Continued delivery of development pipeline despite difficult market conditions AFI Development, a leading real estate company focused on developing property in Russia, has today announced its financial results for the six months ended 30 June 2016.
H1 2016 financial highlights

Revenues for the six months to 30 June 2016, including proceeds from the sale of residential properties, reached US$89.7 million:

-        Revenue recognised from sales of apartments at Odinburg was a major contributor at US$49.7 million
-        Rental and hotel operating income declined 21% year-on-year to US$39.9 million  
-        AFIMALL City contribution stood at US$31.0 million (H1 2015: US$38.5 million), down 19% year-on-year

Gross profit for H1 2016 increased 5% year-on-year to US$27.2 million (H1 2015: US$25.8 million)
Net loss for H1 2016 was US$ 53.3 million, against a net loss of US$33.2 million in H1 2015, largely due to valuation losses
Total gross value of portfolio of properties decreased to US$1.39 billion at the end of Q2 2016, compared to US$1.42 billion at the end of Q1 2016
Cash, cash equivalents and marketable securities as of 30 June 2016 were US$29.5 million

H1 2016 operational highlights

At Odinburg, the delivery of apartments in Building 1 commenced in March 2016, while the construction of Building 2 continues. As of 30 June 2016, 682 apartments in Building 1 have been delivered to customers. The number of sale contracts signed amounted to 695 (96% of total) in Building 1 and 235 (33% of total)  in Building 2 as of 24 August 2016
At the AFI Residence Paveletskaya residential development, the main construction phase and pre-sales of residential units which started in December 2015 continue to plan; 75 “flats” and 15 “apartments” have been pre-sold to date
Despite the continued difficult market conditions in the retail segment, AFIMALL City retained the majority of its tenants and welcomed several new retailers to the Mall during second the quarter

-     NOI declined to US$24.6 million in H1 2016 compared to US$29.1 million in H1 2015
For an update on the current status of negotiations with Bank VTB PJSC please refer to the Subsequent Events section on page 6.
Commenting on today’s announcement, Lev Leviev, Executive Chairman of AFI Development, said:
“As the Chairman and the main shareholder of the Company, my belief in AFI Development’s business potential and its ability to create value for its shareholders remains firm. Despite the current situation in the market and the ongoing negotiations with VTB Bank, AFI Development continues to deliver its development pipeline with construction and sales of its key projects progressing to plan. The first half of the year has brought about some stabilisation in the macroeconomic indicators which have largely been responsible for the current difficult conditions in the real estate market and we look forward to further improvement in our market conditions going forward. In the meantime, I will make every effort to negotiate the best terms possible with VTB Bank to ensure AFI Development retains its position as one of the leading companies in its market for the long-term.”