More transparency in financial reporting is expected in the mid-term which will push MZVM margins closer to 13% (EBITDA) and 18% (Net).