Kryukiv Wagon to deliver 18 passenger railcars to Ukrzaliznytsya in 2011

Kryukiv Wagon (UX: KVBZ UK) signed a contract to deliver 18 passenger railcars to Ukrzaliznytsya in 2011, according to a company press release issued yesterday. Yegor Samusenko: This order will add approximately USD 15 mln to Kryukiv Wagon’s revenues in 2011. Currently, the company is focused on high-volume but lower-margin freight car production while its passenger railcar shops are working at low capacity. With orders for passenger railcars coming only from state-owned monopoly Ukrzaliznytsya, we model only 50 passenger cars (7% of total forecasted revenue) to be produced in 2011, while nominal capacity is 200 cars per year. Though Ukrzaliznytsya’s passenger railcar fleet is in dire need of modernization, we do not see demand reviving more rapidly until Ukrzaliznytsya attracts significant debt financing.