Kryukiv Railcar freight car output falls 50% yoy in April

Kryukiv Railcar (KVBZ UK) freight railcar production fell 30% yoy to 2,399 units in 4M13, while its April production plunged 50% yoy to 546 units, Interfax reported on May 20. Passenger railcar production grew 1.8x to 33 units in 4M13.

Roman Dmytrenko: Kryukiv’s major partner, Kremenchuk Steel Casting, was prohibited from supplying bogie frames until April 8 due to the Russian government’s certification rejections. Therefore, the drop in the company’s overall production does not look surprising. What concerns us the most is the April plunge, which can’t be attributed to bogie frames scarcity. Most likely, it’s the result of a decline in demand for freight railcars in the CIS, which has been looming over Ukrainian producers since the end of 2012. We estimate Kryukiv Railcar’s freight output will drop 35% yoy in 2013 and revenue will decline 16% yoy, with weak freight sales being partially offset by its stronger passenger rail machinery segment.