Stakhaniv Wagon decreases net income by 14% y-o-y in 1H11

Stakhaniv Wagon’s (UX: SVGZ UK) net income declined by 14% y-o-y to UAH 120.8 mln in 1H11, while gross revenues grew by 63% y-o-y to UAH 2.0 bln, the company reported yesterday in a press release. In terms of production, the company made 4,100 freight railcars in 1H11, up 13% y-o-y; previously, publication RZD-Partner estimated the company’s output at 3,700 units. Stakhaniv Wagon’s management confirmed plans to produce 8,000 freight railcars in 2011F. Vitaly Gorovoy: The company had a similar decline in net income in 1H10, which we relate to high casting prices. Stakhaniv Wagon’s main casting source is its main client – Russia’s VTB Leasing. We expect the situation to improve in 2H11 when the Ukrainian company diversifies its casting suppliers, after completing a deal to buy a Czech casting plant. We expect revenues to increase by 38% y-o-y to UAH 4.2 bln and net income to grow by 11% to UAH 440.7 mln in 2011E.