The resume of business plan of the investment project
«Updating of a fleet of vehicles of
JSC «Bobruysktrans»
for realization of the international freight traffic»
1 THE RESUME OF THE PROJECT
The purpose of the project
The basic strategic direction of activity of the enterprise on medium term prospect there is a further development of freight traffic, first of all international, and also increases percentage of incomes of other activity.
In the given business plan economic efficiency of realization of the investment project directed on updating of a fleet of vehicles JSC «Bobruysktrans» by acquisition of 2 «Volvo» model FН13 with trailer is proved.
The involving of the investor by sale of 48.43 % of shares belonging to the Republic of Belarus on competition is planned for realization of the present project.
Competition conditions provide granting by the investor of a loan under 1 % of annual for sum 365 thousand USD for capital expenses with the VAT within a year from the date of the conclusion of the contract of purchase of shares.
In the present business plan the economic efficiency for the future proprietors of JSC «Bobruysktrans» of realizations of the investment project of updating and expansion of a fleet of vehicles is proved.
Technical features
For realization of its industrial activity JSC «Bobruysktrans» has following resources:
- Buildings and constructions;
- Motor transportation techniques;
- Industrial-process equipment;
- Qualified personnel;
- Engineering infrastructure.
Updating (increase) in park of vehicles provides:
- Increase in volume of traffics on territory of the Republic of Belarus and abroad;
- Reduction of forced outages of park of vehicles in repair and servicing;
- Reduction of expenses on servicing in structure of the cost price of services;
-Replacement of out-of-date techniques by the new.
The market analysis
Now a perspective and developing kind of transport services is the sphere of freight traffic. According to National statistical committee of the Republic of Belarus, the turnover of goods on all types of transport in the country last years is characterized by positive dynamics. Minsk region has leading positions in term of turnover of goods by all types of transport among all regions and takes 28 % of the general turnover of goods of the Republic of Belarus.
In structure of export of services, transport services occupy about 70 %. It testifies to active development of the given sphere in state territory in comparison with other spheres (for example, computer (5 %), building (3 %), insurance (0.1 %) and other services).
In 2010 export of transport services was 3 006.9 million USD, that above indicators of 2009 on 31.4 percentage points and indicators of 2008 - on 0.5 percentage points.
In internal market of the Republic of Belarus the market of freight traffic last years, despite the visible tendency of positive growth, is in unstable condition. The quantity of the enterprises and the organizations creating own motor-vehicle pools of lorries for realization of transportation of production annually increases.
The market of a cargo transportation of the Mogilev region has one of the lowest indicators of development among other regions of the Republic of Belarus. However indicators of a turnover of goods and quantity of the transported cargoes annually increase, that is good prospect of development of cargo transportation in the given region.
The main kind of activity of JSC «Bobruysktrans» is cargo transportation and transportation of passengers. In 2010 incomes of the organization of cargo automobile transportation was 8,770 million Belarusian rubles (with taxes), that in total gain was 92.7 %, that above indicator of 2009 on 0.5 percentage points. Incomes of transportation of passengers by buses in 2010 were 1.1 %. In comparison with 2009 reduction of the given indicator was 1.1 percentage points. Incomes of other kinds of activity of the organisation in 2010 were 6.1 % of total amount of incomes. In comparison with 2009 the indicator has increased on 0.7 percentage points.
One of priority directions in organization activity is the increase in transportation of cargoes in the international direction. For realization of the chosen strategy the organization plans to purchase 2 new «Volvo» which will carry out only the international cargo transportation.
The analysis of financial and economic activity
Following the results of work throughout 2008-2010, 1 quarter 2011 JSC «Bobruysktrans» received profit on realization.
In the analyzed period growth of export services is observed. So, following the results of work for 2010 currency receipts from export was 606.9 thousand USD that exceeds a similar indicator of previous year on 107.7 thousand USD.
The enterprise property is generated mainly for the account fixed assets. In structure of passives on 2011/04/01 the greatest share occupies the extra capital (74.3 %).
The structure of use of the basic means of the enterprise throughout 2008-2010 considerably does not vary. The greatest share in their structure is occupied with vehicles (65.8-66.3 %) that is caused by specificity of activity of the enterprise. The greatest part of a rolling stock has a considerable deprecation in this connection JSC «Bobruysktrans» updating of park of vehicles is required.
