19 Feb 2008 10:29
Open Joint-Stock Company LSR Group19 February 2008 THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, OR THE UNITED STATES For immediate release 19 February 2008 Independent Consultant DTZ Revalues the Real Estate Property Portfolio of LSR Group The independent consultant DTZ has revalued the real estate property portfolioowned by LSR Group. As of December 31 2007 (the effective valuation date) theGroup's development portfolio included 8.24 million sq.m of land compared to 7.8million sq.m held by LSR on June 30, 2007. The value of LSR's developmentprojects grew by USD 774 million to total USD 5,672 million (compared to USD4,900 million in June 2007). Commenting on this revaluation Evgeny Yatsyshin, Managing Director for RealEstate Development and Construction of LSR Group, said: "The increase in the value of LSR's real estate property portfolio was theresult of a number of factors, including the acquisition of new land assets,mostly in Yekaterinburg, and investments in construction projects, as well asthe growth of real estate prices in the 2nd half of 2007." At the end of 2007, as part of LSR Group's strategy of geographicaldiversification, it acquired 100% of the share capital of Investproekt LLC, aYekaterinburg company that owns land plots in that city with a total area of 50hectares. The transaction amounted to EUR 50 million and was financed withborrowings as well as proceeds from the IPO of the Group in the autumn of 2007.The company intends to use the plots for neighbourhood development projects tocreate economy class housing. According to the reports of DTZ, as of late 2007 the cost per sq.m of economyand business class residential property in Yekaterinburg was USD 2,150-2,500while average wages were 16,000 roubles per month (by this indicatorYekaterinburg is the third highest in Russia). In 2007, Standard & Poorsassigned a BB rating to Yekaterinburg, with a stable outlook. For reference: OJSC LSR Group is a diversified construction company founded in 1993 andoperating in a number of complementary market segments. Its core business areasare building materials, construction and real estate development. The Groupincludes enterprises for extraction and processing of aggregates, production andtransportation of building materials, and housing construction - from massmarket large-panel housing to elite property built after designs made by leadingdomestic and foreign architects. LSR Group has operations and offices in a number of cities in the LeningradOblast, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia,Ukraine and Germany. LSR Group employs over 15,000 people. In 2005 and 2006 the revenues of LSR Group(according to IFRS statements) were RUB 13,085.5 million and RUB 21,110.8million respectively. For the six months of 2007 the Group's revenues amountedto RUB 16,062.0 million compared to RUB 9,336.4 million for the same period lastyear. In July 2007, Moody's Investors Service assigned a B1 rating to LSR Group;outlook - stable. In November 2007, OJSC LSR Group implemented an IPO. InDecember 2007, LSR Group was bestowed a National Award in the field of businessas 'The Company of the Year' in the 'Construction' category. For more details please contact: Press Service, LSR Group+7 (812) 314-1044press@lsrgroup.ruwww.lsrgroup.ru Legal disclaimer: NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,AUSTRALIA, CANADA OR JAPAN Some of the information in these materials may contain projections or otherforward-looking statements regarding future events or the future financialperformance of the Company. You can identify forward looking statements by termssuch as "expect", "believe", "anticipate", "estimate", "intend", "will","could," "may" or "might" the negative of such terms or other similarexpressions. The Company wishes to caution you that these statements are onlypredictions and that actual events or results may differ materially. TheCompany does not intend to update these statements to reflect events andcircumstances occurring after the date hereof or to reflect the occurrence ofunanticipated events. Many factors could cause the actual results to differmaterially from those contained in projections or forward-looking statements ofthe Company, including, among others, general economic conditions, thecompetitive environment, risks associated with operating in Russia, rapidtechnological and market change in the industries the Company operates in, aswell as many other risks specifically related to the Company and its operations. Neither these materials nor any copy of it may be taken or transmitted into theUnited States, Australia, Canada or Japan. These materials do not constitute orform part of any offer or invitation to sell, or any solicitation of any offerto purchase nor shall it (or any part of it) or the fact of its distribution,form the basis of, or be relied on in connection with, any contract therefor.The offer and the distribution of these materials and other information inconnection with the listing and offer in certain jurisdictions may be restrictedby law and persons into whose possession any document or other informationreferred to herein comes should inform themselves about and observe any suchrestriction. Any failure to comply with these restrictions may constitute aviolation of the securities laws of any such jurisdiction. These materials are not an offer for sale of any securities in the UnitedStates. Securities may not be offered or sold in the United States absentregistration or an exemption from registration under the U.S. Securities Act of1933. 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