PIK Group Profits Rise To $700M

Residential property developer PIK Group said Monday that its full-year 2007 net profit rose by 135 percent to $700 million, helped by booming demand for new housing that has spread to the regions.

The company, which raised $1.8 billion in an initial public share offer in June 2007, said in a statement that revenue increased 75 percent to $2.7 billion, from $1.5 billion in 2006.

"Strong economic growth combining with a large, obsolete housing stock, rising consumer wealth and increased mortgage penetration have created strong demand for new housing in Russia," chief executive Kirill Pisarev said.

Earnings before interest, taxation, depreciation and amortization increased by 93 percent to $939 million. EBITDA from development activity rose to $944 million, from $416 million.

The company also said earnings per share were up by 125 percent at $1.46, from 65 cents in 2006.

PIK operates in a dozen regions around the country and has announced plans to expand into neighboring Ukraine, its first move outside Russia.

The company said housing completions in Russia's regions rose by 132 percent to 371,000 square meters, while in and around Moscow they had risen by 89 percent at 643,000 square meters.

Central Moscow completions fell 29 percent to 528,000 square meters.

The company said its cash balance was $695 million as of Dec. 31, 2007, compared with $43 million in 2006.