TIDMAURR
RNS Number : 8158W
Aurora Russia Limited
25 November 2010
25 November 2010
AURORA RUSSIA LIMITED
Interim Trading Update
Aurora Russia Limited ('Aurora Russia' or the 'Company') today
announces a trading update on its investee companies ahead of its
interim results for the six months ended 30 September 2010 which
are expected to be released in December 2010.
Highlights for the period include:
- Growth in the Russian economy has resulted in improved
performance in the Company's investee companies (particularly in
the three months ended 30 September 2010).
- The Board currently expects OSG, Unistream and Superstroy to
be profitable in the year ending 31 December 2010.
- OSG remains the largest records management company in Russia,
Ukraine and Kazakhstan. OSG had a record month in September in
terms of revenues which were GBP1.2m, up 40% from the prior year
period and representing 9% growth over the previous month.
- Unistream continues to be the leading outbound money transfer
company in Russia with c. 21% market share. Unistream's volumes
grew 10.9% year-on -year ("YoY") in August and 9.7% YoY in
September 2010. August was the first month of YoY volume growth
since the financial crisis.
- Superstroy is the leading DIY company in the Urals Region of
Russia. It grew its revenues by 32% YoY in September following
growth of 28% YoY in August and 23% YoY in July. Superstroy began
to grow again in April following the global financial crisis.
- Flexinvest Bank's interest and fee income grew 47% compared to
the prior year period and was at GBP746,000 for the nine months
ended 30 September 2010.
- Kreditmart's broker fees were GBP424,000 for the nine months
ended 30 September 2010, representing a 156% increase YoY.
Update on Russian economy
Russia's economy has returned to growth in 2010 after output
contracted 7.9% in 2009 but the economic recovery is still fragile.
The moderate growth momentum of the first half of 2010 is in the
view of the Board likely to be sustained, with an implied growth of
about 4.4% in 2010, strengthening slightly in 2011 (source:
Transition Report, European Bank for Reconstruction and
Development, 17 November 2010). The key risk to a sustained
economic recovery remains the price of oil and other commodities.
Higher oil prices and sufficient liquidity in the banking system,
as well as the fiscal stimulus package being carried over into
2010, will be the main contributing factors to sustaining economic
recovery. Policy-makers are likely to face the challenge of
balancing the need to sustain the still fragile economic recovery
with fiscal consolidation over the medium term.
The return to growth in the Russian economy has helped all of
the Company's investments.
OSG
For the nine months ended 30 September 2010, revenues were
GBP9.8m representing an increase of 23% compared to the prior year
period. September 2010 was a record month in terms of revenues
which were GBP1.2m, up 40% from the prior year period and
representing 9% growth over the previous month.
OSG remains the largest records management company in Russia,
Ukraine and Kazakhstan. OSG is expanding its operations with the
Armenian operation receiving its first boxes under storage
contracts that were recently signed in September 2010. In October
2010, OSG added additional racking in its main Moscow facility in
Lobnya with capacity for approximately an additional 130,000 boxes
which will be utilised in the next few months. The company has also
secured additional space in Moscow for up to 500,000 boxes.
Unistream Bank
Unistream transferred RUR84 billion in the nine months ended 30
September 2010. This reflects a decrease of 2% compared to the
prior year period. Revenues for the same period were RUR1.5
billion, a 10% decrease compared to the prior year period due to
lower commissions being charged as a result of a contraction in the
industry of an estimated 27% in USD terms in 2009 and an increase
in competition.
Unistream continues to be the leading money transfer company in
Russia with c. 20% market share in Russia-outbound remittances as
of Q2 2010. In August 2010 Unistream's volumes grew 10.9% YoY, the
first month of growth since the global financial crisis. In
September 2010 this trend continued with the company transferring
approximately RUR12 billion, a 9.7% YoY growth in volume. Unistream
continues to explore ways to expand its product range and has begun
to grow mobile transfers aggressively with the mobile operators in
Russia. In addition, Unistream launched a loyalty programme in
August 2010 which has been a success and to date 187,000 customers
have been issued with loyalty cards. So far statistics show that on
the cards issued up to the end of September 2010 56% were used
again in October 2010 in money transfer transactions.
Superstroy Superstroy's revenues increased by 13% compared to
the prior year period to RUR4.9 billion for the nine months ended
30 September 2010 and management expects that Superstroy will be
profitable for the year ending 31 December 2010.
Superstroy is still the leading DIY company in the Urals Region
of Russia which has a population of approximately 20 million
people. After a contraction in the DIY market due to the global
financial crisis and a fall in revenues in 2009 of approximately
14%, Superstroy's revenues began to grow again in April 2010. They
grew by 32% YoY in September following growth of 28% YoY in August
and 23% YoY in July. Superstroy is considering growing not only
through new store openings, but also through acquisition.
Flexinvest
Flexinvest's interest and fee income grew 47% compared to the
prior year period and reached GBP746,000 for the nine months ended
30 September 2010.
Flexinvest Bank is a fully licensed retail bank and is a member
of the Russian Government's deposit insurance scheme. Flexinvest
continues to issue mortgage loans to its clients. Given the current
shortage of long term wholesale funding for mortgages, Flexinvest
works with a handful of Russian partner banks for which it writes
mortgages for on-sale to them.
Kreditmart
Kreditmart's broker revenues were GBP424,000 for the nine months
ended 30 September 2010. This represents an increase of 156%
compared to the prior year period, due to the number of approvals
received growing significantly. Kreditmart's interest income from
its loan book earned GBP230,000 over the same period.
Kreditmart has returned to its core business of broking
mortgages now that the mortgage market has begun to grow again.
Government statistics show that the volume of mortgages in Russia
more than doubled in the first seven months of 2010 to RUR192
billion from RUR82 billion over the same period in 2009.
AGM
The Company is holding its AGM at 2.00pm on Friday 3 December
2010 at Trafalgar Court, Admiral Park, St. Peter Port, Guernsey,
GY1 2JA.
Enquiries:
Aurora Russia Limited
James Cook +7 (495) 644 1662
John McRoberts +7 (495) 644 1662
Investec Investment Banking
Patrick Robb +44 (0) 20 7597 4000
Martin Smith +44 (0) 20 7597 4000
Financial Dynamics
Ed Gascoigne-Pees +44 (0) 20 7269 7132
Sue I Ong +44 (0) 203 077 0450
Notes to editors:
Aurora Russia
Aurora Russia floated on the Alternative Investment Market of
the London Stock Exchange on 24 March 2006. The Company has been
established to make equity or equity related investments in small
and mid-sized private Russian companies focused on the financial,
business and consumer services sectors where the Directors of
Aurora Russia believe there is potential for growth together with
viable exit opportunities. The Company provides its investee
companies with the necessary capital to continue to expand and
develop and hands-on operational support to deliver significant
step changes in performance and value creation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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