12th Mar 2014 11:40
LONDON (Alliance News) - - Mirland Development Corp PLC Wednesday said it swung to a full year profit, after last year's results where hit by a loss on the fair value adjustment of investment properties and properties under construction.
The residential and commercial property developers in Russia posted pretax profit of USD7.3 million for 2013, compared with a USD41.2 million loss a year earlier, as total revenue rose to USD103.8 million from USD42.0 million in 2012.
Total revenue incorporates revenue from management fees, revenue from sales of residential units and rental income from investment properties.
In 2012, the company made a USD31.6 million loss on the fair value adjustment of investment properties and properties under construction. That became a USD45.1 million profit in 2013.
Revenue jumped 147% as revenues from the sale of residential units leapt to USD56.1 million, from USD8.1 million a year earlier. This was driven by the first-time partial recognition of revenues from Mirland's residential project Triumph Park in St Petersburg.
Mirland said there was a strong sales launch in the third quarter of 2013 for the third phase of the scheme, with 303 out of 1,356 homes pre-sold, representing sales of around USD32 million.
Total revenue also was boosted by rental income from investment properties, which rose to USD46.3 million, from USD32.2 million in 2012. Revenue from management fees, however, dipped slightly to USD1.5 million from USD1.6 million.
In addition to Triumph Park, Mirland has a residential development in Moscow. During the period, the company sold a further five houses at its site in Perkhushkovo, taking the total number of units sold to 30 out of 77 houses in the scheme.
Mirland said its retail portfolio has also progressed well, with both of its shopping centres in Russia, Vernissage Mall in Yaroslavl and Triumph Mall in Saratov, now completely occupied with high levels of shopper footfall.
"In light of the success of our retail portfolio, we are looking at potential opportunities to grow our holdings in the sector through the extension of our Vernissage Mall by an additional 30,000 square metres, to include a cinema and new anchor home and clothing stores," the firm said.
Overall, Mirland said its total assets at the period-end was valued 15% higher at USD853.1 million, compared with USD743.7 million a year earlier.
Looking ahead, the company is looking to take advantage of strong demand for office space in Russia's capital and has recently completed the renovation of its fire-damaged MAG building. The renovated space has been leased to a single tenant for five years, starting at USD531 per square metre.
"2013 was a landmark year for MirLand, as the company returned to strong profitability," Chairman Nigel Wright said in a statement. "This was driven by the first recognition of profits from our flagship residential development scheme, Triumph Park in St. Petersburg, where we have achieved excellent sales levels and in the autumn delivered the first finished units from Phase I.
Wright said he expects the next phases of the scheme to generate high levels of income over the coming years.
Despite improvements in the Russian economy, and the company's results, Mirland said "it is appropriate to retain maximum flexibility to invest in the opportunities available to it, and therefore the board has determined that it is inappropriate to declare a dividend for the financial year ended December 31, 2013".
The stock was trading at unchanged at 235.00 pence Wednesday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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