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«TransContainer». Races with inflation

[31.07.2008 14:13 Msk] IPO-Congress
Alexandra Molchanova, analyst

The increase of inflation not only reduces consuming ability, but also increases the necessary rate of return for the enterprises. Recently, profitability of the capital in 10 % was considered sufficient for the beginning of a business and the reference point was the bank rate.

June inflation in the territory of Russia has reached 0.8 %, that is on 0.2 % more than in the same month of the last year. According to the forecasts of experts this year inflation can reach up to 10.5 %

The increase of inflation not only reduces consuming ability, but also increases the necessary rate of return for the enterprises. Recently, profitability of the capital in 10 % was considered sufficient for the beginning of a business and the reference point was the bank rate. Now it is necessary to take in consideration also the rate of inflation, which specifies expediency and benefit of an investment. Today the best interest rate under the annual deposit offers Baltinvestbank - 13 % annual. That means, what the invested money not only keep its value, but even increase for 2.5 % (the relative forecast)

The open joint-stock company, «TransContainer» can be proud of the growth of its actives and net profit, but only in this year it has a chance to overtake the inflation.

For I quarter of 2008 profitability of own « TransContainer's » capital has made 3.4%, but the inflation: 4.7%. In 2007 « TransContainer » has reached profitability in 9.1 %, that is anyway less than inflation, that has risen up to 11.9 %.

Thanks to successful development of the « TransContainer » and to the forecast of downturn of inflation in this year, « TransContainer » has got a chance to overtake the inflation. If «TransContainer » keeps the same tendency of the development, the profitability of its capital can rise up to 13.6 % in this year, which is on 3.1 % above the inflation and on 0.6 % above the deposit in Baltinvestbank. The pure (not sheared) profit can increase in one and a half time, that is the subject of interest for shareholders.

Coefficients of current and fast liquidity of the enterprise have increased from 1.58 till 1.89 and from 1.31 till 1.69. It can be explained by the increase of short-term debts, and as it is known, in November 2008 « TransContainer » is going to lead the second stage of shares emission as initial public offering for a total sum of minimum 8,26 billion rubl. ($349,1 million) that is 20 % of shares. It is planned as well the third stage of emission as the additional emission of shares, but the cancelling of these emissions is possible because of the adverse situation in the global financial market.

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