AFI Development, a leading real estate company focused on developing property in Russia, today announces its financial results for the six months ended 30 June 2018.

H1 2018 financial highlights

  • Revenue for H1 2018 increased by 34% year-on-year to US$142.0 million, including proceeds from the sale of trading properties:
    • Rental and hotel operating income increased by 12% year-on-year to US$62.7 million
    • AFIMALL City contribution grew by 9% year-on-year to US$43.6 million (H1 2017: US$39.8 million)
    • Sale of residential properties made a strong contribution of US$78.7 million to total revenue (US$49.8 million in H1 2017), a 58% increase year-on-year, mostly due to revenue recognition from delivery of apartments in AFI Residence Paveletskaya in Q2 2018 and the implementation of IFRS 15[1]
  • Gross profit increased by 88% year-on-year to US$55.8 million (H1 2017: US$29.7 million)
  • Net profit for H1 2018 amounted to US$76.7 million (including US$42.6 million valuation gain and US$16.6 million forex gain), compared to US$7.9 million in H1 2017
  • Total gross value of portfolio of properties stood at US$1.34 billion (versus US$1.42 billion as of end-2017)
  • Cash, cash equivalents and marketable securities as of 30 June 2018 amounted to US$108.0 million (versus US$106.0 million at end- 2017)

H1 2018 operational highlights

  • Delivery of apartments sold to customers in Phase 1 of AFI Residence Paveletskaya close to completion; marketing progressing well with 457 pre-sale contracts (73% of  total) signed as of 20 August 2018 
  • At Odinburg, construction works and pre-sales continue at Building 3 (phase I) and Building 6 (phase II)
    • As of 20 August 2018, the number of signed sale contracts stood at 677 (96% of total) in Building 2, 281 (31% of total) in Building 3 and 161 (72% of total) in Building 6
  • At Bolshaya Pochtovaya, construction and pre-sale progressing to plan
    • As of 20 August 2018, 156 apartments (84% of Phase I) pre-sold
  • The construction and pre-sale of properties at Botanic Garden remain on track
    • As of 20 August 2018, 213 apartments (27% of Phase I) pre-sold
  • AFIMALL City continues to record solid NOI growth, up 15% year-on-year to US$32.8 million in H1 2018, from US$28.5 million in H1 2017

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

“Although we have reported good results for H1 2018, we are concerned with ongoing weakening of the rouble against the dollar, which started in the second quarter 2018 and accelerated in the third. If weakening of the rouble continues, it may negatively affect the value of our property portfolio and the revenue from residential sales, which in turn may cause a negative effect on our results for the current financial year.”

 

[1] AFI Development has adopted IFRS 15 Revenue from Contracts with Customers from 1 January 2018. The “sale of residential properties” figure includes the revenue from sales of residential properties transferred over time calculated under IFRS 15.

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