OREANDA-NEWS. February 14, 2011. LSR Group (LSE: LSRG; MICEX, RTS: LSRG), one of the leading real estate developers and building materials producers in Russia, is publishing the operating results for the full year 2010, reported the press-centre of LSR Group.

Building Materials

Reinforced Concrete
In 2010, we sold 342 th cub.m of reinforced concrete (excluding sales in Yekaterinburg), up 19% against 2009. In particular, we sold 276 th cub.min St. Petersburg and 66 th cub.m in Moscow. The growth of sales was due to the general recovery of the market, which became most evident starting from the second quarter of the year. The share of reinforced concrete products used for foundation works in the total sales increased as compared to 2009 due to start of new construction projects.

In 2010 we supplied our reinforced concrete for construction of certain residential and commercial real estate projects as well as for civil projects under governmental contracts (Osinovaya Roscha). In the infrastructure segment, our products were supplied for the construction of the Torfyanovka Customs Terminal, Sea Commercial Port in Ust-Luga, Southwestern Power Plant and for the repair of airfields of certain Russian military airports.

In the 4th quarter of 2010 we also supplied reinforced concrete for the construction of housing for military personnel in Moskovskaya Slavyanka in the Leningrad region.

 In 2010, in Moscow, we supplied our reinforced concrete for construction of several residential and infrastructure projects including pre-school educational institutions and secondary schools (in Khotkovo, Losinoostrovsky district, Obruchevsky district, Lyuberetskie aeration fields), new building of the Peoples’ Friendship University of Russia, residential neighbourhoods Sacramento and Novoe Nakhabino (projects of LSR Group), new building of the pretrial detention center N4 and a residential neighbourhood for military personnel in Balashikha under an order placed by the RF Defence Ministry.

Aerated Concrete
In 2010 we sold 795 th cub.m of aerated concrete (excluding sales in Yekaterinburg), including 335 th cub.m in St. Petersburg, 66 th cub.m in the Baltic States, Scandinavia and Poland and 394 th cub.m in Ukraine. As compared to 2009, our sales increased by 8%. However, in Ukraine our sales increased by 30% year-on-year due to growing popularity of aerated concrete, which is a relatively new material for Ukrainian market, and, consequently, further expansion of our sales geography along with the fact that our production facilities reached their designed capacity. Most of aerated concrete in Ukraine was supplied to infrastructure and residential projects such as Kharkov, Borispol and Lviv airports, along with residential and commercial projects in Kiev, Poltava and Lviv.

Due to the low efficiency of our aerated concrete capacities in the Baltic States and the fact that Lithuania, Latvia and Estonia are not the strategic markets for LSR Group we decided to sell these assets. The corresponding deal worth EUR 4.328 million was completed on 31 December 2010.

In 2010 most of aerated concrete in St. Petersburg was supplied to residential, infrastructure and commercial projects including construction of the Stockman and Galeria shopping centres, new building of the National library of Russia in Moskovsky Prospect, medical rehabilitation centre in Parkhomenko Prospect. We should also mention growth of country houses construction in the demand structure.

Ready-Mix Concrete
In 2010 we sold 1,112 th cub.m of ready-mix concrete (excluding sales in Yekaterinburg), up 36% on 2009. In particular, in St. Petersburg we sold 774 th cub.m, in Moscow – 338 th cub.m. Growth of demand for ready-mix concrete during the year was mainly due to increased volume of foundation works in residential, industrial and infrastructure projects.

In St. Petersburg we supplied our ready-mix concrete to industrial, infrastructure, commercial and residential construction projects including Stockman shopping centre, Polyustrovo business area, TPP 5, Ring Motor Road (KAD), Western High Speed Diameter (ZSD), Hyundai and General Motors car factories, as well as several residential construction projects.
In Moscow we primarily supplied ready-mix concrete for residential projects including residential neighbourhoods Sacramento and Novoe Nakhabino (projects of LSR Group). We also supplied our ready-mix concrete for construction of a new building of the State Tretyakov Gallery, residential neighbourhood for military personnel in Balashikha under an order placed by the RF Defence Ministry and certain commercial and infrastructure projects including Moscow International Business Centre (MMDTs Moscow-City), a shopping centre in Paveletskaya Square, an office building in Michurinsky Prospect, Spartak stadium, metro station Ploschad Revolyutsii and reconstruction of the General Staff building.

Bricks
In 2010 we sold 172 million non-formatted units, up 2% against 2009. We mainly supplied bricks for construction of large residential complexes in St. Petersburg. In addition, bricks enjoyed demand from individual home construction, which accounted for over 6% of the total sales in 2010.