The basic data under the project and stages of realization of the project
Table 1.1 – The basic data under the project
Name of indicator / Value1. Calculation period / 7 years (2011-2017)
2. Step of calculation / year
3. The discounting rate / 20 %
4. Started date of realization of the project / July 2012 год
5. Unit of account accepted in the project / million Belarusian rubles
6. Rate of national monetary unit (Br), established be National Bank of the Republic of Belarus for calculation date 2011/07/18 / 1 USD = 5 000 Belarusian rubles
1 EUR = 7 056 Belarusian rubles
7. Calculations are executed as of / 2011/07/18
The business plan is developed for the purpose of a substantiation of economic efficiency and expediency of acquisition of two cargo vehicles. The calculation horizon includes the period from the moment of an initial investment of investments, and also term of return of long-term loan under the project plus one year.
For definition of efficiency of the capital investments directed on realization of the project, calculations are executed in two variants:
Variant 1 - at project realization (the appendix 1.1),
Variant 2 - without project realization (the appendix 1.2).
Stages of realization of the project:
- Acquisition of cargo motor transport - June, 2012.
- Input of cargo motor transport in to operation - July, 2012.
The general investment expenses and financing sources under the project
The general investment expenses under the project are 1,689.9 million Belarusian rubles including:
– Capital expenses – 1,375.9 million Belarusian rubles;
– The sum of the VAT paid at realization of capital expenses – 275.2 million Belarusian rubles;
– Gain of a net working capital – 38.8 million Belarusian rubles.
The total requirement for investments under the project is sum of the general investment expenses with the VAT and financial costs for the project, the investments connected with financing.
Financial costs represent payment of percent for loan of the investor. Financial costs during project realization will be 37.8 million Belarusian rubles.
Thus, the total requirement for investments taking into account financial costs for the project is 1,727.7 million Belarusian rubles.
Financing of investment expenses of the present project is planned at the expense of the involved funds of the investor and own means of the enterprise.
1) It is planned, that the long-term loan of the investor will be given with the following conditions:
- The loan sum – 1,651.1 million Belarusian rubles (330.2 thousand USD);
- Granting term – 54 months (4.5 years);
- Date of reception of the first tranche – June 2012;
- The beginning of repayment of the basic debt – July 2012;
- The basic debt is repaid monthly, equal parts;
- The annual interest rate – 1 %;
- Percent are repaid monthly since July 2012;
- Repayment date closed – December 2016.
At the expense of a long-term loan of the investor financing of acquisition of cargo motor transport, and also VAT payment under the project will be carried out.
2) At the expense of own means of JSC « Bobruysktrans » will be financed a gain of a net working capital.
Financial and economic estimation of the project
The predicted general cash-flow testifies to financial realizability of the investment project as a result of industrial, investment and financial activity of the enterprise which in one of the periods does not accept negative values.
The cumulative cash-flow testifies to creation of a reserve for the further development of the enterprise. Surpluses of money resources from enterprise activity will go on updating and maintenance in working order an enterprise fixed capital (major repairs, replacement of the equipment).
The analysis of efficiency of the investment project
The basic indicators of efficiency of the investment project are resulted in table 1.2.
Таблица 1.2 - Основные показатели эффективности проекта
Name of indicators / ValueNPV, million Belarusian rubles / 104.5
Pay-back time of investments, years / 3.2
Dynamic pay-back time of investments, years / 4.8
Internal rate of return (IRR), % / 24.7
Profitability index (PI) / 1.1
Summary indicators of realization of the project are resulted in table 1.3
Conclusions
The analysis of indicators of efficiency of investments of the present business plan has shown, that at predicted capital investments, volumes of rendered services, tariffs and expenses from operational activity the project is financially realized and profitable.
Successful realization of the present investment project will allow JSC «Bobruysktrans»:
- at the expense of acquisition of 2 units of motor transportation techniques to raise the general load-carrying capacity of park;
- to increase a share of the international transportation in total amount of the freight traffic which is carried out by the enterprise that will provide additional inflow of a currency gain;
- to strengthen positions on foreign markets;
- at the expense of deductions of taxes and tax collections, it agree tax laws, taking into account the received incomes of the executed works to fill up republican and local budgets;
- to create at the enterprise of 2 new workplaces.
