(Kazakhstan) Kazakhstan Kagazy PLC (the “Company” or “Kagazy”) (LSE:KAG), owner of Central Asia’s largest producer of paper, corrugated board and packaging products and one of the leading industrial real estate development companies in the country, has announced its summary preliminary financial results for the twelve months ended December 31, 2007.
Summary Financial Results
Kagazy generated a 42% year on year revenue growth to US$ 78.7 (55.6) million for the full year 2007, following the strong growth in the paper business division. Total company assets increased by 89.8% year on year to US$ 631.1 million at the end of the year, compared to US$ 332.7 million at the end of 2006.
Kagazy’s EBITDA more than doubled year on year to US$ 18.0 million in 2007 from US$ 8.6 million for the corresponding period in 2006. The Company’s EBITDA margin expanded from 15.5% in 2006 to 22.9% in 2007.
Operating profit more than doubled year on year to US$ 15.0 million in 2007 from US$ 6.9 million in 2006 with an operating profit margin expanding to 19.1% from 15.5% in 2006.
Kagazy therefore reported net profit of US$ 14.0 million in 2007, compared to net income of US$ 2.3 million for the same period in 2006.
Net debt amounted to US$ 41.1 million at the end of 2007, compared to US$ 173.6 million in the previous period.
Property, plant and equipment and investment property amounted to US$ 355.8 million at the end of 2007, compared to US$ 179 million in 2006.
Operating Review
The paper business accounted for the majority of Kazakhstan Kagazy’s revenues and performed in line with expectations. The segment reported substantially higher revenues year on year in 2007. Kazakhstan Kagazy paper business generated a 36.7% year on year increase in revenues to US$ 75.9 million for the full year 2007, reflecting growth in the paper business. Following the acquisition of Kazupack in August 2007, Kagazy has completed the integration of the company’s production facilities into its operations during the year. During 2007, Kazupack’s own corrugating machine has been decommissioned and the plant has been refitted to convert corrugating sheets to boxes.
The segment generated EBITDA of US$ 16.9 million with an EBITDA margin of 22.3%, compared to EBITDA of US$ 8.6 million in 2006.
Gross profit increased to US$ 26.1 million in 2007 compared to US$ 16.1 million in 2006 with a Gross profit margin expanding to 34.4% from 27% in 2006.
Kazakhstan Kagazy owns one of the largest commercial real estate developers in Kazakhstan, PEAK. Since the successful completion of the first stage of the logistics and warehouse facility in July 2007, 100% of the space is now occupied, of which 32% is used by Kagazy’s companies. The property business has contributed US$ 2.6 million of revenue and US$ 1.5 million of EBITDA to the Group’s results for the full year 2007.
The Company acquired approximately 147 hectares of land at the Northern plot in Boraldai, Almaty, of which 140 hectares were acquired prior to the IPO and 7 hectares were acquired after the transaction. The total size of Kagazy’s land bank amounted to 545 hectares as at December 31, 2007.
Comment from the CEO
Yuriy Bogday, CEO of Kazakhstan Kagazy PLC, commented: “Our full year 2007 results show robust growth in paper revenues. We plan to capitalize on our leading position in paper and packaging sectors in Central Asia and continue driving volume increases and efficiency improvements in our paper business to meet the strong forecasted demand in the market.
Following the end of the reporting period, we have completed the acquisition of Astana Contract, the largest warehouse operator in Kazakhstan. We see continued demand for high quality warehouse space in Kazakhstan. We plan to further develop our industrial real estate operations in Almaty and Astana in 2008.”
For further information, please visit www.kazakhstankagazy.com
Kazakhstan Kagazy PLC runs Central Asia’s largest producer of paper, corrugated board and packaging products. It also operates one of the leading industrial real estate development companies in the country through Prime Estate Activities Kazakhstan LLP (Peak), which owns approximately 711 hectares of prime land, strategically located in a newly created industrial zone of the main cities of Kazakhstan, for construction of commercial warehousing and logistics infrastructure facilities. The Group reported total assets of approximately US$ 631.1 million as at December 31, 2007 and consolidated revenues of approximately US$ 78.7 million for the full year of 2007. Kazakhstan Kagazy’s securities are listed under the symbol “KAG” on the London Stock Exchange.
