28 Jul 2008 09:00
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY IN THE UNITED STATES OF AMERICA
PIK GROUP ("PIK" or "the Group")
PIK GROUP LAUNCHES THE FIRST MODERNISED HOUSING
PRODUCTION PLANT IN RUSSIA'S REGIONS
(LONDON, 28 July 2008) - PIK Group (LSE: PIK), one of Russia's leading residential real estate developers, today announces the launch of its first regional housing production plant in the city of Obninsk (Kaluga Region).
In line with its established strategy, PIK plans to implement a new precast technology in Russia's regions in order to provide sustainable execution capacity. Currently, PIK is in the process of introducing four precast facilities throughout Russia, of which the first is being launched in Obninsk with annual capacity of 80,000 square metres of housing.
A further three plants are expected to be put into operation by summer 2009, in Sergeev Pasad (Moscow region), Nizhny Novgorod and Novocherkassk (Roston-on-don region). Additionally, PIK intends to start the modernisation of another facility in Perm city.
The usage of in-house production facilities will enable the Group to provide sufficient control over the development process and mitigate risks arising from subcontracting to third parties.
The technology allows the Group to apply industrial methods in construction with the following key advantages:
Economies of scale on construction costs leading to pricing advantages compared to poured concrete technology (cost advantage is estimated at 25%);
Rapid construction speed enabling the Group to build the superstructure of a 17 storey building within only 3 months;
Ease of transportation: the standardised manufactured elements of the buildings may be transported within a 500 km radius from the production site;
Compliance with an appropriate quality standard;
Flexibility of space planning (variable ceiling heights, and apartment layouts)
Space and cost efficiencies with the usage of underground facilities (e.g. underground parking lots);
PIK intends to implement and construct the first buildings of the above type in Obninsk city, where the Group owns 74 thousand square metres of net sellable space for completion by Q2 2010.
The total investment in the modernisation of the production facility in Obninsk will be approximately US$5.5MM.
Enquiries:
| Investor Relations PIK Group Viktor Szalkay | Tel: +7 495 505 97 33 ext. 1358 |
| Public Relations PIK Group Natalia Konovalova | Tel: +7 495 232 11 22 |
| Citigate Dewe Rogerson Tom Baldock Lindsay Noton | Tel: +44 20 7638 9571 |
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of PIK. You can identify forward-looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. PIK does not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in PIK's projections or forward-looking statements, including, among others, general economic conditions, PIK's competitive environment, risks associated with operating in Russia, rapid technological and market change, and other factors specifically related to PIK and its operations.
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NOTES TO EDITORS
PIK Group Overview
Founded in 1994, PIK is one of the leading vertically integrated residential developers with presence in over 20 cities across Russia. Its business activities are concentrated in Moscow and the Moscow region with an increasing footprint in many of Russia's other regions. Its principal activity is the development, construction and sale of residential properties in large scale developments targeted primarily at the middle income housing market in Russia.
Since 2004, PIK has completed over 4 million square meters of residential housing, which is equivalent to approximately 58,000 residential units across Russia.
June 1, 2007, the Group completed successful listings on the London Stock Exchange, the RTS and MICEX exchanges in Russia.
PIK Group's website address is: www.pik.ru
Group Financial Summary
Revenue for 2007 rose by 75% and equalled US$2.7 billion, while EBITDA for 2007 amounted to US$939 million. Net profit was US$700 million in 2007 compared to US$ 298 million in 2006.
According to CBRE, an independent appraiser, the combined market value of the Group's properties valued as of January 1, 2008 was $12.3 billion.