OREANDA-NEWS. April 12, 2010. Synergy released FY09 results, which are mostly in line both with our forecast and consensus on revenue, though 3% below our expectations on net income, reported the press-centre of OTKRITIE FC.

View: Despite the slight miss, Synergy increased revenue and EBIT (in ruble terms) year-on-year. The decline in the bottom line was due to high interest expenses, which is fully discounted. We are somewhat disappointed by the lack of improvement in margins in 2H09, as improvement of EBIT and EBITDA margins for FY09 was generated in the first half of the year.

Valuation and Action: The stock trades on a 2010 EV/EBITDA of 7.7x, which implies a 31% discount to CEDC. Synergy shares rallied on Wednesday (+10%) on the back of speculation of a strong earnings release. As we see no triggers for the next six months, we advise investors to take profit. Nevertheless, we think it is attractively valued on fundamentals.