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UPDATE 1-Russia's AFI Development 2008 net loss $108 mln

Published 03/17/2009, 04:52 AM
Updated 03/17/2009, 04:56 AM

* AFI Development NAV $2.53 bln, down 60% vs June 30, 2008

* Economic downturn leads to net loss of $108 million

* Expects Q1 2009 pretax profit around $680 million

* PIK says housing completions down 50 percent in 2008 (Adds detail, PIK comment on housing completions)

MOSCOW, March 17 (Reuters) - Russia's AFI Development posted a net loss of $108 million for 2008, and its net asset value plunged as it wrote $190 million off the value its properties.

"Due to the continued global financial crisis, we witnessed a sharp decrease in property values in the second half of 2008, and as a result have recorded impairments with regard to several properties totalling $190 million," AFI Development said in a statement.

AFI, owned by Israeli billionaire diamond dealer Lev Leviev, slashed its net asset value to $2.53 billion as of Dec. 31, 2008, or $4.82 per share, down 60 percent from June, it said. AFI shares closed at 97.5 cents at Monday's close in London.

The company said it expected to return to the black in the first quarter of 2009, with a pretax profit of around $680 million.

Chief executive Alexander Khaldei told Reuters last week that AFI, which focuses on high-end commercial and residential construction, had scaled back plans to focus on the three key projects that made up the bulk of its NAV.

PIK, a major supplier of mid-range housing in Moscow and the surrounding area, said on Tuesday that housing completions fell by nearly 50 percent last year to 812,000 square metres and it was planning a change of strategy.

"Longer term, the fundamental shortage of suitable residential housing in Russia remains a key driver for future growth for PIK Group," PIK said. "The new operating environment we face clearly has fundamental implications for PIK's future direction." (Reporting by Melissa Akin, editing by Will Waterman)

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