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

9M 2018 financial highlights[1]

  • Revenue for 9M 2018 increased by 45% year-on-year to US$207.1 million, including proceeds from the sale of trading properties:
    • Rental and hotel operating income increased by 10% year-on-year to US$93.9 million
    • Contribution from AFIMALL City grew by 8% year-on-year to US$64.7 million (9M 2017: US$59.8 million)
    • Sale of residential properties contributed US$112.4 million to total revenue, a 97% increase year-on-year (9M 2017: US$57.0 million). , mostly due to revenue recognition from delivery of apartments in AFI Residence Paveletskaya in Q2 2018 and the implementation of IFRS 15[2]
  • Gross profit increased by 63% year-on-year to US$72.1 million (9M 2017: US$44.2 million)
  • Net profit for 9M 2018 amounted to US$96.6 million (including a US$62.3 million valuation gain and a US$11.8 million forex gain), compared to US$0.6 million in 9M 2017
  • Total gross value of portfolio of properties stood at US$1.35 billion, broadly unchanged since the end of H1 2018
  • Cash, cash equivalents and marketable securities as of 30 September 2018 amounted to US$114.5 million

9M 2018 operational highlights

  • At Odinburg, construction works and pre-sales continued at Building 3 (phase I) and Building 6 (phase II)
    • As of 7 November 2018, the number of signed sale contracts stood at 685 (96% of total) in Building 2, 420 (46% of total) in Building 3 and 186 (83% of total) in Building 6
  • At AFI Residence Paveletskaya, following the recent completion and delivery of the Phase I apartments to customers, delivery of the Phase II apartments is scheduled for Q1 2019. 503 sale and pre-sale contracts (amounting to 79% of the total number of residential units under sales) have been signed as of 7 November 2018
  • At Bolshaya Pochtovaya, construction and pre-sales are on track with delivery of Phase I apartments planned for Q1 2019
    • As of 7 November 2018, 191 apartments (47% of Phase I and Phase II combined) pre-sold
  • The construction and pre-sale of properties at Botanic Garden remain on track:
    • As of 7 November 2018, 224 apartments (28% of Phase I) pre-sold
  • AFIMALL City continues to record solid NOI growth, up 13% year-on-year to US$50.3 million in 9M 2018, from US$44.4 million in 9M 2017

Commenting on today’s announcement, David Tahan, Chairman of AFI Development, said:

“We are pleased to report that AFI Development has continued to deliver growth in revenue and profits, driven by the performance of our four ongoing residential projects - Odinburg, AFI Residence Paveletskaya, Bolshaya Pochtovaya and Botanic Garden. As we look ahead to the full year, we remain alert the issues posed by a weaker Russian rouble which could impact the value of our property portfolio and the threat of additional US sanctions. However, we believe that with our high-calibre projects, we are well placed to maintain the positive momentum in our performance into the final quarter.”

 

[1] The financial results for 9M 2018 reported in this publication are based on the unaudited summary of financial results prepared by the Company. The results were not reviewed by the auditors.

[2] 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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