OREANDA-NEWS. March 16, 2011. The Ukrainian military expect to receive just UAH 350mn, or merely half of the amount specified in the 2011 budget for developing of the new military equipment, including AN-70 cargo aircraft, which should be powered with an updated model of the Motor Sich D-27 engine.

Millennium Capital consider the news as NEUTRAL for the company. Although the financing from the Ukrainian budget was cut fivefold the program progresses steadily from the Russian side where all the expenses were financed in full in 2010. Thus, we expect that the Russians will continue supporting the Program in 2011. Besides we remain skeptic on the overall outlook for AN-70 and place more emphasis on AN-124 that, in our view, has higher chances of becoming a significant revenue driver for Motor Sich in the mid to long-term.