AFRB.L Share News (AFRB)

LONDON (Alliance News) - AFI Development PLC on Tuesday reported a slight drop in quarterly profit on fall in value of properties and higher expenses, despite a near-doubling in revenue.

The Russia-focused real estate company reported pretax profit of USD5.7 million for the three months to the end of March, down from USD6.5 million the year before.

This was as the loss on the fair value of properties widened further to USD34.6 million from USD4.0 million. The fair value adjustment was mainly driven by the strengthening of the Russian rouble to the US dollar during the quarter.

Total expenses for the quarter increased year-on-year to USD59.6 million from USD35.0 million, mainly on a jump in the cost of sales of trading properties.

Revenue however rose to USD94.0 million from USD49.4 million, on the sale of residential properties, which contributed around USD62.5 million towards AFI's total revenue.

AFI Development's total gross value of its property portfolio as at March 31 was USD1.26 billion, down from USD1.42 billion the same date the year before.

"AFI Development has had a confident start to the year, owing largely to residential presales recognition and stable performance of the yielding portfolio. At the same time, we remain mindful of the ongoing macroeconomic uncertainty in Russia as well as of potential negative influence of the new escrow schemes and launch of the state-funded housing programme on the Moscow residential development market. These factors are expected to place downward pressure on revenues and profitability of our projects," said Chair Eli Avrahampour.

Shares in AFI Development were untraded on Tuesday, last quoted at USD0.18.