Motor Sich P&L worsens in 3Q17
27 October 2017
Ukrainian aeronautics engine producer Motor Sich (MSICH UK) boosted its net revenue 21% yoy to UAH 9.11 bln in 9M17, according to its Oct. 26 regulatory filing. Its EBITDA improved 19% yoy to UAH 3.73 bln and net profit advanced 37% yoy to UAH 2.58 bln in 9M17.
The result implies that all the company’s P&L indicators significantly worsened in 3Q17 alone. In particular, Motor Sich generated UAH 2.19 bln in net revenue in the quarter (down 11% yoy and 37% qoq), UAH 0.75 bln in EBITDA (down 27% yoy and 40% qoq) and UAH 0.29 bln in net profit (down 52% yoy and 65% qoq).
Alexander Paraschiy: The company’s 3Q17 P&L weakening looks temporary and most likely is related to some delay in the shipment of its finished products. In particular, it boosted its inventory of finished goods by 29% qoq to UAH 1.27 bln and work in progress by 6% qoq to UAH 9.96 bln during the quarter. Therefore, we continue to expect Motor Sich will improve all its P&L indicators in full-year 2017 and we see short-term growth potential for MSICH stock, which trades at less than 1.5x EV/EBITDA. At the same time, we continue to see a risk for the company’s mid-term future, given a lack of clarity with its ownership structure.
