28 Jul 2011 07:00
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND
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INDIRECTLY IN THE UNITED STATES OF AMERICA
PIK GROUP ("The Group" or "PIK")
PIK CONTINUES 2Q11 WITH ROBUST SALES & CASH COLLECTIONS GROWTH AND REITERATES FY11 GUIDANCE
(LONDON, July 28 2011) - PIK Group (LSE: PIK), one of Russia's leading residential real estate developers, is pleased to publish today a trading update for the 6 months ended June 30, 2011 based upon management accounts.
Key highlights:
·; Cash collections from sale of apartments surged 63% to RUB 14.2 billion (1H10: RUB 8.7 billion) driven by higher volume and residential selling prices in the corresponding period;
·; Total gross cash collections for 1H11 showed continuing growth of the Group's operations and increased by 57% reaching RUB 23.3 billion (1H10: RUB 14.9 billion);
·; 1H11 new sales contracts to customers showed 44% growth up to 229 thousand sq meters compared to the same period of 2010 upon continuing market growth & diversification of product offering (1H11: 19 new addresses were introduced onto sale) accompanied by increasing mortgage affordability at PIK's projects;
·; 2Q11 sales funded by mortgages reached pre-crisis level at 25.3% as a result of PIK's initiative to introduce various mortgage partnership programs with Russian state-owned and private banks;
·; Cash collections from construction services were up by 49% at RUB 5.8 billion (1H10: RUB 3.9 billion);
·; FY2011 guidance on new sales contracts to customers of 520 000 square meters is reiterated together with total gross cash collections of RUB 50-55 billion (RUB 40-45 billion of which account for sales of apartments)
Cash collections summary (1)
(in RUB MM) | 1Q2010 | 2Q2010 | 1Q2011 | 2Q2011 | 1H2010 | 1H2011 | Change, % (2Q11/2Q10) | Change, % (1H11/1H10) | |||||
TOTAL GROSS CASH COLLECTIONS | 4 441 | 10 456 | 8 072 | 15261 | 14 897 | 23 333 | 45.6% | 56.6% | |||||
including | |||||||||||||
offsets with suppliers | 25 | 2 282 | 853 | 2 477 | 2 307 | 3 330 | 8.5% | 44.3% | |||||
TOTAL NET CASH COLLECTIONS(2) | 4 416 | 8 174 | 7 219 | 12 784 | 12 590 | 20 003 | 55.9% | 58.8% | |||||
including: Cash collections from residential real estate sales activities comprising: | 2 946 | 5 740 | 5 293 | 8 889 | 8 686 | 14 182 | 54.8% | 63.3% | |||||
- Cash collections from retail real estate sales | 2 542 | 3 471 | 4 927 | 6 763 | 6 013 | 11 690 | 94.8% | 94.4% | |||||
- Cash collections from wholesale real estate sales | 403 | 2 269 | 366 | 2 126 | 2 672 | 2 492 | -6.3% | 6.7% | |||||
Cash collections from construction services activities and others | 1 470 | 2 434 | 1 925 | 3 893 | 3 904 | 5 818 | 59.9% | 49.0% | |||||
Note:(1) In line with PIK's accounting standards, these cash collections will be recognized as sales revenue once the residential real estate properties have been completed and third party acceptance acts (formal building certification provided by authorities) are received upon the completed unit
(2) Excluding offsets with suppliers
Source: Management accounts
1H11 total gross cash collections reached RUB23.3billion, up by 56.6%. With a recovery in consumer confidence, improvements in macroeconomic conditions, mortgage accessibility and property price growth in place, PIK saw a 63% year-on-year growth in 1H11 residential real estate sales, which came to RUB 14.2 billion (1H10: RUB 8.7 billion). This was driven by retail sales which accounted for 82% of the total residential real estate sales.
