26th Aug 2014 09:24
LONDON (Alliance News) - Raven Russia Ltd Tuesday said pretax profit and revenue both fell in the first half, as the company cautioned about the impact of the Ukraine crisis and the subsequent sanctions placed on Russia, though it said it would hike its payout to shareholders 25% by means of a proposed buyback offer of 1 in 30 shares at 75 pence.
The Russia-focused property investor said pretax profit in the six months to June 30 was down to USD57.9 million, from USD68.2 million a year earlier. The fall came as revenue in the period fell to USD132.3 million against USD134.7 million last year.
The group stressed its underlying performance in the first half had been strong, but this has been threatened by the current crisis in Ukraine and the implications for Russia, notably the sanctions placed on the country by the European Union and the US.
On the back of the underlying performance, the company said it would hike its distribution to shareholders by 25% via a tender offer to buy 1 in 30 shares for 75 pence per share. Shares in the company on Tuesday were down 0.3% to 73.00 pence.
Richard Jewson, the chairman of Raven Russia, said there would be "little merit in speculating" on the potential or future impact of future sanctions against Russia on its business, saying it has not been directly impacted by the sanctions so far.
Commenting on the potential impact of the sanctions, the compay said: "A lengthy period of ruble weakness will weigh on US dollar market rents but development of new space would reduce significantly, acting as a counterbalance. "
The company said its completed portfolio is currently 97% let and said it remains in a good position should a satisfactory resolution emerge from the Ukraine crisis. It currently generates annual net operating income of USD192 million from the portfolio, which would rise to USD197 million when fully let.
The group is also in the process of constructing 107,000 square metres of new space at the Noginsk and Nova Riga sites in Moscow, with completion of these projects expected by the end of the year. It has pre-let agreements and letters of intent on 60,000 square metres, which will produce additional net operating income of USD12.5 million.
By Sam Unsted; [email protected]; @SamUAtAlliance
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