24 November 2015


Continued focus on efficiency results in return to profitability in Q3 2015

AFI Development, a leading real estate company focused on developing property in Russia, has today announced its financial results for the nine months ended 30 September 2015.

9M 2015 financial highlights
  • Revenue for 9M 2015, including proceeds from the sale of trading properties, reached US$72.2 million:

-        Rental and hotel operating income declined 35% year-on-year to US$71.4 million, reflecting the difficult macroeconomic environment  

-        AFIMALL City contribution stood at US$54.7 million (9M 2014: US$82.7 million), down 34% year-on-year

  • Gross profit declined by only 13% year-on-year to US$34.8 million (9M 2014: US$39.8 million), reflecting our focus on profitability and rigorous cost control
  • Net loss for 9M 2015 was US$ 20.7 million, against a profit of US$27.9 million in 9M 2014, largely due to valuation losses in Q2 2015

-        Q3 2015 was profitable, with net profit of US$12.5 million for the quarter

  • Total gross value of portfolio of properties decreased marginally to US$1.97 billion at the end of Q3 2015, compared to US$1.98 billion at the end of Q2 2015
  • Cash, cash equivalents and marketable securities as of 30 September 2015 were at US$62.5 million
9M 2015 operational highlights
  • AFIMALL City recorded revenue of US$54.7 million for 9M 2015:

-        NOI was US$41.0 million for the nine months, compared to US$64.2 million in 9M 2014

-        Average monthly footfall in September 2015 was 17% higher than that in September 2014

  • Over 95% of apartments at Odinburg Building 1 have been pre-sold (780 sale contracts signed as of 23 November 2015 in Buildings 1 and 2)
  • The main construction stage of the Paveletskaya II project is ready to be started in December 2015, pre-sales of apartments are also planned to start in December

Commenting on today’s announcement, Lev Leviev, Executive Chairman of AFI Development, said:

“The real estate market across Russia remains under pressure from continued challenging macroeconomic conditions and lack of visibility with respect to future economic recovery. In such an environment, we maintain our cautious approach focused on improving our profitability, enhancing operational efficiency of existing projects and preparing selected new projects for development. We are pleased to report a return to profitability in the third quarter of 2015 and hope to build on this positive development going forward.” 

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