18th Mar 2016 08:45
LONDON (Alliance News) - AFI Development PLC on Friday said its pretax loss widened in 2015, as "difficult macroeconomic conditions" in Russia hit revenue and caused a sharp downward revaluation across its portfolio.
The real estate company, which develops property in Russia, said it made a USD557.2 million pretax loss in the year ended December 31, compared with a USD323.3 million pretax loss in 2014, as rental income dropped to USD92.9 million from USD141.4 million and pushed down revenue to USD93.7 million from USD144.1 million.
On top of this, AFI Development took a valuation loss of USD434.4 million, up from USD85.9 million the previous year, after the rouble weakened, long-term vacancy rates increased, and market rents in the retail and office segment saw significant reductions.
"Continued deterioration in demand for real estate assets across Russia has served to not only reinforce our focus on maintaining a high level of efficiency at our yielding assets, but has resulted in further downward revision to the value of our portfolio. This has had a major effect on our profitability in 2015 and has overshadowed our operational achievements during the year," Executive Chairman Lev Leviev said.
"Given the high level of uncertainty in our market, we plan to continue with the development of selected residential projects and will adapt our strategy to any changes in our operating environment to ensure sustainable development of our business going forward," Leviev added.
Shares in AFI Development were down 7.8% at USD0.132 on Friday.
By Hannah Boland; [email protected]; @Hannaheboland
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