16th Apr 2019 16:36
LONDON (Alliance News) - Russia-focused real estate developer AFI Development PLC on Tuesday said its profit increased considerably in 2018 due to a rise in residential property sales and a new accounting standard.
The company posted an annual pretax profit of USD42.1 million, rising 44% from USD29.3 million in 2017 as revenue grew 65% to USD296.0 million from USD179.1 million.
Within revenue, residential property sales contributed USD169.6 million, more than one and a half times their USD61.8 million contribution the year before.
This was largely the result of revenue recognition from the delivery of apartments in AFI Residence Paveletskaya in the second quarter of 2018, as well as the implementation of the new IFRS 15 accounting standard.
Rental and hotel operating income rose 7.3% year-on-year to USD125.5 million from USD117.0 million, while the contribution from AFIMALL City revenue rose 5.0% to USD86.8 million from USD82.7 million.
AFi Development Chair Eli Avrahampour said: "As we enter the new financial year, we are mindful of the ongoing uncertainty in Russia, in terms of the evolving legal, business and economic environment, which is expected to place downward pressure on the profitability of the company's yielding properties and residential projects.
"In particular, high rouble volatility, recent tax increases and inflation will increase construction costs, while the implementation of the new escrow schemes and increased lending rates pose further challenges for the property development market. We also face rising competition stemming from the launch of the state-funded housing program."
"That said, we remain cautiously optimistic and believe AFI Development will meet the challenges in both the residential and commercial segments, supported by our market experience and competitive projects," he added.
Shares in AFI Development ended up 4.7% at USD0.18 on Tuesday.
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