Cement
In November 2010 LSR Group performed technological launch of a new cement plant in Slantsy, Leningrad region. The production capacity of the plant is 1.86 million tons of cement per year. The total amount of investment into the project is EUR 445 million.

The production launch is planned for Spring 2011.

Aggregates
Sand
In 2010 we sold 9.8 million cub.m of sand, down 4% against 2009. The decrease was due to the fact that the Sea Front land reclamation project on Vasiliyevsky Island in St. Petersburg (which accounted for a 13% of the total sand sales in 2009) was suspended in 2010. Net of the Sea Front project our sales in the traditional market increased by 11% as compared to 2009.

We primarily supplied sand to infrastructure projects including construction of the Ring Road (KAD) and the Western High Speed Diameter (ZSD).

Besides, LSR Group obtained the right for the eight resource sites in the Leningrad region through the auctions held by the Mineral Resources Department. The aggregate reserves of the quarries are estimated at 19 million cub.m.

Crushed Granite
In 2010 we sold 4 million cub.m of crushed granite (excluding sales in Yekaterinburg), up 12% on 2009. Improved sales of crushed granite was due to a general market recovery and the increased activity of the ready-mix concrete and reinforced concrete producers as well as launch or resuming the city’s major infrastructure projects.

In particular, we supplied crushed granite to such infrastructure projects as the high speed railways of the Russian Railways (St. Petersburg – Moscow, St. Petersburg – Vyborg), Ring Motor Road (KAD), Western

High-Speed Diameter (ZSD), upgrading of Sea Port and Petrolesport jetties, construction of an interchange by IKEA Parnas, construction of Hyundai factory.

Elite real estate in St. Petersburg
In 2010, in the elite real estate segment in St. Petersburg, we signed new contracts with customers for the sale of 35 th sq.m of net sellable area, up 34% against 2009 and up 66% on our apartment sales in elite segment in St. Petersburg. The total value of contracts for sale of elite real estate to retail customers amounted to RUB 5.213 billion, up 21% on 2009.

In 2010 we transferred to our customers 29 th sq.m of net sellable area. Decrease of housing completions in 2010 was due to the projects schedule.

In December 2010 we commissioned a prime office building with a net leasable area of 2.9 th sq.m in Paradny Quarter and thus we have completed the first stage of Paradny Quarter project.

Mass market and business class residential real estate in St. Petersburg
In 2010, in the mass market and business class residential real estate segment in St. Petersburg, we signed new contracts with the retail customers for the sale of 104 th sq.m of net sellable area, up 68% on our sales in the market in 2009. The total value of the contracts signed with the retail customers was RUB 7.253 billion, up 61% on market sales in 2009. 233 th sq.m were transferred to our customers in St. Petersburg, which complies with the projects timeline.

In 2010 in St. Petersburg we completed 283 th sq.m of net sellable area, up 244% against 2009. In particular, we completed the last building in the residential complex Komendantskaya Square House with a net sellable area of approximately 20 th sq.m. Also we completed six buildings with a net sellable area of approximately 180 th sq.m in our Yuzhny residential complex, one building in Karolina residential complex (21 th sq.m), one building in Dolgoozerny residential complex (5.3 th sq.m), two buildings in Fortuna residential complex (approximately 32 th sq.m), two buildings in Pulkovsky Posad residential complex (approximately 14 th sq.m) and one building in Antey residential complex (11.6 th sq.m).

Real Estate in Yekaterinburg
In 2010, in Yekaterinburg, we signed new contracts with customers for the sale of 39 th sq.m of net sellable area (up 65% on 2009) and transferred to our customers 48 th sq.m (up 23% on 2009). The total value of the signed contracts grew by 62% as compared to 2009, up to RUB 1.867 billion. In the course of 2010 we completed 82 th sq.m of net sellable area. In particular we completed three houses with a net sellable area of 28.4 th sq.m in our Green Cape residential complex, one house in Bilimbaevskaya-Angarskaya Street (7.5 th sq.m), three houses with a net sellable area of 34 th sq.m in Kalinovsky residential complex, one house (approximately 5 th sq.m) in Tatishev residential complex and one residential building (6.5 th sq.m) in Postovskogo Street.

Real Estate in Moscow
In 2010, in Moscow, we signed new contracts with customers for the sale of 4.5 th sq.m of net sellable area. The total value of the signed contracts was RUB 556 million. We transferred to our customers 15 th sq.m. In 2010 we completed 37 th sq.m in the residential complex Grunwald.

Construction
In 2010 LSR Group’s subsidiaries in St. Petersburg, Moscow and Yekaterinburg transferred to customers 572 th sq.m of panel housing, including 379 th sq.m in St. Petersburg, 124 th sq.m in Yekaterinburg and 69 th sq.m in Moscow.