MirLand Development Corporation, one of the leading international residential and commercial property developers in Russia, today announces its interim results for the six months ended 30 June 2011.
- Total assets as at 30 June 2011 were US$756.1m (31 Dec 2010: US$704.5m), of which 92% are property and land assets;
- Total comprehensive income increased to US$34.5m for six months ended 30 June 2011 (six months ended 30 June 2010: loss of US$0.1m);
- Total revenues up 143% to US$23.2m (six months ended 30 June 2010: US$9.6m) due to improved occupancy rates, the opening of the Triumph Mall in Saratov, and partial recognition of income from house sales at the Western Residence project in Perkhushkovo;
- Net Income of US$4.0m for six months ended 30 June 2011 (six months ended 30 June 2010: US$8.1m); reduction largely due an increase in financing costs and the appreciation of the Rouble against the US$ which resulted in a negative fair value adjustment of certain commercial assets, but was compensated for by foreign exchange differences gain;
- Shareholders' equity substantially increased to US$375.9m at 30 June 2011, equating to 50% of total assets (31 December 2010: US$341.0m);
- Strong progress in financing activity during the period:
- During February the Company refinanced two loan facilities totaling approximately US$43.1m with two leading Russian banks;
- The Company also successfully raised approximately US$53.1m of debt through the issue of series C debentures, the conversion of series 2 and 3 warrants into series C and D bonds respectively, and from the sale of series D bonds to third parties by a subsidiary company.
- During the period the Company repaid loans to its shareholders of approximately US$40 million total (including interest accrued thereon).
- Portfolio value* increased by 7% to US$831.5m (Company's share) (31 Dec 2010: US$775.4m) as a result of improved market conditions, yield compression and further improvement in the operational results of the portfolio assets;
- Adjusted NAV* of US$516.9m (31 Dec 2010: US$493.4m), a 5% increase;
*Valuation undertaken by Cushman & Wakefield as at 30 June 2011. The valuation report is available on the Company's website at www.mirland-development.com
- Occupancy rates increased to 100% at the Vernissage Mall in Yaroslavl and the Triumph Mall in Saratov with both assets experiencing high footfall;
- Occupancy rates in Hydro, MAG and Century office buildings increased to an average of 99% (of available lettable space);
- The construction of the Tamiz building was successfully completed by the period end and is due to open in Q3 2011. Pre-let agreements or letters of intent are now in place for approximately 80% of the lettable area;
- Acquisition of the leasehold interest in a 40.6 hectares site in Novosibirsk designated for the development of a logistics centre of up to 180,000 sqm for a total consideration of US$2.2m.
Nigel Wright, Chairman, commented:
"Our policy of progressing our existing key projects continues whilst we prudently seek new opportunities for expansion. We are pleased with our success in both preserving and growing the strong revenue stream from our investment portfolio as this provides a sound foundation for future growth. Conditions in the Russian real estate market have slightly improved although we continue to see some sector and regional variations.
"Key economic indicators also give cause for modest encouragement, as do the early signs of improvement in the availability of domestic bank finance. However, volatile oil prices and events in the USA and Eurozone continue to give pause for thought. Accordingly we expect that continuing recovery will be gradual.
"To supplement our existing pipeline, we are actively seeking and reviewing new development and investment opportunities. However, we will only invest where we are confident that acquisitions will readily attract the requisite funding and add value to our high quality portfolio."