Pre-sales launches summary (2011 YTD)
Project | Location | Start of sales | ||
South Chertanovo, mcr.17, 18 | Moscow | |||
"Chertanovsky", bldg. 40A "Chertanovsky", bldg. 40B (parking) | February 2011 July 2011 | |||
Khimki, 'Novokurkino' | Moscow region | |||
- bldg 10 | April 2011 | |||
- bldg 11 | April 2011 | |||
- 4G (parking) | June 2011 | |||
- bldg 8 | July 2011 | |||
Khimki, 'Levoberezny' | Moscow region | |||
- bldg 18 | April 2011 | |||
- bldg 2 | March 2011 | |||
Khimki, 'Sovhoznaya' | Moscow region | |||
- bldg 3 | July 2011 | |||
Khimki, 'Yubileiniy' | Moscow region | |||
- bldg 8a | February 2011 | |||
- bldg 10 | July 2011 | |||
Mytischi 'Yaroslavsky' | Moscow region | |||
- bldg 13 | February 2011 | |||
- bldg 14 | February 2011 | |||
- 64 (parking) | June 2011 | |||
Obninsk | Central Russia | |||
- mkr. 38, bldg 5 | January 2011 | |||
- mkr. 55, bldg 2A | March 2011 | |||
Kaliningrad 'Selma-2' | Western Russia | |||
- bldg 11 | January 2011 | |||
Roston-on-Don | Southern Russia | |||
- Grecheskogo str. | March 2011 | |||
- Orbitalnaya str., Nord | April 2011 | |||
Source: Management accounts
In 2011 year-to-date PIK continued aggressively launching new projects as the market continued to grow. In total 19 new projects were put on sale, of which 14 projects came from Moscow Metropolitan area. The rest was attributed by Russian regions.
New sales contracts to customers
000' sqm | FY07 | FY08 | FY09 | FY10 | 1H10 | 1H11 | Change, % | |
Total new real estate sales contracts to customers (1) | 825 | 520 | 123 | 392 | 159 | 229 | 44% |
Note: (1) including contracted retail and wholesales
Source: Management accounts
Total new sales to customers in 1H11 reached 229 thousand sq meters, of which 156 thousand sq meters attributed to sales to retail customers. 1H11 total sales to customers showed a 44% increased compared to the same period of last year. Moscow Metopolitan area contributed towards 89% of total new sales to customers.
As to the full year ended December 31 2011 PIK reiterates its guidance and targets 520 thousand square meters of total new sales to customers.
Share of mortgage funded retail sales
000' sqm | 1Q10 | 2Q10 | 3Q10 | 4Q10 | 1Q11 | 2Q11 | |
Share of sales funded by mortgages (1) | 3.1% | 6.4% | 9.3% | 7.5% | 12.4% | 25.3% |
Note: (1) based upon retail sales, calculated upon flats only
Source: Management accounts
In 1H2011 the Group significantly expanded its existing partnership programs in Moscow Metropolitan area and other regions with banks such as Sberbank, VTB24, Gazprombank, Svyaz-Bank, and renewed its partnership with Uralsib. The Group also signed new partnership agreements with AltayenergoBank, Bank Vozrogdenie, Investtorgbank, Bank Baltica, and Zenit Bank. The increased amount of partner banks and mortgage programs resulted in substantial growth of sales funded by mortgages.
Average property price dynamics (1)
Average property prices(2) (in '000 RUB per square meter) | FY2010 | 1H2011 | Change, % |
Moscow | 113.8 | 140.0 | 23.0% |
Moscow(excl. business-class) (3) | 103.7 | 114.1 | 10.0% |
Moscow region | 64.1 | 69.4 | 8.2% |
Other regions | 36.4 | 38.0 | 4.4% |
Note: (1) PIK is preselling properties at different stages of construction. Selling prices vary depending on geographic location, size, floor location, stage of construction. Accordingly, average prices per square meters represent blended average price calculations of the above.
(2) Calculated for property under construction on contracts with retail customers
(3) I.e. English Town project, which was launched in 4Q2010
Source: Management accounts
In 1H11 compared to FY2010, real estate prices in Moscow were up by 23%, excluding business-class projects (i.e. English Town) they showed 10% growth. At the same time, prices in Moscow region and other regions increased by 8.2% and 4.4%.
Enquiries:
Investors
PIK Group
Viktor Szalkay Tel: +7 495 505 97 33 ext. 1315/1358
International media
Citigate Dewe Rogerson
Tom Baldock Tel: +7 495 505 97 33 ext. 1315/1358
Priscilla Garcia
Russian media
Dmitry Ivliev Tel: +7 495 505 97 33 ext. 1010/1028