LONDON (Alliance News) - Arricano Real Estate PLC, which operates shopping centres and develops real estate in Ukraine, Friday said it swung to a loss in 2014.
The company's pretax loss amounted to USD69.6 million in 2014, compared with a USD4.1 million pretax profit in 2013. Operating profit was stable at USD10.5 million, with revenue down by 10% at USD22.8 million, gains on revaluing investment property jumping to USD42.3 million from USD1.8 million, and operating expenses quadrupling to USD50.9 million.
The major hit to the pretax profit came from finance costs, which swelled to USD86.1 million from USD10.3 million, largely due to losses on foreign exchange and impairment of a financial asset available for sale.
"In the context of the market in which we have been operating, Arricano remains in a good position. In 2014, the company expanded the size of its portfolio by 21% with the completion of two projects. Occupancy remains high, and with the support of our major shareholder, we will be in a good position to benefit, when Ukraine normalises," Chairman Rupert Cottrell said in a statement.
Cottrell said that 2015 is likely to be another challenging year due to the economic and political difficulties in Ukraine.
"We have worked hard to structure the business so that it will be able to benefit from the recovery when it arrives. Ukraine remains severely structurally undersupplied in terms of good to high quality retail space and Arricano continues to establish a market leading portfolio of shopping and entertainment centres in key Ukrainian cities," the chairman said.
Chief Executive Mykhailo Merkulov said: "The company sees 2015 as a year of opportunity for its business. We hope that the geopolitical situation will stabilise and the military conflict in the east of the country will at least move to a more dormant phase, which would result in economic stabilisation that is much needed after the turmoil of 2014."
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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