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Russia developer posts US$78m loss in 9 months

(MOSCOW) Russian property developer Sistema-Hals yesterday reported a net loss of US$77.6 million for the first nine months of 2007 compared with a net profit of US$34.3 million in the same period last year.

The company, part of diversified holding company Sistema, said operating expenses rose by 165 per cent to US$279.3 million mainly due to a US$98 million non-cash expense on a stock option bonus plan for management and the board of directors.

‘The increase in SG&A (sales, general and administrative expenses) was also caused by an increased number of personnel in line with an increase in the number of new development projects,’ the company said.

Its consolidated revenues rose by 28.8 per cent to US$207.5 million, with the real estate development division accounting for 68.6 per cent of total revenues.

Other divisions include project and construction management, asset management and facility management. Consolidated operating loss before depreciation and amortisation was US$63 million versus operating income before depreciation and amortisation of US$60 million a year earlier.

The company focuses on Class A office buildings, retail centres, multi-use complexes, villa communities and business-class residential buildings.


Source: Reuters Business Times 11 Dec 07

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