OREANDA-NEWS. March 28, 2011. Motor Sich, a major producer of aerospace engines in the CIS region, held its AGM on Mar 24 to channel UAH 19.8mn to dividends from the company’s profit for FY10 that corresponds to DPS of UAH 9.5 and a dividend yield of 1%. At the AGM management has also set the guidance for FY11 sales growth of 23%.

Millennium Capital considers the news as POSITIVE for the company. A penny-ante dividend payout suggests that the management will reinvest the bulk of profits (UAH 1,249mn) back into the business to fund higher working capital and Capex (up to UAH 500mn) requirements implied by the announced upswing in organic growth in FY11. Meanwhile, the FY11 revenue target advanced by the management exceeds both our forecast (UAH 5,375mn) and market consensus and suggests we may see another year of above average growth at MSICH. The reaction of the market should be positive.