Rába stands by revenue, profit targets

Automotive

Hungarian vehicle and vehicle parts maker Rába can achieve its targeted 10% revenue growth and positive bottom line for the full year - bar risks - because of strong business in Q4, chairman-CEO István Pintér said on Thursday, a day after the company published its Q3 report.

The company expects a strong fourth quarter, he said.

If calamity does not befall the vehicle industry, Rába could remain on an upward path next year even if the market stagnates, thanks to ongoing projects, Pintér said.

Revenue is stable, in spite of the difficult environment on currency markets, rising costs in the quarter and the low activity of the vehicle division, he added.

Pintér attributed the 3.9 percentage point drop in gross margin and the 1.8 percentage point fall in EBITDA margin in Q1-Q3 to lower exchange rates, high feedstock prices, the low output of the vehicle division and project costs, he said. Unconventional, one-off orders make up for a smaller share of revenue than earlier, he added.

Pintér said the global market for heavy vehicles was showing strong growth from which Rába would profit. From 2012, Rába wants to deliver an annual 100,000 axles to the European market, or 25-30% of its output, he added.

Rába expects the farm vehicle segment to remain strong but the passenger car segment to contract next year, Pintér said.

Invoicing with Rába’s biggest clients now takes place in euro, ending the company’s exposure to the dollar.

Asked about the company’s ownership, Pintér declined to comment.

Hungary’s National Asset Management Company (MNV) made a public purchase offer for all outstanding Rába shares on November 7.

Asked about the manufacture of fire engines and buses, Pintér said only that Rába wants to boost sales of non-military vehicles.

National Development Ministry state secretary Janos Fónagy said after the buyout offer was announced that it was Rába’s strategic goal to increase vehicle production capacity. Economy of scale cannot be achieved in the bus manufacturing segment in Hungary, but Rába could excel in the special vehicles segment, such as in the manufacture of fire engines, he added.

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