Stakhanov Railcar boosts profitability on falling sales
29 July 2013
Stakhanov Railcar (SVGZ UK) increased EBITDA 69% yoy to UAH 134 mln in 1H13, the company reported on July 26. Net income grew 63% yoy to UAH 56 mln in 1H13, while revenue fell 36% yoy to UAH 986 mln on a 10% decrease in freight railcar average sale price to UAH 560K and a 29% yoy decrease in production volume to 1,919 units in 1H13. On a quarterly basis, Stakhanov’s net income surged 85% qoq to UAH 36 mln in 2Q13.
In terms of production, Stakhanov has refocused on grain and chemical hopper railcars. The share of gondola railcars in the company’s production mix fell 7x yoy to just 9.2% in 1H13.
Roman Dmytrenko: The boost in the company’s profitability looks unsustainable amid the market headwinds Stakhanov Railcar is currently facing. It might have been the result of the pricing of its key freight railcar component – bogie castings – which Stakhanov purchases from its related party.
Nevertheless, we like the company’s shift in production towards hopper railcars. We believe specialized railcars in the CIS region have much better prospects for demand than the gondola railcar market, which has reached saturation.
