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LSR Group

May 12, 2011

LSR Group reports operating results for the first quarter of 2011

LSR Group (LSE: LSRG; MICEX, RTS: LSRG), one of the leading real estate developers and building materials producers in Russia, is publishing the operating update for the first quarter of 2011.

Real estate development and construction

Elite real estate in St. Petersburg

1Q 2010

1Q 2011

Change, %

Completed

 

 

 

th m2

0

0

-

New contract sales

 

 

 

th m2

5

8

78%

Transferred to customers

 

 

 

th m2

5

7

30%

 

 

 

 

Business class and mass market residential real estate in St. Petersburg

1Q 2010

1Q 2011

Change, %

Completed

 

 

 

th m2

152

5

(96)%

New contract sales

 

 

 

th m2

17

29

70%

Transferred to customers

 

 

 

th m2

50

30

(41)%

 


 

Real estate in Yekaterinburg

1Q 2010

1Q 2011

Change, %

Completed

th m2

15

0

-

New contract sales

th m2

4

10

160%

Transferred to customers

th m2

0.1

12

-

 


 

Real estate in Moscow

1Q 2010

1Q 2011

Change, %

Completed

th m2

-

2

-

New contract sales

th m2

0.3

3

-

Transferred to customers

th m2

-

0.4

-

 

Construction

1Q 2010

1Q 2011

Change, %

St. Petersburg

 

 

 

transferred to customers, th m2

65

40

(38)%

Yekaterinburg

 

 

 

transferred to customers, th m2*

22

32

45%

Moscow

 

 

 

transferred to customers, th m2

12

8

(29)%

 

*Sales figures in Yekaterinburg include both transfer of completed panel housing to the customers and sales of reinforced concrete for panel construction

Elite Residential and Commercial Property in St. Petersburg

In 1Q 2011, in the elite real estate segment in St. Petersburg, we entered into new contracts with customers for the sale of 8 th m2 of net sellable area, up by 78% on 1Q 2010.

The total value of contracts for sale of elite real estate to retail customers in the first quarter of this year was RUB 1.382 billion, up 119% on 1Q 2010.

In the course of the first quarter we transferred to our customers 7 th m2 of net sellable area. There were no housing completions in 1Q 2011 due to the projects schedule.

Business class and mass market residential real estate in St. Petersburg

In 1Q 2011 we entered into new contracts with the retail customers for the sale of 29 th m2 of mass market housing, up 70% on our sales in the market in 1Q 2010. The total value of the contracts signed with the retail customers was RUB 2.112 billion, up 81% on the sales in 1Q 2010. 30 th m2 were transferred to our customers in St. Petersburg.

In 1Q 2011, we completed 5.392 th m2 of net sellable area – one building in the residential complex Dolgoozerny in St. Petersburg.

Real Estate in Yekaterinburg

In 1Q 2011, in Yekaterinburg, we entered into new contracts with customers for the sale of 10 th m2 of net sellable area (+160%). In 1Q 2011 we transferred to the customers 12 th m2. The total value of the signed contracts grew by 209% versus 1Q 2010 reaching RUB 510m. There were no housing completions in 1Q 2011 due to the projects schedule.

Real Estate in Moscow

In 1Q 2011, in Moscow, we entered into new contracts with customers for the sale of 3 th m2 of net sellable area. The total value of the signed contracts was RUB 239m. 2 th m2 of properties were completed – commercial premises in the residential complex Grunwald.

In February 2011 CJSC Mosstroyrekonstruktsiya (a subsidiary of LSR Group) signed an investment contract to build a mass-market residential neighbourhood in Domodedovo, the Moscow region. Under the contract CJSC Mosstroyrekonstruktsiya is to build a residential multi-storey complex Yuzhny with a net sellable area of over 335 th m2. Construction of Yuzhny complex is scheduled to begin in 4Q 2011. The first houses of the complex are planned for completion in December 2012. The whole project is to be completed in 4Q 2015. Currently the project is being designed.

Construction

In 1Q 2010, our business units in St. Petersburg, Moscow and Yekaterinburg transferred to customers 80 th m2 of panel housing (including sales of reinforced concrete panels in Yekaterinburg), which is in accordance with the projects’ schedule.

In February 2011 we entered the new market segment – project management in construction of major public infrastructure projects. OOO LSR Stroy (a subsidiary of LSR Group) signed a contract with the Chief Army Support Department for design and construction of a military hospital in Anapa, the Krasnodar Region of Russia. Currently the project is being designed. The project completion is scheduled for December 2013.

Building materials and aggregates

Product

1Q 2010

1Q 2011

Change, %

Reinforced concrete, th m3

70

75

8%

Ready-mix concrete, th m3

171

216

26%

Bricks, million of units

26

29

12%

Aerated concrete, th m3

94

124

32%

Sand, th m3

1,417

1,693

19%

Crushed granite, th m3

568

660

16%

Building Materials

Reinforced Concrete

In 1Q 2011, we sold 75 th m3 of reinforced concrete products (excluding sales in Yekaterinburg), up 8% on the same period of 2010. It included 58 th m3 in St. Petersburg, and 17 th m3 in the Moscow/Moscow region.

