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Continued growth in Moscow with sales up 13% YoY in RUB terms despite a high base in 2018 and a 19% YoY increase in average price of apartments per sqm
· New contract sales reached RUB 84 billion, or 817 th. sqm;
· Average price per sqm increased by 15% year-on-year reaching RUB 112,000;
· Share of mortgage sales amounted to 47%, down from 54% in 2018 ;
· Completions reached 834 th. sqm of net sellable area, in line with the project schedule;
· New 835 th. sqm of net sellable area launched in the reporting period;
· Solid performance of building materials segment, with sales mainly in line with 2018 results, as per management expectations;
· In June, LSR Group launched sales of apartments in a new business-class residential estate ‘Morskaya Naberezhnaya’ in St. Petersburg, with a living space of just over 503 th. sqm;
· In June, in line with LSR’s strategy to diversify its development assets in the Moscow region, the Company sold a 50% stake in its ZILYUG redevelopment project;
· In July, the Company sold its 100% interest in its subsidiary LLC LSR. Reinforced Concrete. This disposal represents another step towards the realisation of LSR Group’s strategy to optimise its building materials business segment;
· In August, LSR Group expanded its sales portfolio with a new project — Zapovedny Park, a comfort class residential complex with a residential area of approximately 90,000 sqm. The Company has commenced the active construction stage of the complex and has launched apartment sales in the first building;
· In October, Fitch Ratings upgraded LSR’s Long-Term Issuer Default Rating (IDR) to ‘B+’, outlook stable;
· In October, LSR Group completed two bond placements of RUB 7 billion Series 001P-04 exchange-traded bonds at a coupon rate of 8.5% per annum and RUB 6 billion Series 001P-05 exchange-traded bonds at a coupon rate of 8.4% per annum;
· In November, LSR Group acquired Russian business of H+H International A/S for RUB 1.1 billion.
Andrey Molchanov, CEO of PJSC LSR Group, commented:
«We are pleased with LSR Group’s performance in FY 2019. A planned reduction in development sales volumes due to regulatory uncertainties that persisted for the first half of the year was partially compensated with an increase in price of 15% YoY, thereby improving Group’s profitability margins and demonstrating strength of our market offering. Sales in RUB terms decreased only by 9% YoY despite an exceptionally strong 2018.
Moscow development business unit demonstrated strong sales performance, with sales up 13% YoY in RUB terms due to our well-structured sales portfolio. The price increased by 19% YoY. Our business class segment in the Moscow market performed exceptionally well, with sales up 51% in RUB terms led by our flagship project Zilart, as well the increasingly popular Leningradka 58. Both of our large-scale projects — business class residential complex Zilart and mass-market residential complex Luchi have become leaders in sales volumes in 2019 within their respective market segments across the territory of Old Moscow.
Having secured strong access to liquidity, we are very pleased with the Group’s transition to the new market environment defined by the changes in housing legislation.
Looking ahead, we believe we are well positioned to execute on our strategy and maintain our leading market positions in key regions of presence.»
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