LONDON (Alliance News) - Brack Capital Real Estate Investments NV late Thursday said its profit plunged in 2015 after it its associates and joint ventures in Russia delivered substantial losses whilst other costs rose in the year, prompting it to focus on its other geographical regions.
Brack said its pretax profit dropped to EUR15.2 million in 2015 from the EUR94.3 million reported in 2014, after its share of losses of associates and joint ventures amounted to EUR103.9 million compared to delivering a EUR2.5 million profit the year before.
That EUR103.9 million loss comes from Russia, where it holds stakes in other funds and has joint ventures.
Following tax, however, Brack made a net loss of EUR18.0 million, swinging from a EUR84.4 million profit as its tax bill rose to EUR33.2 million from EUR9.9 million.
Brack's net asset value also fell to EUR240.7 million from EUR267.3 million, which it said was a reflection of its expansion in the US and Germany and because of the current economic climate in Russia, where it has properties.
The aggregate value of Brack's portfolio at the end of 2015 was EUR2.10 billion, rising from EUR1.90 billion.
Exacerbating the losses made from its associates and joint ventures was a rise in administrative costs and "other expenses" totalling EUR15.7 million compared to EUR526,000 in income a year earlier.
However, the revaluation of its investment property stood at EUR143.2 million, rising from EUR112.2 million in 2014 to partly cushion the losses made elsewhere.
Revenue from rental incomes also increased to EUR75.4 million from EUR60.0 million, helping Brack to up its gross profit to EUR67.1 million from EUR60.6 million.
"Following the acquisition of 720 West End Avenue and completion of the Indigo Lower East Side hotel in Manhattan, New York, we have successfully managed to increase our exposure to the US market and move towards a more balanced global portfolio, as intended," said Chief Executive Ariel Podrojski.
"It was a challenging year with the crisis in Russia and the overall global uncertainty. With the completion of the Lyubertsy shopping centre in the Moscow region, we have reduced our development exposure significantly," he added. "Going forward, the Company intends to continue focusing on the US and German markets, and carry on stabilising its portfolio in Russia."
Brack shares closed up 2.2% to 0.950 pence per share on Thursday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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