OREANDA-NEWS. August 04, 2011. LSR Group (LSE: LSRG; MICEX, RTS: LSRG), one of the leading real estate developers and building materials producers in Russia, is publishing the operating update for the first half of 2011, reported the press-centre of LSR Group.

In 1H 2011 in all regions of operations we completed 7 th m2, signed new contracts for the sale of 118 th m2 and transferred to customers 110 th m2. The total value of the contracts signed with our customers amounted to RUB 9.6 billion, up 83% against 1H 2010.

Elite Residential and Commercial Property in St. Petersburg
In 1H 2011, in the elite real estate segment in St. Petersburg, we entered into new contracts with customers for the sale of 23 th m2 of net sellable area, up by 78% on 1H 2010. In particular, we signed contracts for the sale of apartments with the net sellable area of 19 th m2, up 46%.

The total value of contracts for sale of elite real estate in the first half of this year was RUB 3.5 billion (including contracts for the sale of apartments worth RUB 3.1 billion), up 62% on 1H 2010. In the course of the first half of the year we transferred to our customers 19 th m2 of net sellable area. There were no housing completions in 1H 2011 due to the projects schedule.

Business class and mass market residential real estate in St. Petersburg
In 1H 2011 we entered into new contracts for the sale of 60 th m2 of mass market housing, up 68% on our sales in 1H 2010. The total value of the contracts was RUB 4.3 billion, up 72% on the sales in 1H 2010. The share of mortgage sales increased to 28% in the total number of contracts.

In 1H 2011 we transferred to retail customers 66 th m2, up 105% on 1H 2010. In 1H 2011, we completed 5 th m2 of net sellable area – one building in the residential complex Dolgoozerny in St. Petersburg.

Real Estate in Yekaterinburg
In 1H 2011, in Yekaterinburg, we entered into new contracts with customers for the sale of 26 th m2 of net sellable area (+156%). The share of mortgage sales increased to 38% in the total number of contracts.

Over the period we transferred to the customers 22 th m2. The total value of the signed contracts grew by 180% against 1H 2010 reaching RUB 1.3 billion. There were no housing completions in 1H 2011 due to the projects schedule.

Real Estate in Moscow
In 1H 2011, in Moscow, we entered into new contracts with customers for the sale of 8 th m2 of net sellable area. The total value of the signed contracts was RUB 544 m. 2 th m2 of properties were completed during the reported period, namely commercial premises in the residential complex Grunwald.

In February 2011, we signed an investment contract to build a mass-market residential neighbourhood in Domodedovo, the Moscow region. Under the contract we are to build a residential multi-storey complex Yuzhny with a net sellable area of over 335 th m2. Construction and sales are scheduled to begin in 4Q 2011. The first houses of the complex are planned for completion in December 2012. The whole project is to be completed in 4Q 2015. Currently the project is being designed.


Construction
In 1H 2011, our business units in St. Petersburg, Moscow and Yekaterinburg transferred to customers 262 th m2 of panel housing (including sales of reinforced concrete panels in Yekaterinburg), which is in accordance with the projects’ schedule.

In March 2011, our reinforced concrete plant in Moscow put into operation the new production line thus expanded its annual capacity to 240 th m2 of housing.

In 1H 2011, we signed two governmental contracts for construction of housing for military personnel in Moscow region. The total value of the contracts was RUB 7.4 billion. Under the contracts we are to build about 186 th m2 using the “seamless” facade technology and reinforced concrete products of DSK Blok.

In February 2011 we entered the new market segment – project management in construction of major public infrastructure projects. We signed a contract with the Chief Army Support Department for design and construction of a military hospital in Anapa, the Krasnodar Region of Russia. Currently the project is being designed. The project completion is scheduled for December 2013.

In June 2011, we signed two contracts for design and construction of a residential complex for military personnel with a total area exceeding 90 th m2 in Solnechnogorsk, the Moscow region. The total value of the contracts was RUB 3.6 billion. The project is to be completed in 2013.
Building Materials

Reinforced Concrete
In 1H 2011, we sold 209 th m3 of reinforced concrete products, up 31% on the same period of 2010. It included 159 th m3 in St. Petersburg, and 43 th m3 in Moscow/Moscow region.

