Strong revenue growth driven by residential sales
AFI Development, a leading real estate company focused on developing property in Russia, has today announced its preliminary audited financial results for the year ended 31 December 2016.
- Revenue for the year, including proceeds from the sale of trading properties, reached US$138.3 million (48.2% increase year-on-year):
- Sale of trading properties (residential real estate) contributed US$54.5 million
- Rental and hotel operating income declined 10.0% year-on-year to US$83.6 million, mainly due to the rouble depreciation
- AFIMALL City contribution stood at US$66.2 million (2015: US$71.3 million), down 7.1% year-on-year
- Gross profit increased by 17.4% year-on-year to US$49.4 million (2015: US$42.1 million), reflecting mainly the strong contribution from residential sales and further focus on efficiency
- Largely due to valuation losses in H1 2016, net loss for 2016 amounted to US$47.9 million, against a loss of US$466.7 million in 2015
- Total gross value of portfolio of properties increased marginally to US$1.44 billion, against US$1.43 billion as of the end of 2015
- Cash, cash equivalents and marketable securities as of 31 December 2016 stood at US$16.7 million
- At Odinburg, all of the pre-sold apartments in Building 1 have now been delivered to customers. The number of sale contracts signed amounted to 715 (99% of total) in Building 1 and 480 (67% of total) in Building 2 as of 5 April 2017
- At the AFI Residence Paveletskaya residential development, the main construction phase and pre-sales of residential units continue to plan; 172 units (“flats” and “apartments”) have been pre-sold to date
- AFIMALL City has increased its occupancy to 84% and welcomed several new retailers to the Mall during the fourth quarter:
- NOI declined to US$50.1 million in 2016, from US$53.3 million in 2015, mainly due to slightly decreased average rent in dollar terms across the centre
- In March 2017, the main construction phase started at AFI Residence Pochtovaya and Botanic Garden residential projects in Moscow.
Commenting on today’s announcement, Lev Leviev, Executive Chairman of AFI Development, said:
“Revenue growth of 48.2% for the year, supported by residential sales, stemmed from our continued focus on development and marketing of our core residential projects. Although our macroeconomic environment remains challenging, we are encouraged by the more positive trends in Russia’s economic indicators in 2016. We expect continued gradual recovery to positively impact Russian real estate markets. Beyond the short-term, we believe that the Moscow real estate market continues to offer significant growth potential due to its size, its position as the largest financial centre in Russia and as one of the largest capital cities in Europe”.
 At AFI Residence Paveletskaya there are two types of residential units: fully residentially zoned units referred to as “flats” and commercially zoned units that, according to common market practice in Russia, are sold and referred to as “apartments” and can be used for permanent residence.