UWC’s Operational Results for 3Q 2018
PJSC “Research and production corporation “United Wagon Company” (UWC, the Holding or the Company) (MOEX: UWGN), the leading builder of railcars in Russia1, reports its 3Q 2018 operational results.
In 3Q 2018, the Company manufactured 5.0 thousand railcars, a 15% increase compared to 3Q 2017. The 9-month production grew by 3% to 14.0 thousand railcars. UWC will build up its production volumes in 4Q keeping with the intended annual production level of 19-20 thousand railcars.
The key driver for the growth was increasing production of specialised rolling stock. The production of hopper cars soared by 88% in 3Q, and by 118% over the 9 months 2018 year-on-year, to 1.3 thousand units and 3.5 thousand units, respectively. The production of other types of specialized railcars (such as flat and box cars, etc.) in 3Q grew by 95% to 744 units, and over the 9 months, by 135% to 1.8 thousand units. The tank car production went up by 141% to 246 units in 3Q and by 27% to 691 units over the 9 months 2018. At the same time, following the market’s gradual switching to specialised rolling stock, gondola production reduced by 14% to 2.8 thousand in 3Q and by 25% to 8.0 thousand over the 9 months.
A total 98% of newly produced railcars were sold under direct contracts to third parties since the start of 2018. The largest supplies were made to GTLK (gondola, hopper cars and flat cars), Rusagrotrans (hopper cars), Uralkali (hopper cars), Logistics1520 (hopper cars), and NPO Azot (tank cars). These companies have acquired a total of 11.2 thousand railcars from the company since the year’s start. The Company also sold its railcars to Kronospan (timber flat cars), Akron (hopper cars), MKB-Leasing for subsequent exports to the far abroad (gondola cars), Fintrans GL (box cars), etc. A total of 25 customers purchased the Company’s railcars in the 9 months 2018.
The Holding’s own leasing entities acquired 40 newly built flat cars equipped with 25- tf bogies to be subsequently leased to UNICON 1520. A total of 298 railcars made by UWC were acquired into the Company’s fleet since the start of the year.
In 3Q UWC sold from its fleet 895 gondola cars mounted on 23.5-tf bogies reducing the share of this type of rolling stock in its fleet to 0%. A total of 1.7 thousand railcars were sold from the fleet over the 9 months 2018.
In line with a leaseback transaction entered into 3Q, the Company sold 5.6 thousand railcars from its own fleet to Gazprombank Leasing. Prior to the year end, another 6.1 thousand railcars will be sold to the company.
As a result of the above changes, UWC’s own fleet and fleet under financial lease totalled 12.0 thousand railcars, a 9% decrease compared with the 2017 end.
In the reporting period, UNICON 1520’s tank-container fleet grew by 21% over the quarter and by 72% compared to 2017 end, reaching 1.1 thousand units, the flat car fleet under management grew by 16% and 115%, respectively, to 557 units, while the tank car fleet remained unchanged compared to the previous quarter’s figure of 78 units, and the number of tank cars doubled compared to the 2017 end. Shipments over 3Q totalled 91.4 thousand tons, being an increase of 42% compared to 2Q 2018. Over the 9 months 2018, the Company shipped an aggregate of 205.2 thousand tons of chemicals.
In 3Q, UWC launched another two Category I service centres to provide all kinds of maintenance and repairs to new generation railcars running on the Far Eastern and East Siberian Railways, raising their total number to 14. The service centre network now includes 72 service centres.
1According to INFOLine
