Page 94 - bne IntelliNews Russia Country report May 2017

with Bipek-auto from Kazakhstan. It was reported earlier that Avtovaz might begin exporting Lada 4x4 to China before the end of the year. Maure also noted that the company reduced export forecast for 2017 from 30,000 to 25,000 cars. According to the CEO, revision of the forecast happened against the backdrop of a weak market in Kazakhstan and due to utilization fee introduced last year in the country.
9.2.3 Aviation corporate news
Aeroflot passenger traffic jumps 21% in April. Aeroflot carried 9.9mn passengers in April (+20.9% y/y). Domestic passenger traffic increased 14.4%, while international traffic soared 30%. Passenger turnover rose 23%, with the passenger load factor for the month leaping to an impressive 82.7% (vs 79.4% a year ago). In total Aeroflot carried 14.15mn passengers for 4M17 (+15.9%), including +25% on international flights, and 9.6% on domestic flights. The results are extremely strong. They show that traffic continues to accelerate every month at a very rapid pace, and that load factor is very high. The nature of this growth is not very clear to us taking into account the fairly weak economic environment. However, if the current trend is sustained until the end of this year, Aeroflot's EBITDA may exceed RUB90bn for 2017 (+10.3%), which implies a 2017E EV/EBITDA of 3.25x.
Russian manufacturers of the new medium-haul MC-21 airliner have so far received 185 pre-paid orders for the aircraft , TASS quoted Deputy Prime Minister Dmitry Rogozin as saying on May 25. The MC-21 is the family of short-and medium-haul narrow-body passenger jets intended to replace the workhorse Tupolev Tu-134 and Tu-154 series aircraft and their Western rivals. In early May, Russia’s Industry and Trade Minister Denis Manturov said flight tests of the MC-21 airliner would begin in several weeks. Aeroflot, Russia's flagship airline, was the first customer for the plane and is expected to have 50 MC-21s in its fleet. The delivery will be financed by the lease company Aviakapital-servis. A firm contract for the deliveries of these airliners was signed in 2011. In April 2017, Aeroflot CEO Vitaly Savelyev said the first three airliners are expected to be delivered in 2019. In January 2017, Rogozin prepared a proposal stipulating that the most profitable domestic and international airline routes be granted to carriers that use Russian-built jets. Reportedly, the proposal was informally approved by President Vladimir Putin.
9.2.4 Construction & Real estate corporate news
Russia's largest property developer PIK is to see a 30% gross margin and 23% Ebitda margin , VTB Capital said in a research note published on May 25. According to VTB Capital, the company's pre-sales are to increase 1.8x y/y to 1.7mn square metres, while limited pre-development and land acquisition needs provide an average free-cash flow yield of 12% in 2017-2021. "We see full deleveraging in three years and expect a dividend policy update in June," VTB Capital added. PIK recently acquired another developer, Morton, which made the company the undisputed leader in Russia's property development market. In 2014-2015, Morton commissioned the largest volumes on the Russian residential market (2mn sqm). The deal increased PIK's portfolio 4.6mn sqm to 12.5mn sqm, doubled DSK capacity to 1mn sqm, and provided the potential for up to RUB10bn (€158mn) in synergies.
94 RUSSIA Country Report May 2017 www.intellinews.com