Satisfactory operational results amidst continuing macroeconomic uncertainty

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 2015.

H1 2015 financial highlights

•  Revenues for the six months to 30 June 2015, including proceeds from the sale of trading properties, reached US$51.1 million:
•  Rental and hotel operating income declined 33% year-on-year to US$50.4 million
•  AFIMALL City contribution stood at US$38.5 million (H1 2014: US$56.6 million), down 32% year-on-year
•  Gross profit for H1 2015 declined slightly to US$25.8 million (H1 2014: US$27.5 million)
•  Net loss for H1 2015 was US$ 33.2 million, against a profit of US$3.7 million in H1 2014, largely due to valuation losses in Q2 2015
•  Total gross value of portfolio of properties decreased marginally to US$1.98 billion at the end of Q2 2015, compared to US$1.99 billion at the end of Q1 2015
•  Cash, cash equivalents and marketable securities as of 30 June 2015 were US$78.6 million

H1 2015 operational highlights

• AFIMALL City recorded revenue of US$38.5 million for H1 2015:
•  NOI was US$29.1 million for the six months, compared to US$39.3 million in H1 2014
•  Average monthly footfall in June 2015 was 19% higher than that in June 2014
• Over 90% of apartments at Odinburg Building 1 pre-sold (710 sale contracts signed as of 24 August 2015 in both Buildings 1 and 2)

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

“Amidst a challenging operating environment and in the face of continued macroeconomic uncertainty, our focus during the first half of the year was firmly on managing factors under our control. At AFIMALL City, we supported our tenants through a number of marketing initiatives which resulted in strong growth in footfall to the Mall, against a market-wide decline. At the same time, we reinforced our efforts aimed at reducing our operating costs, which led to a significant reduction in all of our expenses. Finally, development and marketing of non-yielding properties continues with steady progress across all projects.”