KAMAZ Announces 1H 2012 Financial Results
OREANDA-NEWS. October 5, 2012. KAMAZ Group announces financial results (IFRS) for the first half year of 2012.
Due to an increase in sales volume on the domestic market, implementation of the comprehensive program for enhancement of efficiency which was started at KAMAZ at the end of last year, and the introduction of the modernized lineup to the market, KAMAZ Group managed to show positive financial results.Main Operational Results of KAMAZ Group for 1H 2012
1H2011 1H2012 Difference %
Sales of vehicles, units 19,327 23,130 3,803 19.7%
Revenue, RUB mln 44,208 56,513 12,304 27.8%
Gross profit, RUB mln 6,986 9,684 2,699 38.6%
Gross profit margin, % 15.8% 17.1% 1.3%
Operating profit, RUB mln 1,035 4,262 3,227 311.7%
EBIT, % 2.3% 7.5% 5.2%
EBITDA, RUB mln 2,265 5,487 3,222 142.3%
EBITDA, % 5.1% 9.7% 4.6%
Profit, RUB mln 154 2,739 2,585 1 680.6%
Net profit margin, % 0.3% 4.8% 4.5%
Non-current borrowings, RUB mln 10,557 9,903 -654 -6.2%
Current borrowings, RUB mln 10,994 5,962 -5,032 -45.8%
Non-current financial lease payables, RUB mln 1,018 879 -138 -13.6%
Current financial lease payables, RUB mln 455 433 -22 -4.9%
Total, RUB mln 23,024 17,177 -5,847 -25.4%
Term deposits, RUB mln 7,725 2,806 -4,918 -63.7%
Cash and cash equivalents, RUB mln 3,549 4,706 1,157 32.6%
Net debt, RUB mln 11,750 9,665 -2,085 -17.7%
Net debt/EBITDA 1.8 1 0.9
1Result for 2011
The growth of the truck market enabled KAMAZ Group to increase its vehicles sales volumes in 1H 2012 to 23.1 thousand units, which is by 19.7% more than in 1H 2011: including domestic sales which amounted to 19.7 thousand units (1H 2011: 16.2 thousand units). As a result, revenue was 56.5 billion rubles in 1H 2012, which is by 27.8% more than for the same period in 2011.
In 1H 2012, KAMAZ Group got operating profit of 4.2 billion rubles against 1.0 billion rubles in 1H 2011, operating profit margin made 7.5% (1H2011: 2.3%).
In the 4th quarter of 2011, KAMAZ started implementing a comprehensive efficiency enhancement program developed on the basis of similar programs of KAMAZ’s strategic partner and shareholder – Daimler AG. The two-year program includes the following steps:
- to raise operating margin to 9% by 2014 due to increased sales volumes, higher marginality of the product portfolio, reduced production and operating costs,
- to restructure the group of companies, sell non-core assets and focus on the principal business of trucks and buses production and sales,
- to increase labour productivity,
- to increase efficiency of management of the Group’s operating capital due to the reduced operating cycle.
The implemented Program resulted in the company’s break-even in the second half of 2011 (for the first time after the crisis) and operating profit margin of 7.5% in the first half of 2012.
It should be mentioned that associate companies and joint ventures received profit of 239 million roubles for KAMAZ Group in 1H 2012 against loss of 86 million roubles in 1H 2011. Within 2 or 3 years, almost all joint ventures managed to achieve production volumes enabling to profit and continue investing their own funds in production localization.
The Group’s net profit increased from 0.2 to 2.7 billion rubles, which is 4.8% of revenue. In addition to the factors listed above, net profit grew in 1H 2012 due to reduced expenses for credit and loan interests, as well as investment loan interests subsidized by the state.
Loans and borrowings
Since the beginning of 2012, KAMAZ Group’s debt load has decreased by 5.8 billion rubles. Its financial debt made 17.2 billion rubles (December 31, 2011 – 23.0 billion rubles). KAMAZ Group’s net debt was 9.7 billion rubles (December 31, 2011 – 11.8 billion rubles.). As a result, the ratio of net debt to EBITDA declined to the pre-crisis level of 0.8 times.
The reduction of debt was caused by repayment of credits primarily in the following banks: Sberbank – 4.7 billion roubles, Ak Bars Bank – 1.5 billion roubles, VTB – 1.2 billion roubles. As of today, OJSC KAMAZ repaid all sovereign credits taken during the crisis period. KAMAZ Group managed to reduce the size of its loan portfolio having received a positive cash flow of RUB 5.7 billion which naturally followed improved profitability and tight control over the size of the circulating capital.
You can download the full version of the financial results under IFRS for the first half of 2012: