PIK announces 135% rise in net profit for 2007

London-listed Russian residential property developer PIK has reported a 75% rise in revenues to $2.7bn (EUR 1.73bn) last year from $1.5bn (EUR 961mln) in 2006. The company's net profit rose from $298mln in 2006 to $700mln (in 2007. According to an appraisal by CB Richard Ellis PIK's property portfolio increased from $8.8bn (EUR 5.6bn) at the start of 2007 to $12.3bn (EUR 7.88bn) as of 1 January 2008. Net debt fell to $716mln (EUR 459mln) from the previous year's figure of $869mln (EUR 557mln).

PIK's IPO in June 2007 for $1.93bn (EUR 1.24bn) was Europe's largest ever real estate IPO and the largest ever non-REIT public offering. The company entered the commercial sector in August 2007 through a majority stake acquisition in Moscow-based Storm Properties. At the end of the year a 25% stake in the Mytischi residential project was sold to GIC Real Estate, the government of Singapore’s real estate investment arm, for approximately $233mln (EUR 149mln).

Continued economic growth in Russia provides a strong outlook for the company. Building on average GDP growth of 6-8% over the last three years 2008 GDP growth is forecast at 7-8%. While inflation has increased recently the Russian mortgage market has not been affected by the credit crisis and demand for new, modern housing has risen. The government has proscribed the necessity for an additional 140 million m² of housing to come on the market by 2015. Rising demand in the regions will fuel further expansion as well, with the current 131,000 m² of regional residential space compared to 160,000 m² in 2006.