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bne June 2020 Companies & Markets I 15
month to 10,000 vehicles in April. AvtoVaz noted that its best- selling Lada models have maintained market leadership with a 20% share.
The decline followed the decision by many dealerships to close in April, while producers had to suspend production for at least part of the month. The April decline resulted in four- month sales falling 19% y/y to 415,102 units.
“We believe that a gradual easing of coronavirus-related restrictions, along with the recently announced state support, will help to reduce the decline in the coming months. Still, we estimate that the market will decline about 20% in 2020,” VTB Capital (VTBC) said in a note.
Amongst the companies analysts have many of the carmarkers marked up to Buy in anticipation of a bounce back once restrictions are lifted.
VTBC has Sollers’ shares marked to Buy with a twelve month target prices of RUB450 and a 75% upside over the same period. Sollers saw sales of its flagship UAZ utilities van sales decreasing 75% y/y to 862 units in April and 27% y/y to 8,155 units in the first four months of this year.
Meanwhile, the sales of the Ford Transit, which is produced by the joint venture with Ford and consolidated by Sollers, fell 39% y/y to 526 units in April, and 17% to 2,613 units in January-April, AEB reports.
“We believe that in the coming months, Sollers' sales are likely to benefit from increased state support, which also partly helped in April. In particular, during the recent meeting on support for the automotive industry, President Vladimir Putin instructed the government to earmark RUB20.5bn ($278mn) to support it through subsidised loans
Russia car sales (number units in period)
and leasing, as well as state purchases of vehicles (including frontloading some state purchases originally planned for later years),” VTBC says.
“According to media reports, Ford Sollers and UAZ have already signed deals with the government to supply 785 ambulances (653 and 132, respectively). We also believe that the sales of Ford Transit will get an extra boost from the development of e-commerce. In particular, Avtostat has reported that Ozon bought 87 Ford Transit vans in late April and would get over 100 more vans soon,” VTBC added.
Avtovaz, the maker of the iconic Lada, remains the market leader, but it was also badly wounded by the stop-shock and lost a quarter of its market share (26%) market share in April after sales of its Lada brand dropped by 71% y/y to 9,396 units in April and 22% y/y to 88,996 units in the first four months of this year.
The Lada-maker’s main domestic rival. GAZ, suffered almost as much, with a 58% y/y decline in LCV sales to 2,272 units in April and a 21% y/y drop to 13,369 units in the first four months of this year, reports AEB.
Russia's Sberbank income collapses, plunging by 85%, return on equity down to 3% in April, RAS results show
bne IntelliNews
Russia's largest bank Sberbank reported net income of RUB11.5bn ($155mn) in April 2020, plunging by 85% year on year and 81% month on month, and making a return on equity (ROE) of only 3%, the lowest since 2015, the Russian Accounting Standard (RAS) report showed.
As reported by bne IntelliNews, the banking sector is expected to be under severe pressure amid the coronavirus (COVID-19) crisis, but Sberbank, one of the top Russian equity exposures,
has pledged to maintain a 50% dividend payout and can count on state support.
For January-April overall net income stood at RUB230bn, down by 22% y/y, making a 15% ROE, down from Sberbank's usual 20% and higher.
"April revealed more implications from lockdown," BCS Global Markets commented on May 13, noting a decline in ROE, top
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