Half Yearly Report

Raven Russia Limited ("Raven Russia" or the "Company")

2015 Interim Results

Raven Russia today announces its results for the six months ended 30 June 2015.

Highlights

· IFRS loss after tax of $20.6 million (30 June 2014: profit of $45.3 million);

· Underlying earnings after tax down 10% to $34.5 million;

· Revaluation deficit on property portfolio of $51 million;

· Investment portfolio 89% let;

· Cash balance of $247 million today;

· Basic underlying earnings per share down 4% to 5.04 cents;

· Adjusted diluted net asset value per share down 4% to 102 cents;

· Proposed distribution of 1p by way of tender offer buy back of 1 in 47 shares at 47p.

Glyn Hirsch CEO said, "We have adopted a defensive strategy in the light of the difficult economic conditions we are facing. Our emphasis is on cash-flow and long term security."

Enquiries

Raven Russia Limited Tel: + 44 (0) 1481 712955

Anton Bilton

Glyn Hirsch

Novella Communications Tel: +44 (0) 203 151 7008

Tim Robertson

Ben Heath

N+1 Singer Tel: +44 (0) 20 7496 3000

Corporate Finance - James Maxwell

Sales - Alan Geeves / James Waterlow

Barclays Bank Plc

Tom Boardman / Tom Macdonald Tel: +44 (0) 20 7623 2323

This announcement contains forward-looking statements that involve risk and uncertainties. The Group's actual results could differ materially from those estimated or anticipated in the forward-looking statements as a result of many factors. Information contained in this announcement relating to the Company should not be relied upon as a guide to future performance.

About Raven Russia

Raven Russia was founded in 2005 to invest in class A warehouse complexes in Russia and lease to Russian and International tenants. Its Ordinary Shares, Preference Shares and Warrants are listed on the Main Market of the London Stock Exchange with a market capitalisation of approximately £305 million. The Company operates out of offices in Guernsey, Moscow and Cyprus and has to date completed a portfolio of circa 1.5 million square metres of Grade "A" warehouses in Moscow, St Petersburg, Rostov-on-Don and Novosibirsk. For further information visit the Company's website: www.ravenrussia.com

Financial Summary

Letting Summary

The completed logistics portfolio of 1.5 million sqm is 89% let. The table below shows the progress on the renegotiation and extension of near term lease maturities in the six months to 30 June 2015.

Chairman's Message

The six months ended 30 June 2015 have remained challenging operationally although we have generated underlying profits of $34.5 million (30 June 2014: $38.2 million) in the period. Given the continuing sanctions and poor economic conditions caused by the weak oil price and Rouble, this is a satisfactory result.

We continue to negotiate with tenants and have made good progress on the extension of leases maturing in 2015 and 2016. We are currently 89% let and we have a free cash balance of $247 million at today's date.

However, we recognise that the impact of the various macroeconomic events over the last 12 months is not yet fully reflected in our results.

We are acting on the basis that a low oil price and Rouble is the "new normal". We are ensuring that we remain in a strong financial position to deal with the inevitable impact on earnings and cashflow this would have over the coming 18 months.

In light of this and reflecting our continuing cautious stance, we intend to distribute the equivalent of 1p per share (30 June 2014: 2.5p per share) by way of a tender offer buy back of 1 in 47 shares at 47p per share.

The executive and management teams continue to do all that they can to secure the long term income from the portfolio in a turbulent market and, with the oil price and the Rouble continuing to fall this week, it is unlikely that we will see any respite in the coming year.

Richard Jewson

Chairman

26 August 2015

Chief Executive's Review

Results

The first half of the year has been frustrating. Our underlying results have reduced by 10% in the period but this has been a significant achievement given all of the economic factors acting against us.

Our IFRS loss after tax for the six months was $20.6 million (30 June 2014: profit of $45.3 million) following an unrealised loss on revaluation of investment properties of $50.8 million (30 June 2014: surplus of $20.4 million). The value of our completed investment portfolio has fallen, principally as a result of weaker market rents driven by the weak Rouble.

Underlying earnings after tax for the six months to 30 June 2015 were $34.5 million (30 June 2014: $38.2 million) giving basic underlying earnings per share of 5.0 cents (30 June 2014: 5.2 cents). Net operating and related income was $95.5 million (30 June 2014: $97.8 million). Income from investment properties remained stable at $90 million (30 June 2014: $89.1 million) but the contribution from our subsidiaries declined from $8.7 million to $5.5 million.