Our sales in St. Petersburg increased by 12%, primarily due to increased construction volumes at large infrastructure projects, including Western High-Speed Diameter, Ust-Luga port and South-Western power plant.

In Moscow we mainly supplied reinforced concrete to our residential projects, including the residential complexes Sacramento (Balashikha, the Moscow region) and Novoe Nakhabino (Nakhabino, the Moscow region) as well as a residential complex for the military personnel in Balashikha.

In February 2011 OJSC Betfor Reinforced Concrete Factory (a subsidiary of LSR Group) acquired one of the leading reinforced concrete factories in the Urals region - CJSC Kamensk-Uralsk ZhBI. The factory’s annual capacity is 70 th m3 of reinforced concrete and 10 th m3 of ready-mix concrete.

In February 2011 OJSC PO Barrikada (a subsidiary of LSR Group) signed a contract to acquire 85.94% of OJSC Obukhov plant of building materials and structures, one of the largest reinforced concrete producers in St. Petersburg. Annual production capacity of the plant with one-shift working day is 35 th m3 of reinforced concrete and 90 th m3 of ready-mix concrete.

In March 2011 OJSC Zavod ZhBI-6 (a Moscow subsidiary of LSR Group) put into operation the new production line thus expanded its annual capacity to 240 th m2 of housing.

Ready-Mix Concrete

Ready-mix concrete sales were 216 th m3 (excluding sales in Yekaterinburg), up 26% on 1Q 2010. It included 166 th m3 sold in St. Petersburg and 50 th m3 – in the Moscow/Moscow region . Growth of sales was primarily due to increased demand and consumption of ready-mix concrete for initial construction works at residential, industrial and infrastructure projects.

In 1Q 2011, we supplied our ready-mix concrete to large residential and infrastructure projects in St. Petersburg, including new Zenith football stadium and State Academic Ballet Theatre of Boris Eifman.

In Moscow and the Moscow region we primarily supplied our ready-mix concrete to residential and commercial projects, as well as for construction of Mar'ina roscha metro station.

Bricks

Our bricks sales amounted to 29m units, up 12% against 1Q 2010. In St. Petersburg we mainly supplied our bricks to large residential projects. Growth of sales was primarily due to general market recovery as well as increased sales to Moscow (+20%).

Aerated Concrete

Aerated concrete sales amounted to 124 th m3 in 1Q 2011. St. Petersburg accounted for 46 th m3 and 78 th m3 were sold in Ukraine. Our sales volume grew by 32% against the same period last year mainly as a result of general market recovery.

In 1Q 2011, the bulk of aerated concrete in St. Petersburg was supplied to residential and civil projects (new Pediatric clinic).

In Ukraine our sales increased by 77% year-on-year due to product popularity and market growth in Kiev and Lviv regions. In 1Q 2011 we supplied our aerated concrete for construction of large commercial and residential complexes in Kiev and Lviv, including new Lviv football stadium for Euro-2012.

Aggregates

Sand

Sand sales in 1Q 2011 were 1.7m m3, up by 19% on 1Q 2010.

In 1Q 2011 we  recorded improved sales resulting from the general market recovery, increased spending on the major infrastructure projects and growth of building materials production volumes. In particular we supplied our sand for construction of the Motor Road St.Petersburg-Petrozavodsk, the Western High Speed Diameter and railroad in the Leningrad region.

Crushed Granite

In 1Q 2011, crushed granite sales (excluding sales in Yekaterinburg) totaled 660 th m3, which is 16% higher than in 1Q 2010. Improved sales of crushed granite were due to a general market recovery and the increased activity of the ready-mix concrete and reinforced concrete producers.

In February 2011 OJSC Granit-Kuznechnoye (a subsidiary of LSR Group) signed a preliminary contract to acquire crushed granite plant in the Leningrad region - OOO 436 KNI, including a license to use subsurface resources of Prudy-Mokhovoye-Yasninskoye gneiss granite deposit with reserves of 84m m3, located in the Viborgsky district of the Leningrad region. The annual production capacity of the plant is 1.1m m3 per year.

Note to Editors:
OJSC LSR Group is a real estate development and building materials company founded in 1993 and operating in a number of complementary market segments. Its core business areas are production of building materials, real estate development and panel construction.
LSR Group's main operations are located in St. Petersburg, Moscow, Yekaterinburg and Ukraine.
In 2010, the sales revenues of LSR Group were RUB 49,950m (IFRS).
LSR Group is a public company, with its GDRs traded on the London Stock Exchange and its ordinary shares traded on MICEX and RTS.

For more details please contact:
LSR Group Press Service
Tel.: +7 812 314 10 44
Fax: +7 812 458 83 72
E-mail: press@lsrgroup.ru
www.lsrgroup.ru

 

 

 

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