AFI Development PLC, a leading developer of multi-purpose properties in Moscow, the Russian regions and the CIS, has announced its financial results for the first half ending 30 June 2008.
Financial highlights:
- NAV increased by 8.2% from US$5.9 billion as of 31 December 2007 and increased by 13.1% year-on-year to US$6.3 billion
- NAV per share at US$12.1 up from $11.2 per share as of 31 December 2007 and $10.7 year-on-year
- Market value of portfolio is US$5.9 billion, up 13% from 31 December 2007 and 31% from 30 June 2007
- Profit before tax up 67% to US$110.0 million compared to the first half of 2007
- Net profit nearly doubled from US$50.2 million in the first half of 2007 to US$97.3 million
- Five-fold increase in revenues to US$12.6 million in the first half of 2008 compared to US$2.5 million for the same period last year, driven by a US$10.14 million increase in rental income
Operational highlights:
- Rental and capital values remain strong, continue to outperform expectations and are above the levels assumed in the JLL valuations
- Successful realization of Aquamarine II which was sold for US$207.0 million, implying an exit yield of 6.8%, which is 50% above the last JLL valuation and resulted in a valuation gain on the investment property of US$35.0 million under IFRS
- Key milestone reached on the Kuntsevo project following receipt of further approval from the Moscow Government granting the right to finance and procure town planning documentation for the project; AFI Development was granted an additional land plot resulting in an increase in the overall development area from 1.2 to 1.5 million m²
- Continued positive progress with funding activities, including a loan facility of US$414.0 million from VTB for the Mall of Russia (Moscow City) project; This adds to the US$280 million of financing obtained for the development of the Tverskaya Zastava project in 2007 from Sberbank
- Significant progress with construction of key projects such as the Mall of Russia (Moscow City) and Ozerkovskaya Embankment
- Successful progress on sales of residential units - we have sold 46% of the residential units at Phase II of the Ozerkovskaya Embankment project and 64% of the residential units at Four Winds
- We have achieved average rental rates of US$3,392 per sqm (excluding VAT and OpEx) in pre-lease agreements (covering 35% of the gross leasable area) for the Mall of Russia (Moscow City) (excluding anchor tenants) and average rental rates of US$3,400 per m² (excluding VAT and OpEx) in pre-lease agreements (covering 17% of the gross leasable area) for the Tverskaya Zastava shopping center (excluding anchor tenants)
- Acquisition of four hotel properties in Kislovodsk and Zheleznovodsk for US$70.0 million
- Entry into the Ukrainian market through the acquisition of AFI Ukraine Limited for US$30.3 million
- Acquisition of Phase III of the Pochtovaya project during the first quarter of 2008 for US$42 million
Commenting on today's announcement, Alexander Khaldey, Chief Executive of AFI Development, stated: "Despite the continued challenging conditions in the global financial and real estate sectors, our very strong first half results show the continuing potential of the Russian and CIS markets. The demand for quality properties in Moscow and selected towns still far outstrips supply and the depth of our resources, combined with our development pipeline, means we can expect to realise further gains for our shareholders in the coming years. In addition, our ability to carefully manage liquidity through several sources means that we are well positioned to fund current projects on schedule and seek attractive new acquisition opportunities."
Source: AFI Development