The completed portfolio comprises 1.5 million square metres ("sqm") of space and is 89% let, generating annualised net operating income of $188 million at 30 June 2015 (30 June 2014: $192 million). The reduction in annualised net operating income reflects the rebasing of maturing leases in the period to the current lower market rental levels.

Our focus continues to be on the renegotiation of near term, maturing leases. The majority of the 140,000sqm of leases maturing in 2015 and 37% of the 323,000sqm maturing in 2016 had been renegotiated by 30 June 2015. This resulted in 84,000sqm of additional vacant space, 15,000sqm of which had been re-let by 30 June 2015.

Most of the remaining maturities in 2016 relate to six tenants and we are in discussion with all of these on renewal terms. Letters of intent have been signed on the extension of a further 28,000sqm of 2016 maturities since 30 June 2015.

As I said at the year end, we will continue to work with tenants who have longer lease maturities and may be in difficulties as a result of the Rouble depreciation but who also recognise it is a reciprocal arrangement. All lease negotiations also have to be undertaken in the context of existing banking covenants.

We are, in limited circumstances, contracting with tenants in Roubles for lease extensions where this is balanced by other contractual terms such as lease length, annual indexation and tenant covenant. At 30 June 2015, 7% of the warehouse portfolio had annualised net operating income denominated in Roubles with Rouble linked annual indexation. The average Rouble rent for these leases is 5,000 Roubles per sqm with a minimum weighted average indexation of 8% per annum. A further 7% is denominated in US Dollars but with Rouble caps and collars.

The weighted average term of the Rouble leases is just over two years, allowing a rebase to US Dollars if the market has stabilised at maturity. The majority of caps run for one year.

The effect of all of these negotiations is not yet properly reflected in our results but will impact as our average rent moves towards current market levels on lease maturities. The drop in oil price and further decline in the Rouble in the last week does not help matters.

We are not currently engaged in any construction, we had 166,000sqm of vacant space at 30 June 2015, 52,000sqm of which is new space completed at Nova Riga in Moscow at the end of last year.

Fully diluted adjusted net asset value per share has decreased from 106 cents at 31 December 2014 to 102 cents. Cash balances at 30 June 2015 were $221 million and are $247 million at today's date (representing 36 cents per share)

Financing 

During the six months to 30 June 2015, the Group has drawn on existing facilities secured on the Nova Riga and Noginsk projects, generating a further $66 million of funds. The weighted average cost of debt remains at 7% (31 December 2014: 7%) and the weighted average term to maturity on debt was 4.3 years at 30 June 2015 (31 December 2014: 4.8 years).

Since 30 June 2015, a facility agreement for a two year extension on borrowings secured on the Istra project has been signed, extending the maturity to April 2018. This accounts for $125 million of the bank loans due for settlement within 12 months at 30 June 2015. Similar discussions are underway on the facility secured on the Pushkino project, maturing in April 2017, which would extend the maturity to April 2019.

The facility secured on the Konstanta office asset in St Petersburg remains on cash sweep as explained in note 9 to the Interim Results.

Foreign exchange 

As the Rouble exchange rate with the US Dollar began and ended the six month period at similar levels, there was no significant movement in foreign exchange in balance sheet terms. In comparison to the first six months of 2014, the significant drop in the average Rouble rate has reduced the US Dollar equivalent income of Roslogistics, the Group's wholly owned subsidiary, with contribution in the period dropping from $7.2 million to $4.1 million due solely to the exchange rate movement.

The increase in Rouble denominated rents has also changed our foreign exchange risk profile. However the link to Russian CPI for indexation purposes gives some protection against further Rouble weakening during the lease term. A strengthening of the Rouble over the lease term would generate commensurate upside.

Cashflow

With no significant construction costs, the release of $25 million of restricted cash on the conclusion of the litigation against CJSC Toros and the additional funds drawn on existing bank facilities, the Group generated $46 million of cash in the period. This was after $32 million of shares bought back and cancelled and $9 million of preference share coupon paid.

