Strong operational results supported by improved commercial income and 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 2017.
- Revenue for the year, including proceeds from the sale of trading properties, reached US$179.1 million (30% increase year-on-year):
- Sales of trading properties (residential real estate) contributed US$61.8 million
- Rental and hotel operating income increased 40% year-on-year to US$117.0 million
- AFIMALL City contribution increased to US$81.8 million (2016: US$66.2 million), a 24% increase year-on-year
- Gross profit increased by 24% year-on-year to US$61.0 million (2016: US$49.4 million)
- Largely as a result of increased financing costs and a higher income tax, the Company incurred a net loss of US$4.7 million in 2017, an improvement on the loss of US$47.9 million recorded in 2016
- Total gross value of portfolio of properties was largely unchanged at US$1.42 billion, a slight decrease from the 2016 figure of US$1.44 billion
- Cash, cash equivalents and marketable securities as of 31 December 2017 stood at US$106.0 million
- All four of the Company’s residential projects, Odinburg, AFI Residence Paveletskaya, Bolshaya Pochtovaya and Botanic Garden, are in the active construction and sales stage.
- Construction and pre-sales at projects launched in 2017, Bolshaya Pochtovaya and Botanic Garden, are progressing to plan. As of 10 April 2018, 48 apartments (26% of Phase I) are pre-sold at Bolshaya Pochtovaya and 78 apartments (10% of Phase I) at Botanic Garden.
- At Odinburg, construction of Building 6 (phase II) started in the second quarter, while the construction of Building 3 (phase I) commenced in the third quarter. As of 10 April 2018, the number of signed sale contracts stood at 676 (96% of total) in Building 2, 144 (64% of total) in Building 6 and 134 (14% of total) in Building 3.
- The planned construction and pre-sale of apartments at AFI Residence Paveletskaya, proceeded according to schedule with 404 residential unit pre-sale contracts (63% of units under pre-sales) signed as of 10 April 2018.
- AFIMALL City continues to record solid NOI growth, reaching US$63.0 million in 2017, up from US$50.1 million in 2016.
Commenting on today’s announcement, Lev Leviev, Executive Chairman of AFI Development, said:
“We are pleased to report growth in revenue and gross profit for 2017, facilitated by strong residential sales and a somewhat improving macroeconomic environment. The strong performance registered in 2017 by our flagship AFIMALL City project and increasing revenue from the residential sales give us some optimism for 2018. However we remain cautious on the macroeconomic recovery in Russia and are conservatively optimistic on the Moscow real estate market going forward into 2018.”