On December 11, UTair released its FY05 IAS financials. The company reported a rise in all headline financial indicators.
| Indicator | 2004 | 2005 | Chng |
| Revenue, $ mln |
288.8 |
427.7 |
48.1% |
| COGS, $ mln |
287.0 |
400.1 |
39.4% |
| EBITDA, $ mln |
17.5 |
48.3 |
176.1% |
| EBITDA margin |
6.1% |
11.3% |
|
| Net profit, $ mln |
6.9 |
14.1 |
103.8% |
| Net profit margin |
2.4% |
3.3% |
|
The company saw stronger performance during a difficult period for the entire industry. Needless to say, this makes upbeat results even more successful. The threat of international terrorist attacks coupled with major fuel price hikes undermined the industry's potential in 2005.
The air carrier posted 48% topline growth to $427.7 mln. According to the company's formal spokesperson, UTair managed to achieve such results due to "more efficient use of available air vessels and acquisition of new ones" coupled with "successful implementation of production plans to boost helicopter services".
The company's EBITDA surged 176% to $48.3 mln. According to the same source, such significant rise in this indicator is attributable to "containment of aviation fuel costs" and "successful business diversification".
The company's net profit more than doubled y-o-y to $14.1 mln. In addition, the entire profit was generated by helicopter services, while passenger traffic remained loss-making.
We view the released financial report as upbeat and believe it again underscored the company's investment appeal in terms of fundamentals. Taking into account the company's plans to "focus on the helicopter business", we expect UTair's financial and operating results to further strengthen. We assign a Buy recommendation to UTair with an estimated target price of $0.71 per share.
0.244
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