News June 2009

In spite of financial & economic crisis, which affected very hard the world automotive industry, UkrAVTO group was keeping profitable activities in the first quarter of 2009. Total profit of the Group during this period amounted to 79 200 thsd. UAH, while EBITDA amounted to 247 700 thsd. UAH. During three months of the current year the companies of Corporation provided auto services and sold spare parts 30% more compared with similar period of the previous year. Only the volume of auto services amounted to 97,6 mln. UAH, volume of sold spare parts - 271,6 mln. UAH. Keeping financial stability of UkrAVTO Group influences the destiny of remaining 20 thousands of employees, engaged both in production and in sales of cars, spare parts and services in Ukraine. Besides, nearly 900 Ukrainian partners and suppliers of materials and components have the possibility to keep on their activities due to financial stability manifested by UkrAVTO Group.  

World financial crisis has changed radically the existing business environment of Ukraine. Large scale of problems and unprecedented challenges had not left any chances to a lot of companies, which could not or had no time to adapt to the new realities of management. The changed conditions dictate to the markets not only the new rules of operation, but also other time rates for taking and implementing the managerial decisions.

"Now we already can say that management of UkrAVTO Corporation within the shortest possible time succeeded not only to evaluate adequately the situation, work-out and take tough managerial decisions, but also to implement them at all levels, having obtained the effect already if the first quarter of this year,  - Sergey Polischuk, Head of Financial & Economic Department of UkrAVTO Corporation, said. - Reorganization of work concerned actually all business processes in the company: the structure was changed, strict optimization of all expenses was introduced, decision taking and planning processes were centralized". 

Active search for the new markets for products' sales became an important step, aimed at utilization of production facilities of automotive plants under conditions of forecasted decrease of Ukrainian market. Thus, the company managed not only to keep its positions on the traditional markets - in Russia, Armenia, Belarus, but also to extend export opportunities. In the current year ZAZ products are being sold in Kazakhstan, Moldova, Azerbaijan, Italy and some other countries. Zaporizhia Automobile Building Plant started to supply KD-sets and components for Lanos car to Egypt. Expansion of sales geography resulted in the essential increase of the share of export proceeds in the total amount of financial arrivals of Zaporizhia Automobile Building Plant fro 30% to 50%.

Keeping the financial liquidity of the company on sufficient level, fulfillment of obligations to numerous suppliers and banks became an important result of activities during the first months of economic crisis. At the same time we succeeded to maintain equal structure of cars' stock yards. This, in its turn, even after the increase of import duty, enabled to offer to the customers the cars of all brands represented by the Group, with all variety of options and by competitive prices. Favorable price positioning entailed revival of demand and increased the inflow of circulating funds. And strengthening of hryvnia in the latest weeks enables to make price proposals even more attractive for the customers and to make more active the sales of certain car brands, represented by UkrAVTO Corporation.

Longstanding reputation of reliable borrower and transparency in relations with the banks enabled not only to fulfill timely and accurately the obligations to all financial institutions, but also to reach proper mutual understanding in prolongation of credit lines. Such complex of efficient measures enabled to reduce the credit burden of the Group for 320 million USD during 7 months. The Company also expresses its gratitude for loyalty and understanding during negotiations about delivery and payment terms, as well as purchasing prices to all production and sales partners and suppliers.

Positive results of activities, achieved by the Company, became the basis for new strategic cooperation with the world car manufacturer - KIA Motors. IN spring of the current year UkrAVTO Corporation also won the tender for official distribution of commercial vehicles from Mitsubishi Fuzo in Ukraine. The new signed contracts reflect the potential of Corporation, its image and financial welfare, that, undoubtedly, will give new positive pulse to customers and market.

 Reference information 

Ukrainian Motor Corporation - is a transnational corporation, the leader of automotive market in Ukraine; the largest manufacturer and distributor of vehicles, provider of high-quality auto services; the only company in Ukraine with full cycle of cars' production; exporter of cars to CIS countries.

The Corporation combines large-scale automobile building production in Ukraine and Poland, as well as the largest sales network in Ukraine, Poland, Russia and Kazakhstan.