OJSC RTM Published Full Year 2007 Results
OREANDA-NEWS. On 08 July 2008 OJSC RTM (RTS: RTMC) published its IFRS-compliant audited consolidated financial statements for the full year 2007.
According to the statements, revenue from investment properties of OJSC RTM’s grew 3.7 times over 2006 and reached \\$58.6 mln. The net operating margin (excluding the gain on revaluation of the investment-grade real estate) also showed a considerable growth of 55.1 per cent against 19.1 per cent for 2006.
OJSC RTM’s 2007 key financial highlights are provided below:
• Revenue from investment property reached \\$58.6 mln., showing a 3.7- times increase over 2006;
• Equity grew 175.8 per cent since December 31, 2006 totaling \\$384.4 mln;
• Shareholder equity share in the balance sheet total grew 16.9 percentage points to 44.9 per cent against 28.0 per cent as of the first of the year. (The share of equity in the overall business funding structure grew from 28.5 per cent to 44.9 per cent);
• Balance sheet total stands at \\$856 mln., a 72 per cent increase since December 31, 2006;
• Since December 31, 2006, net financial debt grew 24.8 per cent and reached \\$302.7 while the share of long-term debt in the financial debt structure grew from 62.7 per cent to 64.3 per cent;
• Over the year, the average lending interest rate dropped from 13.02 per cent to 12.4 per cent.
Eduard Vyrypaev, General Director and the majority stockholder of OJSC RTM, made the following comments regarding OJSC RTM’s 2007 financial results:
"The 2007 financial results accurately reflect this early phase in the development of our business where the company is laying the groundwork for future stable earnings from the portfolio of premium commercial and residential real estate properties we are busy putting together. The increased size of borrowings as shown on the balance sheet indicatives RTM’s active investment policies aimed at taking full advantage of the unique opportunities that arise on the regional real estate markets. The company was involved in implementing 12 concurrent projects in 2007. This includes the 4 projects in St. Petersburg, Lipetsk, Samara, and Odintsovo with the total floor area of 200,272 sq. m. that were brought into the construction phase. In addition, 2007 saw a drop in the average lending rate from 13.02 per cent to 12.4 per cent against an increase in the overall debt load.
As planned, in 2007 the RTM Group commissioned four shopping properties in Tula, Stavropol, and St. Petersburg with a total area of 20,472 sq. m. which resulted in the growth of the company’s real income. The income from properties held as investments grew 3.7 times over 2007 and reached \\$58.6 mln.
In 2008 RTM intends to continue pursuing its aggressive business development strategy. In the first quarter of this year the company consolidated 100 per cent of shares in OOO ReMa Immobilien which owns 53,300 sq. m. spread across 18 retail properties in Moscow that are leased to the European chain of supermarkets BILLA. In addition, RTM entered into a strategic partnership with a large Austrian investment fund ImmoEast and has signed a Memorandum of Understanding regarding the cooperation in the area of making investments in the Russian real-estate sector. Construction of a 89,639-sq.-m. shopping and entertainment center in St. Petersburg will be the partners’ first cooperative project.
In addition, RTM Group’s plans for 2008 include commissioning a 24,840 sq. m. shopping and entertainment center in St. Petersburg (in the vicinity of Kupchino metro station) and a 4,522 sq. m. office center in Moscow. According to a forecast by independent appraisors Colliers International, implementation of these two sites will bring the company an additional \\$8 mln of stable annual income.
As part of our business development course, we are going to reach new heights in development standards and expand our portfolio with new projects in such areas as retail, hotel and residential real estate. RTM is broadening its development strategy by exploring two new approaches, the so-called mixed-use and complex territory development projects. Both approaches are based on ideas that are novel in Russia, giving us confidence in the success of these projects. Their successful implementation will allow RTM to further strengthen its positions on the Russian real estate market and help achieve a considerable increase in the rate of return on investment.
To secure financing for its new projects, OJSC RTM is planning an additional issue of shares which is targeting the company’s existing shareholders.
OJSC RTM financial statements may be accessed on the company’s web site at http://rtmd.ru/investors/financial_reports/
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