AVTOVAZ today announced results of its fiscal year 2014, under Russian Accounting Standards.
- Revenue increased by 8.1% compared to the previous year
- Operating Margin was -3.0%
- The company produced 511 894 cars
- New models Vesta and XRAY raise opportunity for our business in 2015
The company reported audited revenue of 189,4 Bn RUB, compared to 175,2 Bn RUB as reported in 2013, an 8.1% increase from last year’s results.
The reported net profit of AVTOVAZ was negative 25,4 Bn RUB, however the operating profit was negative 5,7 Bn RUB, and the operating margin was negative 3.0%.
The size of the company’s net loss is mainly due to non-operational factors including revaluation of foreign currency loans, provisions for impairment of financial investments and the net effect from the cancelled VMZ transaction of 2013.
„The financial results are mainly affected by non-operational factors. More importantly the operating loss reflects the tough economic conditions Russia is facing. I’m glad that on the other hand we have improved in key operating indicators. In one year we make twice as many cars per assembly worker, we have solved a lot of critical issues and have significantly improved on all quality metrics“, said Bo Andersson, the company’s president.
“AVTOVAZ is undisputedly a key player in the Russian automotive industry. In spite of the difficult economic situation, AVTOVAZ showed a growing revenue in 2014 and is devoted to increasing its Russian market share to 20% and reach a 6% operating margin and positive free cash flow. The key activity for 2015 will be the launch of the new models, highly anticipated by the market, which will help the company to increase volumes of sales”, – said the CEO of the state owned corporation Rostec, Sergey Chemezov.
“AVTOVAZ’s successful cost reduction program decreased the 2014 year operational loss by 7.2 Bn RUB. Our rescue plan is showing effect. We cannot predict how the market will behave, but with an increased customer focus, a better operating assembly line and LADA Vesta and XRAY in the pipeline, the company is aiming to achieve an operating profit in 2015”, Mr. Andersson added.
The AVTOVAZ’s president reaffirmed that today’s announced results make no change to the ambitious plan.
