PJSC LSR Group: LSR Group announces financial results for the first half of 2019

LSR Group announces financial results for the first half of 2019

• Operating cash flow increased to RUB 13 billion
• 18% YoY increase in average price per sqm
• Moscow sales surged 49% YoY, while revenue up 108% YoY

St. Petersburg, Russia - 29 August 2019 - PJSC LSR Group ("LSR" or the "Company") (LSE: LSRG; MOEX: LSRG), one of the leading real estate developers and building materials producers in Russia, today announces its consolidated IFRS results for the first six months ended 30 June 2019.

1H 2019 Financial Highlights:

• Revenues of RUB 46,608 million;
• Adjusted EBITDA amounted to RUB 7,817 million with adjusted EBITDA margin of 17%;
• Profit for the reporting period totalled RUB 1,864 million;
• Net debt decreased by 29% to RUB 21,629 million compared to RUB 30,290 million as at 31 December 2018;
• The Net debt / adjusted EBITDA ratio decreased to 0.62 in the first half of 2019 from 0.83 as at 31 December 2018;
• Earnings per share of RUB 18.60.

Other Highlights[1]:

• New contract sales reached RUB 38 billion, an increase of 6% year-on-year, or 368 th. sqm, with the average price per sqm up 18% year-on-year to RUB 114,000;
• In line with LSR's strategy to diversify its development assets in the Moscow region, the Company sold its 50% stake in ZILYUG redevelopment project;
• Launched sale of apartments in a new business-class residential estate 'Morskaya Naberezhnaya' in St. Petersburg. Located in a 34-hectare land plot, the residential complex has a total area of 886 th. sqm, with a living space of just over 503 th. sqm;
• In June, the AGM approved a dividend payment of RUB 8,036 million or RUB 78 per ordinary share for 2018. At the meeting of the Board of Directors following the AGM, Andrey Molchanov, the Company's founder, was appointed as CEO and Chairman of the Executive Committee.

Significant events after the end of the reporting period:

• In July, the Company sold its 100% interest in its subsidiary LLC LSR. Reinforced Concrete. This disposal represents another step towards the realisation of LSR Group's strategy to optimise its building materials business segment;
• In July, LSR Group's two projects, the premium-class residential project Russky Dom (Russian House) built in the heart of St. Petersburg, and Tyufeleva Roscha Park created as part of the ZILART project in Moscow, were ranked among the world's best architectural projects at the 2019 International Architecture Awards;
• In August, LSR Group expanded its sales portfolio with a new project - Zapovedny Park, a comfort class residential complex located on a 6-hectare land plot in the Primorsky District of St. Petersburg. The complex comprises 9 residential buildings, 14 to 25 stories high, with a residential area of more than 90,000 sqm. The Company has commenced the active construction stage of the complex and has launched apartment sales in the first building;
• LSR Group agreed on terms to acquire H+H Russia LLC, a subsidiary of the Danish group of companies H+H International A/S. With the design capacity of 400,000 m3 per year, H+H Russia LLC's factory offers an extensive product range of wall and partition blocks of various density, including D300, D400, D500, D600 and U-blocks.

Andrey Molchanov, CEO of PJSC LSR Group, commented:

"In the first half of 2019, LSR Group once again demonstrated the strength of its business and its market position as Russia's leading real estate developer.

New contract sales increased by 6% year-on-year amounting to RUB 38 billion, while the average price per sqm was up 18% year-on-year to RUB 114,000. This growth was driven by our Moscow projects which generated solid returns on our long-term systematic investments. Thus, in Moscow, our new contract sales were up 28% year-on-year to 117 th. sqm, reaching RUB 16.6 billion in value, up 49% year-on-year, with the revenue increase of 108% year-on-year to RUB 14.5 billion. Our financial position was further bolstered by strong operating cash flow generation of RUB 12.9 billion on the back of robust sales dynamics, while our cash balance reached RUB 66.4 billion as at the end of the reporting period.

We are optimistic about the future and, with the status of strategically important developer, we will continue to execute on our strategy and focus on the development of our key segments and regions".

Full version of the press release is available in PDF-format (link below) and on www.lsrgroup.ru

For further information please contact:

Igor Tsoy

Director of Investor Relations and Sustainable Development

E-mail: IR@lsrgroup.ru

About LSR Group:

PJSC LSR Group is one of Russia's leading residential real estate developers and building materials producers. Founded in 1993, the business of LSR Group is concentrated in the three largest regions of Russia - Moscow, St. Petersburg and Yekaterinburg. The main business areas of the Company are real estate development and construction and production of building materials. LSR Group carries out projects in all segments of residential real estate market: mass market, business and elite.

In accordance with its audited IFRS consolidated financial statements for 2018, LSR Group had revenue of RUB146.4 billion, Adjusted EBITDA of RUB36.4 billion and Net Profit of RUB16.2 billion. As of 31 December 2018 (according to Knight Frank), the net sellable area of projects in LSR Group's real estate portfolio amounted to 7.8 million m2 with a market value of RUB186 billion.

Ordinary shares of the Company are traded on the Moscow Exchange (MOEX: LSRG) and GDRs representing its ordinary shares are traded on the London Stock Exchange (LSE: LSRG).

www.lsrgroup.ru