Stakhanov Railcar improves bottom line despite sales decline in 9M13

Stakhanov Railcar improves bottom line despite sales decline in 9M13



25 жовтня 2013 года
Конкорд Капитал

Стахановский вагоностроительный завод (SVGZ)


Stakhanov Railcar (SVGZ UK) reported its revenue decreased 41% yoy to UAH 1,320 mln in 9M13, caused by a 37% yoy decline in freight railcars sales to 2,518 units and a 5% yoy decline in the average price of a railcar. Sales of Stakhanov’s standard gondola cars fell 5x yoy to 517 units, while sales of specialized cars rose 37% yoy to 2,001 units. The company supplied 270 railcars to a related company, the Poltava Mine of Ferrexpo (FXPO LN).



Despite output declines, the company’s profit strengthened: EBITDA improved 2.7x yoy to UAH 169 mln and bottom line surged to UAH 49 mln in 9M13 (vs. losses of UAH 17 mln in 9M12).



In 3Q13, Stakhanov’s railcar sales dropped 2.2x yoy to 599 units, revenue slid 2.1x yoy to UAH 333 mln, while EBITDA improved to UAH 35 mln (vs. a negative value of UAH 16 mln in 3Q12).



Alexander Paraschiy: The company’s enormous decrease in COGS was the main cause of its profitability growth, and we wonder how sustainable it is. For instance, Stakhanov’s COGS per railcar decreased 16% yoy in 9M13 (and 9% yoy in 3Q) and material costs per railcar fell 22% yoy in 9M13 (and 20% yoy in 3Q). And that’s despite the company reporting that component prices became cheaper by up to 5% yoy only.



As before, we relate this cost-cutting phenomenon to a possible supply of railcar casting parts at special prices from its related Czech-based SCB Foundry. As the company has recently initiated a broader cost-cutting program (refer to our news of October 22), we expect it will be able to remain at breakeven this and next year, provided that it maintains its business ties to the related Czech company.

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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