Average selling price increased by 7% in 2Q as compared to 1Q, up to RUB 103 ... We reiterate our full year guidance for
LSR Group’s 1H 2017 Trading Volume Update
Saint Petersburg, July 2017
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Contents Highlights
4
Real Estate Development and Construction
5
Moscow
7
St. Petersburg
8
Yekaterinburg
9
Building Materials
10
Appendix
11
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1H 2017 Highlights 1H new contract sales amounted to 257 th sq m (-30% y/y). Value of the contracts was RUB 26 bn (-32% y/y). Recognitions amounted to 183 th sq m vs. completions of 182 th sq m. We maintain the stock of completed real estate at the minimum level. Average selling price increased by 7% in 2Q as compared to 1Q, up to RUB 103 thousand The share of mortgage sales stands at 48% across the company in 1H 2017, reaching record high 52% in Q2. We reiterate our full year guidance for real estate development and building materials.
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Real Estate Development • New contract sales below 1H 2016 due to lower supply, but in line with the annual plan • Recognitions amounted to 183 th sqm vs. completions of 182 th sqm. • Average price per sqm was slightly down against 1H 2016 due to particular project mix in Yekaterinburg backed by the increased share of this region in our sales structure. In Moscow and St. Petersburg prices per sqm up 6% and 5% YOY. NEW CONTRACT SALES, TH SQ M
NEW CONTRACT SALES, RUB BN
-30%
-32%
366
38
257
1H 2016
1H 2017
26
1H 2016
1H 2017
RECOGNITIONS, TH SQ M
AVERAGE PRICE, RUB TH
109
-18% 107
103
93 96
99 88
102
97
87
1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16
224
3Q16
4Q 16 1Q/17 2Q/17
1H 2016
183
1H 2017
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Mortgage Lending • Mortgage rates down to historic low of 10.2% (TOP 15 banks) as of June 2017. AIZhK sets single digit rate (9.75%) for the first time in the history of Russia’s mortgage market. • Further decrease of the key rate and mortgage rates anticipated. • The share of mortgage contracts up to 52% in Q2 2017 across the Company. LSR MORTGAGE SALES BY NUMBER OF CONTRACTS
AVERAGE MORTGAGE RATES IN RUSSIA
14.7% 52 48 45
43
41
42
42 12.9%
36
34
32
34
34
25 21
12.1%
11.5%
11.9%
10.2% 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16 3Q/16 4Q/16 1Q/17 2Q/17
2013 Source: Company
2014
2015
2016
Source: AIZhK
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Real Estate Development: Moscow • 93 th sqm launched to the market, primarily in Luchi and ZILART projects • LOT 7 in ZILART is now available for sale (31 th sqm) • Share of mortgage contracts reaches 48% in Moscow • Price increased by 6% Y-o-Y, to RUB 146 th in 1H 2017. • Average price in ZILART in 1H 2017 – RUB 206 th (based on actual contracts)
NEW CONTRACT SALES BREAKDOWN BY VOLUME
26% 45%
Luchi ZILART Other
29%
NEW CONTRACT SALES, TH SQ M
NEW CONTRACT SALES, RUB BN
-52%
-49%
119
16.4 57
1H 2016
1H 2017
8.4
1H 2016
1H 2017
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Real Estate Development: St. Petersburg • 114 th sqm launched to the market in H1 2017, primarily in Novaya Okhta and Civilization • Our new elite development on Petrovsky Island will be available for sale in Q3 • Share of mortgage sales reaches 50% in mass market segment
NEW CONTRACT SALES BREAKDOWN BY VOLUME
22% 29%
Kalina-Park Novaya Okhta Civilization Shuvalovsky
18%
Other
14% 17%
NEW CONTRACT SALES, TH SQ M
NEW CONTRACT SALES, RUB BN
-28%
-25%
211
19.2 151
1H 2016
1H 2017
14.5
1H 2016
1H 2017
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Real Estate Development: Yekaterinburg • Sales growth driven by the increased supply in our projects Rassvetny & Michurinsky, which are in great demand among customers. • The share of mortgage sales reaches 51%.
NEW CONTRACT SALES BREAKDOWN BY VOLUME
14% Michurinsky
34%
Rassvetny
13%
Flagman Khrustalnye Klyuchi
11%
Other
29%
NEW CONTRACT SALES, TH SQ M
NEW CONTRACT SALES, RUB BN
+34%
36
1H 2016
+29%
48
1H 2017
2.7 2.1
1H 2016
1H 2017
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Building Materials • Ready-mix concrete sales driven by general market growth and new contracts with several largest local homebuilders. Mild winter favorably impacts supplies to infrastructure segment. • Sand affected by suspended supplies to construction of M-11 Federal road. Supplies resumed in March but suspended again in May. Lower demand from small and medium companies. • We reiterate our full year guidance for building materials based on H1 results.
Sales by product
1H 2016
1H 2017
Change, %
Crushed granite, th cbm
2,794
2,638
(6%)
Sand, th cbm
4,446
3,444
(23%)
Ready-mix concrete, th cbm
391
505
29%
Reinforced concrete, th cbm
124
99
(20%)
Bricks, mn units
149
140
(6%)
Aerated concrete, th cbm
640
708
11%
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Appendix
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Operating Guidance 2017: Real Estate & Construction NEW CONTRACT SALES, TH SQ M
COMPLETIONS, TH SQ M
+13%
+27% 770
1 000 788
681
2016
2017
NEW LAUNCHES, TH SQ M
2016
2017
CONSTRUCTION, TH SQ M
+22% +8% 890
1 000
728 925
2016
2017
2016
2017
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Operating Guidance 2017: Building Materials CRUSHED GRANITE, M CBM
SAND, M CBM
+5%
REINFORCED CONCRETE, TH CBM
+2%
+14% 6,6
260
10 6,3
256
8,7
2016
2017
READY-MIX CONCRETE, TH CBM
2016
BRICKS, M UNITS
+2%
2016
+8% 330
317
879
2017
2016
2017
AERATED CONCRETE, M CBM
+4% 900
2016
2017
1,5
1,4
2017
2016
2017
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Contacts For more information please contact: Yuri Ilyin Chief communications officer
Mob.: +7 921 958 23 63 Tel.: +7 (812) 320 56 53
[email protected]
You can watch the construction progress of all our projects in a free mobile app:
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