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. Last Updated: 07/27/2016

PIK Sees Collections On Track

Residential property developer PIK Group reiterated its full-year forecast for cash collections despite a darkening outlook for the real estate market.

"The fourth quarter has started strongly, and we expect cash collections from wholesale customers by year-end to total in the region of $1.0 billion," the company said in a statement last week.

"Management is therefore confident that the group is on track to achieve the guidance given to the market in the half-year results statement of $2.6 billion in cash collections for the year ended Dec. 31, 2008."

PIK said in September that it had secured substantial pre-sales of residential apartments and expected cash collections from apartment sales to rise 44 percent this year to $2.6 billion from $1.8 billion in 2007.

In the statement, PIK said its total nine-month cash collections rose 53 percent to $1.96 billion.

Cash collection from the sale of residential real estate jumped 78 percent in January to September to $1.54 billion, of which $545 million came in the third quarter, up 54 percent.

The real estate sector is already one of the worst hit by an acute liquidity squeeze and is struggling to repay foreign debts amassed in the past years.

Ratings agencies have warned of bankruptcies and forced asset sales in the real estate sector, and key players have already predicted that property prices will fall by up to 30 percent in the next six to 12 months.

Government officials met top players from the crisis-hit sector, including PIK, last week to discuss measures to maintain the pace of development of the construction sector as part of the state rescue package for key industries.

"The credit crisis is challenging businesses in Russia and around the world, but we are a cash-generative company and well placed to weather this difficult period," the statement quoted PIK's chief executive Kirill Pisarev as saying.