Table 1.3 - Summary indicators of realization of the projectIndicator / unit of measure / Total / 2011 / 2012 / 2013 / 2014 / 2015 / 2016 / 2017
Investment expenses under the project and financing sources
Cost of the investment project / million Belarusian rubles / 1689.9 / 0.0 / 1670.5 / 19.4 / 0.0 / 0.0 / 0.0 / 0.0
Total requirement for investments / million Belarusian rubles / 1727.7 / 0.0 / 1678.4 / 32.4 / 9.3 / 5.7 / 2.0 / 0.0
Sources of financing of the project: / million Belarusian rubles / 1689.9 / 0.0 / 1670.5 / 19.4 / 0.0 / 0.0 / 0.0 / 0.0
Own funds / million Belarusian rubles / 38.8 / 0.0 / 19.4 / 19.4 / 0.0 / 0.0 / 0.0 / 0.0
Involved funds / million Belarusian rubles / 1651.1 / 0.0 / 1651.1 / 0.0 / 0.0 / 0.0 / 0.0 / 0.0
The long-term loan under 1 % of the annual / million Belarusian rubles / 1651.1 / 0.0 / 1651.1 / 0.0 / 0.0 / 0.0 / 0.0 / 0.0
Share of own capital in volume of investments / % / 2.3 / 0.0 / 1.2 / 100.0 / 0.0 / 100.0 / 0.0 / 100.0
Indicators of efficiency of the project
Dynamic pay-back time of investments / years / 4.8
NPV / million Belarusian rubles / 104.5
Internal rate of return (IRR) / % / 24.7%
Profitability index (PI) / 1.1
Break-even level / % / 97.3 / 93.8 / 91.0 / 90.7 / 90.5 / 90.3 / 89.8
Factor of debts covering / 0.3 / 0.4 / 0.4 / 1.9 / 2.4 / 2.4 / 77.4
Gain from performance of works, rendering of services / million Belarusian rubles / 98166.8 / 12724.5 / 13898.4 / 14308.8 / 14308.8 / 14308.8 / 14308.8 / 14308.8
Including a gain at the expense of project realization / million Belarusian rubles / 4514.4 / 0.0 / 410.4 / 820.8 / 820.8 / 820.8 / 820.8 / 820.8
Gain from performance of works, rendering of services (without the VAT) / million Belarusian rubles / 85646.1 / 11023.3 / 12095.1 / 12505.5 / 12505.5 / 12505.5 / 12505.5 / 12505.5
Including at the expense of project realization / million Belarusian rubles / 4514.4 / 0.0 / 410.4 / 820.8 / 820.8 / 820.8 / 820.8 / 820.8
Average number of the working / persons / 169.0 / 164.0 / 170.0 / 170.0 / 170.0 / 170.0 / 170.0 / 170.0
Including at the expense of project realization / persons / 2.0 / 0.0 / 2.0 / 2.0 / 2.0 / 2.0 / 2.0 / 2.0
Quantity of new created and (or) modernized workplaces as a result of project realization / places / 2.0 / 0.0 / 2.0 / 0.0 / 0.0 / 0.0 / 0.0 / 0.0
Gain from performance of works, rendering of services (without the VAT) on one worker / million Belarusian rubles / 67.2 / 71.1 / 73.6 / 73.6 / 73.6 / 73.6 / 73.6
Share of export deliveries / % / 22.8 / 25.5 / 27.9 / 27.9 / 27.9 / 27.9 / 27.9
Factor of current liquidity / 0.3 / 0.3 / 0.3 / 0.3 / 0.3 / 0.3 / 0.4
Security factor own circulating assets / -4.1 / -3.7 / -3.2 / -2.8 / -2.4 / -2.0 / -1.4
Profitability of sales, % / % / 1.2 / 2.4 / 3.5 / 3.6 / 3.7 / 3.8 / 4.0
Profitability of services, % / % / 1.2 / 2.4 / 3.6 / 3.7 / 3.8 / 3.9 / 4.1