30th Aug 2018 13:52
LONDON (Alliance News) - Russia-focused real estate company AFI Development PLC on Thursday reported a rise in interim profit and revenue but warned against the "ongoing weakening" of the rouble against the dollar.
In the six months ended June, AFI multiplied its pretax profit to USD96.5 million from USD17.2 million the year before.
Revenue increased 34% to USD142.0 million from USD106.1 million.
The company said the profit rise was helped by a USD42.6 million valuation gain, plus a USD16.56 million foreign exchange gain compared to USD7.9 million the year before.
Rental and hotel operating income increased by 12% year-on-year to USD62.7 million.
The shopping and entertainment centre AFIMALL City, in central Moscow, increased revenue by 9% to USD43.6 million from USD39.8 million, with a 15% rise in net operating income to USD32.8 million. Occupancy in the shopping centre was 90% at the end of the half.
AFI's disposal of residential properties in the half also made a "strong" contribution to revenue - with a 58% increase to USD78.7 million from USD49.8 million.
The company did not propose an interim dividend, the same as in the previous year.
AFI did warn, however, that the value of its portfolio decreased to USD1.34 billion from USD1.42 billion at the end of the previous half due to "recent threat of new US sanctions".
AFI said it believes the general macroeconomic outlook in Russia "continued to stabilise" in the second quarter and the US threats "overshadowed" an "otherwise improving" economic outlook.
The company remains "cautiously optimistic" regarding the future market environment for both its commercial and residential projects.
AFI also said that Executive Chairman Lev Leviev resigned from his position, effective from this Friday. The company appointed David Tahan as non-executive chairman, effective from Saturday, September 1; he was previously an independent non-executive director of the company.
AFI also appointed the chief executive officer of its Russian operating subsidy, Mark Groysman, as executive director. He will serve as a board member in the interim until a new board member is appointed.
Executive Chairman Lev Leviev said: "Although we have reported good results for H1 2018, we are concerned with ongoing weakening of the rouble against the dollar, which started in the second quarter 2018 and accelerated in the third. If weakening of the rouble continues, it may negatively affect the value of our property portfolio and the revenue from residential sales, which in turn may cause a negative effect on our results for the current financial year."
Shares in AFI Development were down 7.7% Thursday at USD0.19 each.
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