25 Nov 2008 09:14
NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
For immediate release
| 25 November 2008 | PRESS RELEASE | St. Petersburg |
LSR Group reports financial results for 9 months 2008
In the 9 months of 2009 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$44m in the 2nd quarter of 2009.
Key Financials
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| Managements accounts prepared in accordance with IFRS (unadited) | Normalised items (excluding the effect of the revaluation of the investment property) | ||||||
| 9months YTD | 2007 | 9months YTD | 2007 | |||||
|
| 2007 | 2008 | Change % | 2007 | 2008 | Change % | ||
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| US$m | US$m | US$m | US$m | ||||
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| |
| Revenue | 978 | 1, 500 | 53% | 1, 403 | 978 | 1, 500 | 53% | 1 403 |
| Cost of sales | (645) | (961) | 49% | (934) | (645) | (961) | 49% | (934) |
| Gross profit | 334 | 539 | 62% | 469 | 334 | 539 | 62% | 469 |
| Gross profit % | 34% | 36% |
| 33% | 34% | 36% |
| 33% |
| Distribution expenses | (50) | (78) | 57% | (69) | (50) | (78) | 57% | (69) |
| Administrative expenses | (105) | (141) | 33% | (150) | (105) | (141) | 33% | (150) |
| Changes in fair value of investment property | 214 | (166) | (178%) | 315 |
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|
| |
| Other expenses | (16) | (5) | (71%) | (1) | (16) | (5) | (71%) | (1) |
| Operating profit | 376 | 149 | (60%) | 563 | 162 | 316 | 95% | 248 |
| Operating profit % | 38% | 10% |
| 40% | 17% | 21% |
| 18% |
| Net financing costs | (40) | (87) | 118% | (74) | (40) | (87) | 118% | (74) |
| Profit before income tax | 336 | 62 | (81%) | 489 | 122 | 228 | 87% | 174 |
| Income tax expense | (87) | (18) | (79%) | (130) | (36) | (58) | 62% | (54) |
| Net profit | 249 | 44 | (82%) | 359 | 86 | 171 | 98% | 120 |
| EBITDA | 203 | 377 | 86% | 309 | 203 | 377 | 86% | 309 |
| EBITDA % | 21% | 25% |
| 22% | 21% | 25% |
| 22% |
| Net debt | 629 | 1, 154 | 83% | 629 | 629 | 1, 154 | 83% | 629 |
| Gross cash flow | 209 | 361 | 73% | 308 | 209 | 361 | 73% | 308 |
| Amortisation and depreciation | 41 | 61 | 49% | 61 | 41 | 61 | 49% | 61 |
| Capitalised capex | 169 | 393 | 133% | 255 | 169 | 393 | 133% | 255 |
| Earnings per ordinary share | US$2.61 | US$0.39 |
| US$3.98 | 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.
Notes to Editors:
OJSC LSR Group is a diversified construction company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate development. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction - from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.
LSR Group has operations and offices in a number of cities in the Leningrad region, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany.
In 2007, the sales revenues of LSR Group (according to the IFRS-based financial statements) were US$ 1,403 million.
LSR Group is a public company, with its GDRs listed and traded on the London Stock Exchange and its shares listed and traded on MICEX and RTS.
In 2007, LSR Group was awarded 'The Company of the Year' National Award in the 'Construction' category.
For more details please contact:
Press Service, LSR Group
+7 (812) 314-1044press@lsrgroup.ru www.lsrgroup.ru
Legal disclaimer:
Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. 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. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend 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 projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries the Company operates in, as well as many other risks specifically related to the Company and its operations.
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