Motor Sich improves P&L in 1H20

31 July 2020

Ukraine’s leading aeronautics producer Motor Sich (MSICH UK) reported a 16% yoy increase in net revenue to UAH 4,739 mln in 1H20. Its EBITDA surged 14x yoy to UAH 1,529 mln and its bottom line turned to positive UAH 593 mln in 1H20, from negative UAH 426 mln a year before. The company’s net debt climbed 11% YTD to UAH 1,918 mln as of end-June. Management said in its quarterly report it has optimized its activity to focus on the projects that are paying back in the short term. It also reported that the terms of international trade were supportive for the company in 2Q20.

 

In 2Q20, Motor Sich’s improved revenue by 36% yoy (and 30% qoq) to UAH 2,683 mln and generated UAH 814 mln of net profit (vs. losses of over UAH 200 mln in both 1Q20 and 2Q19).

 

Alexander Paraschiy: The boosted 1H20 revenue – which allowed the company to benefit from high operating leverage – coupled with some cost-cutting measures enabled the firm to improve significantly its operating profit. At the same time, the stronger hryvnia in 2Q20 allowed the company to reduce costs related to debt revaluation (most of its debt is denominated in foreign currency).

 

Overall, it's positive to see the company improve its fundamentals despite an ongoing conflict about its ownership, in which Chinese and American interests are involved. Meanwhile, the company’s shares remain banned from trading, with unclear prospects of resolving the issue.

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