Azovmash’s 1H08 sales increased by 50% y-o-y to UAH 2.95 bln ($608 mln), equaling the company’s sales figures from 9M07. Output grew by just 8.2%, and the nominal increase in sales was the result of the introduction of new higher-value-added products such as automobile transportation railcars. The continued growth of railcar prices is another factor behind the jump in sales, as prices for several types of railcars grew by 30% in 6M08. According to our estimates, Azovmash’s June output volume of nearly 1,000 railcars was the highest monthly output this year.
Azovmash monthly railcar output, units
Source: Company data
We see this news as POSITIVE for the company and expect both monthly output volumes and sales growth numbers to increase further. Owing to the expansion of its steel-casting production facilities and the optimization of the production process, Azovmash is currently behind schedule on its planned output volume for the year. After these improvements have been completed, we can expect monthly output volumes to reach the 1,000 railcar benchmark.
Denis Shauruk Analyst (+380 44) 490-1721
