AvtoVAZ reported an underlying net profit of Rubles 700m (US$23m) in the first half of this year, compared with a loss of Rubles 500m in the same period a year earlier.
For the first six months, the OEM’s sales in the domestic market declined 14% to 250,732 vehicles, Reuters reports, citing AvtoVAZ. This drop in sales has been attributed to the end of an incentive programme introduced by the government to boost sales.
For the full year, AvtoVAZ’s sales in Russia are expected to drop by around 9% year-on-year to 525,000-530,000 units. On the other hand, PricewaterhouseCoopers has predicted a 4% growth in total industry volume in Russia to around 2.6 million vehicles.
In the first half of this year, AvtoVAZ’s earnings before interest, taxation, depreciation and amortisation increased by 23% to Rubles 5.4bn. The OEM has not, however, provided any explanation concerning this increase. The report, citing Mikhail Pak, an analyst with Aton, believes that unspecified asset sales, reckoned to be worth Rubles 2.5bn, resulted in this growth. “Our estimates show that they would have posted a loss if no sale was made,” Reuters quotes Pak as saying.
AvtoVAZ’s reported net profit shot up to Rubles 27.4bn in the first half of this year. This included a non-cash gain from extending the repayment period on its debt. Discounting the cost of future debt payments added Rubles 26.7bn to the company’s overall net profit, the report said.
