But high debt to EBITDA multiples do not imply financial susceptibility of the company. It could be compared to operating income to liabilities of the financial institution and yields 12% return on liabilities for OVK vs. only e.g. 2.8% for Sberbank. Even if EBITDA of OVK is accounted for interest expense which is roughly 8% of Net Debt, EBTDA/Net Debt comes to 4.2% and this is still higher number than for Sberbank

Source: ML

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Download Presentation Share price Rub (UWGN RM) Consolidated Numbers Valuations metrics remain large with current debt load Production growth of railcars is strong OVK has been able to post additional 20% rise in railcar production in 2017 increasing the total to 19100 Revenues from railcar sales in 2017 are close to 1bn$ and average unit railcar prices adjust nicely to post devaluation ruble rates EBITDA margin in production rerated last year Revenues from leasing add additional 10% to total However despite smaller share of leasing revenues in total, EBITDA from leasing is roughly half of EBITDA from production And this is due to very healthy EBITDA margin in leasing Capex has been on decline DEBT/EBITDA is down to levels of 8x