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LSR Group

November 25, 2008

LSR Group reports financial results for 9 months 2008

In the 9 months of 2008 LSR Group recorded the following financial results in accordance with the unaudited management accounts prepared in accordance with IFRS principles:

• Revenue increased by 53% to US$1,500m
• EBITDA increased by 86% to US$377m and EBITDA margin was up 25%
• Normalised operating profit grew by 95% to US$316m
• Normalised net profit increased by 98% to US$171m

CEO of LSR Group Igor Levit commented:
«We demonstrated the strong operating results for 9 months of 2008. Our revenue and EBITDA for 9 months of 2008 already increased the levels of the whole previous year of 2007.
However, we fully realize that we must be prepared for any future challenges.
It is difficult to fully estimate the extent of the influence of the financial crisis on our industry yet however we are taking all the measures necessary to ensure the stable work of the company. In particular:
- we have developed the special cost-cutting programme which is already being implemented;
- we have made and are continuing the negotiations with our suppliers to reduce the costs of our products and services;
- we strengthened the terms of our credit policy to prevent the occurrence of significant bad debts;
- we are revising our investment programme for 2009 to provide additional liquidity.
We are sure that thanks to these decisions as well as our market leadership in our core product segments, our integration with in-house building materials production and the investments into the efficiency of our manufacturing that we made in the previous years LSR Group will cope with all the difficulties created by the global financial crisis.”

Liquidity
At 31 October 2008 LSR Group had US$126m of cash (excluding the irrevocable cash deposit of US$138m linked with the long-term loan facility provided by RBS/HSBC).

The company has to pay out or refinance US$17m of debt (excluding finance lease liability) till the end of 2008, US$115m in the 1st quarter of 2009 and US$44m in the 2nd quarter of 2009.

Key Financials

Managements accounts prepared in accordance with IFRS (unadited)

 

 

 

 

 

Managements accounts prepared in accordance with IFRS (unadited)

 

9months YTD

    2007

 

        2007

       2008

   Change 

%

       US$m

      US$m

Revenue

978

1, 500

53%

1, 403

 

Cost of sales

        (645)

        (961)

49%

        (934)

 

Gross profit

334

539

62%

469

 

Gross profit %

34%

36%

 

33%

 

Distribution expenses

          (50)

          (78)

57%

          (69)

 

Administrative expenses

        (105)

        (141)

33%

        (150)

 

Changes in fair value of investment property

214

(166)

(178%)

315

 

Other expenses

(16)

(5)

(71%)

            (1)

 

Operating profit

376

149

(60%)

563

 

Operating profit %

38%

10%

 

40%

 

Net financing costs

          (40)

          (87)

118%

          (74)

 

Profit before income tax

336

62

(81%)

489

 

Income tax expense

          (87)

          (18)

(79%)

        (130)

 

Net profit

249

44

(82%)

359

 

EBITDA

203

377

86%

309

 

EBITDA %

21%

25%

 

22%

 

Net debt

629

1, 154

83%

629

 

Gross cash flow

209

361

73%

308

 

Amortisation and depreciation

41

61

49%

61

 

Capitalised capex

169

393

133%

255

 

Earnings per ordinary share

US$2.61

US$0.39

 

US$3.98

 

 

 

 

 

Normalised items (excluding the effect of the revaluation of the investment property)

9months YTD

      2007

        2007

    2008

    Change %

      US$m

     US$m

Revenue

978

1, 500

53%

1, 403

Cost of sales

        (645)

        (961)

49%

        (934)

Gross profit

334

539

62%

469

Gross profit %

34%

36%

 

33%

Distribution expenses

          (50)

          (78)

57%

          (69)

Administrative expenses

        (105)

        (141)

33%

        (150)

Changes in fair value of investment property

 

 

 

 

Other expenses

          (16)

            (5)

(71%)

            (1)

Operating profit

162

316

95%

248

Operating profit %

17%

21%

 

18%

Net financing costs

          (40)

          (87)

118%

          (74)

Profit before income tax

122

228

87%

174

Income tax expense

          (36)

          (58)

62%

          (54)

Net profit

86

171

98%

120

EBITDA

203

377

86%

309

EBITDA %

21%

25%

 

22%

Net debt

629

1, 154

83%

629

Gross cash flow

209

361

73%

 

308

Amortisation and depreciation

41

61

49%

61

Capitalised capex

169

393

133%

255

Earnings per ordinary share

  US$0.80

 US$1.79

 

US$1.23

Normalised operating profit equals to operating profit less the effect of revaluation of investment property, which is a non-cash item.
EBITDA equals to operating profit plus depreciation and amortization of fixed assets and intangible assets less changes in the fair value of investment property. EBITDA margin equals to the ratio between EBITDA and sales revenue.
Normalised net profit calculated as net profit excluding effect of revaluation of investment property (incl. recalculation of deferred tax).
Normalised earnings per share calculated as earnings per share excluding effect of revaluation of investment property (incl. recalculation of deferred tax).
Net debt calculated as the sum of non-current loans and borrowings, current loans and borrowings and bank overdraft minus cash and cash equivalents.
Gross cash flow represents operating profit before changes in working capital and provisions.
The measures described above are not defined in the International Financial Reporting Standards and should therefore be regarded only as supplementary information.
The financial indicators in this press release are rounded to whole numbers in US$ millions, and percentage changes in indicators are calculated using data in US$ thousands.

 

 

 

 

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