LONDON (Alliance News) - MirLand Development Corp PLC Wednesday reported a swing to a pretax loss for its first half, despite seeing a rise in revenue, due to a significant negative fair value adjustment caused by the weak condition of the Russian economy.
For the half year to end-June, the company posted a pretax loss of USD77.4 million, swung from a pretax profit of USD1.4 million a year before, as a rise in revenue to USD66.2 million from USD46.3 million was offset by a USD60.7 million fair value adjustment of investment properties and investment properties under construction.
The Russian residential and commercial property developer said it had adjusted the fair value of its investment portfolio after a decrease in projected net operating income, and made a further fair value adjustment following the depreciation of the Russian rouble against the dollar.
Revenue growth was driven by an increase in income from the sale of residential units, MirLand said.
The company is continuing talks with the trustees of its Series A-F bondholders to agree a restructuring of its debt, which it said will address the challenges posted by the current instability in the Russian economy.
"As I have stated previously, economic conditions in Russia are beyond our control, and there is no denying that our performance has been severely impacted by the devaluation of the Russian rouble and a consequent devaluation of assets. We are working hard to maximize value by all means within our control and continue to keep a close eye on capital expenditure," said Chairman Nigel Wright in a statement.
"Despite the current challenging conditions in the Russian market, we remain confident that the quality of our portfolio will be further demonstrated as the market improves in the long-term," Wright added.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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