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PIK Group

July 17, 2013

2Q2013 trading update

(LONDON, July 17 2013) - PIK Group (LSE: PIK), one of Russiaís leading residential real estate developers, is pleased to publish a trading update for six months ended June 30, 2013 based upon management accounts.

1H2013 key highlights:

  • Total net cash collections up by 34.1% to RUB 33.9 billion (1H12: RUB 25.3 billion);

∑        Cash collections from sale of apartments to individuals increased by 45.0% to RUB 25.9 billion (1H12: RUB 17.8 billion) driven by mix of selling price and volume growth;

∑        Cash collections from construction services and other activities slightly changed to RUB 5.5 billion (1H12:RUB 5.7 billion);

  • New launches consolidated at 19 properties on sale (1H12: 20) of which 14 came from Moscow Metropolitan area, demonstrating healthy operational run-rate; 
  • New sales contracts (ĎNSCí) to customers grew to 291 thousand square meters, up by 7.8% yoy driven by underlying fundamental demand for affordable housing;
  • The structure of NSC remained consistent with previous periods and was as follows:

∑             29.5% is derived from Moscow and New Moscow territory (1H12: 27.4%);

∑             53.0% is generated in Moscow region (1H12: 51.8%);

∑             17.5% came through other regions (1H12: 20.8%);

  • Mortgage backed sales continued to surge, reaching 39.2% in 2Q13 on the back of macroeconomic stability and customer confidence; mortgage rates remained stable for the period;
  • Compared to FY2012, average net selling prices at PIKís properties under different stage of construction showed 21.2%, 1.4% and 7.1% increase in Moscow, Moscow region and other regions accordingly; Significant appreciation of selling prices in Moscow is driven by the fact that stock on sale has been at final stage of construction, triggering higher prices to customers;
  • In early June 2013 PIK Group completed its RUB 10.45 billion (equivalent to USD 330 million) capital increase issuing 167,236,960 new shares;
  • Compared to December 31 2012, total debt excluding accrued interest payable decreased by RUB 6.5 billion from RUB 41.9 billion to RUB 35.4 billion as result of accelerated debt redemption throughout 1H13. This has been in line with PIKís strategy to deleverage its balance sheet to sustainable levels;
  • In the same period, PIK heavily cut its net debt by RUB 13.9 billion down to RUB 22.9 billion as a result from the Groupís capital increase. 

2013 Outlook

  • In accordance with the Groupís strategy, PIK plans to use excessive cash balances to further deleveraging and reducing total debt below RUB 30 billion by the end of the current year.
  • In line with disciplined approach towards new purchases and subject to availability of projects meeting margin requirements, PIK targets to spend up to RUB 4.5 billion for new acquisitions with the aim to replenish existing landbank;
  • Operational environment remains good; PIK reiterates 2013 guidance on NSC to customers between 660,000-700,000 square meters with total gross cash collections of RUB 69-73 billion.




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