Our sales in St. Petersburg increased by 31%, primarily due to increased construction volumes at large infrastructure projects, including Western High-Speed Diameter, Ust-Luga port and South-Western power plant.
In Moscow we mainly supplied reinforced concrete to our residential projects, including the residential complexes Sacramento (Balashikha, the Moscow region) and Novoe Nakhabino (Nakhabino, the Moscow region) as well as a residential complex for the military personnel in Balashikha.

In 1H 2011 we acquired two reinforced concrete factories (in St. Petersburg and the Urals region). The annual capacity of Obukhov plant located in St. Petersburg stands at 35 th m3 of reinforced concrete and 90 th m3 of ready-mix concrete. Kamensk-Uralsk ZhBI located in the Urals region is capable of producing 70 th m3 of reinforced concrete and 10 th m3 of ready-mix concrete per year.

Ready-Mix Concrete
Ready-mix concrete sales were 559 th m3, up 15% on 1H 2010. It included 415 th m3 sold in St. Petersburg and 142 th m3 – in Moscow/Moscow region. Growth of sales was primarily due to increased construction activity at large multi-purpose development projects.

In 1H 2011, we supplied our ready-mix concrete to large residential and infrastructure projects in St. Petersburg, including the Western High-Speed Diameter. The share of our sales to infrastructure projects increased as compared to 1H 2010.

In Moscow and the Moscow region we primarily supplied our ready-mix concrete to residential and commercial projects, as well as for construction of Mar'ina roscha metro station and a new building of Plekhanov Russian economic university.

Bricks
Our bricks sales amounted to 84 m units, up 9% against 1H 2010. In St. Petersburg we mainly supplied our bricks to large residential projects as well as for individual housing construction. Growth of sales was primarily due to general market recovery as well as increased sales to Moscow (+57%).

In May 2011, we signed contracts with Handle and Lingl (Germany) to produce and supply equipment for the new brick plant with a designed capacity of 220m bricks, which is currently under construction in the Leningrad region. The total value of the contracts is EUR 32.03 million (excluding VAT).

In June 2011, we acquired 93.44% of one of the largest facing bricks manufacturers - OJSC Pavlovskaya Keramika (designed capacity of 70 million bricks per year). The plant is located in Pavlovskiy Posad (Moscow region). It is equipped with the world-famous Keller HCW (Germany) and Bedeschi S.p.A. (Italy) engineering systems and production lines and it is one of the most advanced brick manufacturing facility in Russia.

Aerated Concrete
Aerated concrete sales amounted to 423 th m3 in 1H 2011, up 28%. St. Petersburg accounted for 175 th m3 and 247 th m3 were sold in Ukraine.

In 1H 2011, the bulk of aerated concrete in St. Petersburg was supplied to residential and civil projects (new Pediatric clinic). The sales growth was primarily due to the increased volume of individual housing construction.
In Ukraine our sales increased by 43% year-on-year due to product popularity both among large construction companies and retail customers. Low-rise construction accounted for major part of our sales in 1H 2011. We also supplied large residential projects in Kiev.

Aggregates

Sand
Sand sales in 1H 2011 amounted to 4.8m m3, up 24% on 1H 2010.

In 1H 2011 we  recorded improved sales resulting from the increased volume of  infrastructure construction and growth of building materials production. In particular we supplied our sand for construction of the Motor Road St.Petersburg-Petrozavodsk, the Western High Speed Diameter, Lomonosov freight terminal and railroad in the Leningrad region.

Crushed Granite
In 1H 2011, crushed granite sales totaled 1.9m m3, which is 12% higher than in 1H 2010. Improved sales of crushed granite were due to a general market recovery and the increased activity of the ready-mix concrete and reinforced concrete producers.
In 1H 2011, we acquired a crushed granite plant in the Leningrad region - OOO 436 KNI.  The annual production capacity of the plant is 1.1m m3, its gneiss granite reserves amount to 84m m3.


Note to Editors:
OJSC LSR Group is a real estate development and building materials company founded in 1993 and operating in a number of complementary market segments. Its core business areas are production of building materials, real estate development and panel construction.
LSR Group's main operations are located in St. Petersburg, Moscow, Yekaterinburg and Ukraine. As of 31 December 2010 (according to DTZ Russia), the net sellable area of the projects in LSR Group’s real estate portfolio is equal to 8.4m m2 with the market value of  RUB 104bn.

In 2010, the sales revenues of LSR Group were RUB 49,950m (IFRS).
LSR Group is a public company, with its GDRs traded on the London Stock Exchange and its ordinary shares traded on MICEX and RTS.