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Summary Financial Results
Kagazy generated a 42% year on year revenue growth to US$ 78.7 (55.6) million for the full year 2007, following the strong growth in the paper business division. Total company assets increased by 89.8% year on year to US$ 631.1 million at the end of the year, compared to US$ 332.7 million at the end of 2006.
Kagazy’s EBITDA more than doubled year on year to US$ 18.0 million in 2007 from US$ 8.6 million for the corresponding period in 2006. The Company’s EBITDA margin expanded from 15.5% in 2006 to 22.9% in 2007.
Operating profit more than doubled year on year to US$ 15.0 million in 2007 from US$ 6.9 million in 2006 with an operating profit margin expanding to 19.1% from 15.5% in 2006.
Kagazy therefore reported net profit of US$ 14.0 million in 2007, compared to net income of US$ 2.3 million for the same period in 2006.
Net debt amounted to US$ 41.1 million at the end of 2007, compared to US$ 173.6 million in the previous period.
Property, plant and equipment and investment property amounted to US$ 355.8 million at the end of 2007, compared to US$ 179 million in 2006.
Operating Review
The paper business accounted for the majority of Kazakhstan Kagazy’s revenues and performed in line with expectations. The segment reported substantially higher revenues year on year in 2007. Kazakhstan Kagazy paper business generated a 36.7% year on year increase in revenues to US$ 75.9 million for the full year 2007, reflecting growth in the paper business. Following the acquisition of Kazupack in August 2007, Kagazy has completed the integration of the company’s production facilities into its operations during the year. During 2007, Kazupack’s own corrugating machine has been decommissioned and the plant has been refitted to convert corrugating sheets to boxes.
The segment generated EBITDA of US$ 16.9 million with an EBITDA margin of 22.3%, compared to EBITDA of US$ 8.6 million in 2006.
Gross profit increased to US$ 26.1 million in 2007 compared to US$ 16.1 million in 2006 with a Gross profit margin expanding to 34.4% from 27% in 2006.
Kazakhstan Kagazy owns one of the largest commercial real estate developers in Kazakhstan, PEAK. Since the successful completion of the first stage of the logistics and warehouse facility in July 2007, 100% of the space is now occupied, of which 32% is used by Kagazy’s companies. The property business has contributed US$ 2.6 million of revenue and US$ 1.5 million of EBITDA to the Group’s results for the full year 2007.
The Company acquired approximately 147 hectares of land at the Northern plot in Boraldai, Almaty, of which 140 hectares were acquired prior to the IPO and 7 hectares were acquired after the transaction. The total size of Kagazy’s land bank amounted to 545 hectares as at December 31, 2007.
Comment from the CEO
Yuriy Bogday, CEO of Kazakhstan Kagazy PLC, commented: “Our full year 2007 results show robust growth in paper revenues. We plan to capitalize on our leading position in paper and packaging sectors in Central Asia and continue driving volume increases and efficiency improvements in our paper business to meet the strong forecasted demand in the market.
Following the end of the reporting period, we have completed the acquisition of Astana Contract, the largest warehouse operator in Kazakhstan. We see continued demand for high quality warehouse space in Kazakhstan. We plan to further develop our industrial real estate operations in Almaty and Astana in 2008.”
For further information, please visit www.kazakhstankagazy.com
Kazakhstan Kagazy PLC runs Central Asia’s largest producer of paper, corrugated board and packaging products. It also operates one of the leading industrial real estate development companies in the country through Prime Estate Activities Kazakhstan LLP (Peak), which owns approximately 711 hectares of prime land, strategically located in a newly created industrial zone of the main cities of Kazakhstan, for construction of commercial warehousing and logistics infrastructure facilities. The Group reported total assets of approximately US$ 631.1 million as at December 31, 2007 and consolidated revenues of approximately US$ 78.7 million for the full year of 2007. Kazakhstan Kagazy’s securities are listed under the symbol “KAG” on the London Stock Exchange.
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