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UPDATE 1-Sistema Hals swings to '08 loss, porfolio shrinks

Published 04/28/2009, 11:28 AM
Updated 04/28/2009, 11:32 AM
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* Portfolio value falls 46 percent in H2 2008

* Net loss of $381.1 million in 2008 after profit in 2007

(Adds details, comments)

MOSCOW, April 28 (Reuters) - Russian developer Sistema-Hals swung into a net loss in 2008 as the value of its portfolio roughly halved in the final six months of the year and the rouble depreciated, the company said on Tuesday.

Russian construction firms have been hit hard as the country enters its first recession in a decade, with consumer and corporate clients both tightening their belts and banks reluctant to hand out loans for property purchases.

Sistema-Hals said its portfolio had shrunk to $2.05 billion on Dec. 31, 2008 from $3.8 billion on July 1.

However at 46 percent the contraction was less steep than the 60 percent net asset value fall at rival AFI Development.

"The real estate and development industry was one of the sectors worst hit by the global financial crisis which had a negative impact on our financial and operational results in the traditionally strong fourth quarter," Chief Financial Officer Andrei Solovyov said in a statement.

The company posted a net loss of $381.1 million in 2008 after profit of $34.7 million the previous year.

The results were exacerbated by a $138.4 million foreign exchange loss "due to the significant appreciation of the U.S. dollar against the rouble," Sistema-Hals said.

Revenues fell 15 percent to $362 million, while total debt stood at $1.47 billion at the end of 2008.

"Our next immediate priorities are debt restructuring and raising capital to finance the projects under the adjusted production programme," Solovyov said.

Sistema-Hals said operating expenses rose by a quarter to $486.4 million, hit by $25.4 in provisions for the Siemens Tower project and $93.9 million in impairments for real estate investments and "doubtful debts and receivables".

Earlier this month Moscow-based conglomerate Sistema sold a stake in Sistema-Hals to creditor VTB Bank and granted it an option letting it take control, all for less than $2. (Reporting by Yulia Komleva and Melissa Akin, writing by Toni Vorobyova; Editing by David Cowell)

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