OREANDA-NEWS. February 28 2011. The Ministry of Defense of Russia has released details of the State program on weapons supplies for the Russian Army through 2011-2020 (SPM-2020). According to Vladimir Popkovich, first deputy minister of defense, the Russian Army intends to purchase 600 aircrafts and 1,000 helicopters over the next 10 years spending in total USD  630bn on the SPM-2020. In particular, the Russian air force will buy 100 attack helicopters, including Mi-28N and Ka-52.

Millennium Capital considers the news is POSITIVE for the company as both Mi-28N and Ka-52 models are powered with Motor Sich produced engines TV3-117VMA and VK-2500, respectively. We consider SPM-200 as one of the most important drivers for the Russian helicopter industry in the short and mid-term. Therefore we expect that Russian Helicopters, an affiliate of United Industrial Corporation Oboronprom, will boost production by c.29% yoy up to 260 helicopters in 2011. Taking into account that the engines for Russian helicopters are currently supplied by Motor Sich, we expect a robust growth in both top and bottom line of the company in FY11 propped by the new orders from Russians.