Difficult conditions continue to affect financial results
AFI Development, a leading real estate company focused on developing property in Russia, has today announced its financial results for the three months ended 31 March 2016.
Q1 2016 financial highlights
- Rental income and income from hotel operations declined to US$20.0 million (from US$24.4 in Q1 2015) as a result of the continuously difficult macroeconomic environment
- AFIMALL City contribution at US$16.1 million, compared to US$19.1 million in Q1 2015
- At the same time, gross profit increased to US$15.1 million compared to US$11.2 million in Q1 2015
- Net loss for the quarter amounted to US$31.9 million compared to net profit of US$6.0 in Q1 2015, mainly due to a valuation loss
- Cash, cash equivalents and marketable securities stood at US$32.5 million as of 31 March 2016
Q1 2016 operational highlights
- Following the VTB Bank warning that it would exercise its right under the loan facility agreements to claim early repayment of the loans if certain conditions were not met, the Bank and the Company are considering the possibility of reaching an agreement to release the AFI Development Group from both loans owed to the Bank of current balance of US$611.1 million. The Bank has communicated to the Company that it expects to conclude the negotiations not later than 31 May 2016
- In Odinburg, the delivery of apartments in Building 1 commenced in March 2016, while the construction of Building 2 continues. The number of sale contracts signed amounted to 698 (97% of total) in Building 1 and 158 (22% of total) in Building 2 as of 16 May 2016
- The main construction phase and pre-sale of apartments at the Paveletskaya II residential development commenced in December 2015; 45 flats and 4 “apartments” have been pre-sold to date
- Despite the difficult market conditions, AFIMALL City retained the majority of its tenants and welcomed several new retailers to the Mall during the quarter
- NOI declined to US$12.4 million in Q1 2016 compared to US$13.7 million in Q1 2015
Commenting on today’s announcement, Lev Leviev, Executive Chairman of AFI Development, said:
“Ongoing macroeconomic difficulties continued to affect our results in the first quarter of 2016. At the same time, the Company is committed to continue the development of our existing projects. I believe that the results of our negotiations with the VTB Bank, while removing credit exposure to the VTB Bank and neutralising the risks related to servicing a foreign currency loan, will ensure further stable development of the Company”.
Q1 2016 Results Conference Call:
AFI Development will hold a conference call for analysts and investors to discuss its Q1 2016 financial results on Wednesday, 18 May 2016, following the publication of the Company's financial results.
The details for the conference call are as follows:
Date: Wednesday, 18 May 2016
Time: 15:00 BST (17:00 Moscow)
International: +44 (0)20 3003 2666
US toll-free: 1 866 966 5335
Russia toll-free: 8 800 249 020 44
Please dial in 5/10 minutes prior to the commencement time giving your name, company and stating that you are dialling into the AFI Development conference call quoting the reference AFI.
Prior to the conference call, the Q1 2016 Investor Presentation of AFI Development will be published on the Company website at http://www.afi-development.com/en/investor-relations/reports-presentations on 18 May 2016 by 12am BST (2pm Moscow).
For further information, please contact:
AFI Development, Moscow
+7 495 796 9988
Citigate Dewe Rogerson, London
+44 20 7638 9571