Ukrainian railcar producers increase output 3.0x y-o-y in 9M10

Ukrainian railcar producers reported 9M10 output results, according to the website Promishlennie Gruzi. The total output of the big four Ukrainian producers grew 3x y-o-y to 23,900 railcars, the highest figure ever. Yegor Samusenko: All Ukrainian plants are continuing to work at full capacity, driven by a strong order book from Russian railcar operators. We expect these results to transform into solid 3Q10 revenue (supported by ~10% price growth), which should be available in late November, especially for Kryukiv Wagon (11% output growth q-o-q). Stakhaniv Railcar’s results might be less positive due to a 9% q-o-q decline in output in 3Q10, though its revenue recognition policy does not always correspond with output data. Profitability, however, might be temporarily contracted due to its VAT bond sale in September at 80-85% of nominal value, resulting in losses amounting to 15-20% of the face value of the VAT debt.

———————-  ———–      ——  ——-  ——
    Company             Ticker            9M09    9M10     Chg
———————-  ———–      ——  ——-  ——
Azovmash                AZGM, MZVM 3,403    8,663    1.5x
Kryukiv                     KVBZ          1,604    6,899    3.3x
Stakhaniv                  SVGZ            604    5,234    7.5x
Dniprovagonmash      DNVM            284    3,098    9.9x
———————-  ———–   ——  ——-  ——
Total Big-4                                  5,905   23,894    3.0x
CIS Total                                   22,080   63,715    1.8x
———————-  ———–   ——  ——-  ——-                                                
Big-4 producers share,%               26.7%    37.5%