27th Aug 2019 10:13
(Alliance News) - Russia-focused real estate company AFI Development PLC reported a rise in first-half revenue, but a fall in property value caused a profit drop.
In the six months ended June 30, AFI delivered a 28% rise in revenue to USD182.0 million but pretax profit fell by 32% to USD65.6 million.
The company posted a USD30.4 million decrease in fair value of its properties compared with a USD42.6 million gain in the same period last year. Gross profit, a measure which does not consider valuation gains or losses, rose by 66% to USD92.8 million.
Shopping and entertainment centre AFIMALL City, in central Moscow, increased revenue by 1.4% to USD44.2 million from USD43.6 million. Disposals of residential properties contributed USD116.6 million to interim revenue.
Rental & hotel operating income rose by 0.8% year-on-year to USD63.2 million from USD62.7 million. The gross value of its portfolio fell 7.4% to USD1.24 billion from USD1.34 last year.
AFI said although there were strong residential sales in the interim period, volatile market conditions may make it difficult for the company to meet internal sales targets.
Chair Eli Avrahampour said: "I am pleased to report positive momentum in our financial and operational results for the first half of 2019, owing largely to the recognition of residential presales and the stable performance of the yielding portfolio.
"During the period, we leveraged our improving profitability to reduce our external debt and to repay USD107.2 million to VTB Bank PJSC relating to a number of existing loans. At the same time, we are concerned with pace of sales across our residential portfolio, which remains subject to volatile market conditions, and with general vulnerability of the Russian economy to external and internal challenges."
Shares in AFI were untraded in London on Tuesday morning, last quoted at USD0.20 each.
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