Raven Profit Falls 10% on Higher Costs

Raven Russia, a British developer of warehouses in Russia and Ukraine, said Monday that first-half profit fell about 10 percent as the company incurred higher costs.

Net income declined to $48.2 million, or 11.17 cents per share, from $53.4 million, or 12.52 cents, a year earlier, the Guernsey-based company said in a statement. Gross rental income increased to $32.7 million from $15.8 million.

"We have more debt because we have been building more," chief executive Glyn Hirsch said by telephone. "We are focusing on a property sector that is massively undersupplied, the demand is very strong, there is not a huge amount of competition."

Russian economic growth has created a shortage of warehouses, spurring developers to build more properties, but higher borrowing costs and commodity prices have offset that expansion.

Finance costs rose to $6.4 million from $748,000 a year earlier, while administration costs more than doubled to $13.6 million, Raven said.