Tender offer

We propose to distribute income by way of a tender offer buy back and intend to pay the equivalent of 1p per share by way of an offer of 1 in 47 shares at 47p (30 June 2014: 2.5p by way of 1 in 30 shares at 75p). Shareholders will be permitted to over tender if they so wish. This will result in a maximum cash distribution of $10.9 million (30 June 2014: $30.5 million) at today's exchange rate.

Outlook

We have adopted a defensive strategy in the light of the difficult economic conditions we are facing. Our emphasis is on cash-flow and long term security.

Our business is proving resilient to these difficult conditions, whilst rents remain depressed. We still believe that there exists a structural undersupply of quality logistics property in Russia and the retail sector continues to expand.

Despite the difficult market, we have high occupancy levels, high cash balances and secure financing. We are confident that when market conditions stabilise we will be able to capitalise on our market leading position and re-establish our forward momentum.

Glyn Hirsch

Chief Executive Officer

26 August 2015

Corporate Governance

Principal risks and uncertainties

Internal controls and an effective risk management regime are integral to the Group's continued operation. The assessment of risks faced by the Group is set out in the Risk Report on pages 34 to 39 of the Group's 2014 Annual Report. The principal risks and uncertainties to which the Group is subject have remained consistent with those at the 2014 year end, dominated by the impact of oil prices on the Rouble exchange rate. The recent downward pressure on oil prices with the rapid depreciation of the Rouble since 30 June 2015 increases credit risk for the Group and will apply further pressure to market rental levels.

A summary of the principal risks and uncertainties are as follows:

Russian Political and Economic Risks

Oil Price

The global economy operates in a low oil price environment for the medium term with the related impact on the Rouble exchange rate and infrastructure investment, extending the slow down in the Russian economy.

Ukraine

The situation in Ukraine is not resolved peaceably or escalates resulting in increased isolation of Russia from international markets and increased sanctions which exacerbate the slow down in the Russian economy.

Financial Risks

Foreign Exchange

A continued weakening of the Rouble against the US Dollar leading to pressure on market rents, a reduction in the Group's US Dollar denominated earnings, heightened credit risk and a further reduction in the carrying value of assets.

Bank Financing and Costs

Reduced access to funding and potential increases in funding costs hinders the Group's ability to refinance maturing facilities. Reduced income and asset values driven by a weak Rouble increases the risk of covenant breaches.

Treasury

Sanctions precipitate the introduction of currency controls and restrict the flow of funds into and out of Russia.

Property Investment

Tenant Demand

A slow down in Russian growth and consumer spending will impact demand for new lettings, renewal of existing leases, restrict rental growth and reduce asset values.

Russian Domestic Risk

Legal and Taxation Frameworks

The Russian legal and taxation frameworks are still developing with large volumes of new legislation being open to interpretation and abuse.

Going concern

The financial position of the Group, its cash flows, liquidity and borrowings are described in the Chief Executive's Review and the accompanying financial statements and related notes. During the period the Group had, and continues to hold, substantial cash and short term deposits and is generating underlying profits. As a consequence, the Directors believe the Group is well placed to manage its business risks.

After making enquiries and examining major areas that could give rise to significant financial exposure, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue its operations for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in the preparation of the accompanying interim financial statements.

Directors' Responsibility Statement

The Board confirms to the best of its knowledge:

The condensed financial statements have been prepared in accordance with IAS 34 as adopted by the European Union, and that the half year report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.

The names and functions of the Directors of Raven Russia Limited are disclosed in the 2014 Annual Report of the Group.

This responsibility statement was approved by the Board of Directors on the 26 August 2015 and is signed on its behalf by

Mark Sinclair Colin Smith

Chief Financial Officer Chief Operating Officer

Independent review report to Raven Russia Limited

We have been engaged by the Company to review the condensed set of financial statements in the Interim Results report for the six months ended 30 June 2015 which comprises the Condensed Unaudited Group Income Statement, the Condensed Unaudited Group Statement of Comprehensive Income, the Condensed Unaudited Group Statement of Changes in Equity, the Condensed Unaudited Group Balance Sheet, the Condensed Unaudited Group Cash Flow Statement and the related notes 1 to 17. We have read the other information contained in the Interim Results report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The Interim Results report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Results report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this Interim Results report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Interim Results report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom.

A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Interim Results report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

London

26 August 2015