Daily monitor

Today MHP [MHPC LI, BUY] posted strong financial 1H10 results. Revenue increased by 39% YoY to USD 423 mln (1H09: USD 304 mln). EBITDA increased by 4% YoY to USD 133 mln (1H09: USD 127 mln). EBITDA margin remains high, however it decreased to 31% from 42% in 1H09. Net income grew by 14% YoY to USD 102 mln versus USD 90 mln in 1H09 partially due to the foreign currency gains.

Ukrainian Machine Building Holding (Cyprus), member of SCM Group has consolidated 50.05% share of Donetskgirmash [DGRM UZ].

Zaporizhstal [ZPST UK], one of the largest Ukraine’s steelmakers, intends to carry out production test of PCI-unit in September. According to a Company’s representative, installation and construction work was finished and the unit is now ready for further hot tests.

According to Viktor Chyornyi, the deputy general director of Ukrzaliznytsya, the company experiences deficit of rolling stock due to the cropping campaign and preparation to the heating season which requires coal transportation increase. Total amount of cargo freight car deficit is estimated at 2,000 units, which administration plans to purchase by the end of 2010.

Druzhkivka Machine Building [DRMZ UZ] has won a tender for supplying technical equipment for the “Torezantracit” state company. The overall contract amounts to USD 9mln. The Kharkiv Machine Building facility “Svitlo Shakhtarya” [HMBZ UZ] received a lesser part of the order – equipment with an overall cost of USD 1.4mln.

In July 2010, AvtoKrAZ [KRAZ UZ], the only Ukrainian heavy-duty truck producer, shortened its production by 22.1% MoM to 81 units. 7m2010 witnessed the company raising production 6.2 times YoY to 502 trucks.

The Cabinet of Ministers has postponed consideration of the imposition of quotas on grain exports until its next meeting on August 25, because this issue should be coordinated with the Ministry of Economy. Quotas for export are expected to be at a level of 1 mln tonnes for barley, 1.5 mln tonnes for wheat, and 0.01 mln tonnes for rye. Additionally, 1 mln tonnes of grain that are already located in ports will be exported. It is expected that these quotas will not affect maize export.

According to Ukrainian News, the Antimonopoly Committee of Ukraine approved a merger between Mariupol Illich ISW [MMKI UK] and the largest vertically integrated metallurgical holding, Metinvest. Following the deal, Metinvest Holding should control a substantial share of the Ukrainian metallurgical market. Given this fact, the Antimonopoly Committee has imposed several restrictions on the company to regulate supplies of HRC, dolomite, and limestone on the internal market as well prices for these types of production.

During January-July 2010, Zaporizhya Automobile Plant, a member of the UkrAvto Corporation [AVTO_UZ], increased its share of exports in total sales to 51.8% (compared to 38.1% in 7m 2009). The total volume of exports accounted for 10.6 thsd units out of 20.5 thsd produced (in 7m 2009 – the overall volume of exports was 12 thsd out of 31.7 thsd units produced).

Zaporizhtransformator [ZATR UZ], the leading Ukrainian producer of electrical equipment, has won a tender for supplying equipment with overall value of USD 2 mln to a new combined cycle power plant recently built in Bolgrad, in the Odessa region, by Energoatom. Zaporizhtransformator has recently supplied equipment for the Nyagan power plant (Russia), which also uses combined cycle technology.