UNR Holdings Announces Third Quarter 2012 Financial Results
(firmenpresse) - ORLANDO, FL -- (Marketwire) -- 12/05/12 -- UNR Holdings, Inc. (OTCQB: UNRH), ("UNR" or the "Company"), a leading commercial and residential real estate development and construction company operating principally in the city of Moscow and its suburban communities, and also a provider of infrastructure construction services for government oil and gas projects in the Russian Federation, today announced its financial results for the three and nine months ended September 30, 2012.
UNR Holdings CEO Alexey Kim stated, "Our third quarter revenues were disappointing due to what we believe are temporary issues related to our sales channel, but we are very pleased to report another strong quarter of earnings due to favorable pricing and margin trends and the recognition of interest recovered on the Marshal Rybalko project." CEO Kim continued, "Based on current market conditions, we expect to see improved sales momentum in the fourth quarter and we go into 2013 with a very sizable portfolio of completed projects. Our focus will be on converting this inventory to revenues so as to take advantage of continued favorable pricing trends for real estate in Moscow and its environs."
Total revenues for the three months ended September 30, 2012 decreased to $18.6 million, or 70%, as compared to $62.6 million for the three months ended September 30, 2011. The decrease was a result of a decline we experienced mostly in our construction and development business in 2012 in connection with the Marshal Rybalko project, offset by an increase in prices for apartments and commercial space.
Cost of sales decreased by $37.2 million, or 83%, to $7.7 million for the three months ended September 30, 2012, from $44.9 million for the three months ended September 30, 2011. Cost of sales decreased substantially during the third quarter of 2012 as compared to the comparable quarter in 2011 primarily due to a decrease in revenues from our construction and development business. Cost of Sales percentage decreased primarily due to the increase in prices for apartments and commercial space while costs remained constant.
Selling, general and administrative costs decreased by $0.4 million to approximately $0.8 million for the three months ended September 30, 2012, as compared to approximately $1.1 million for the three months ended September 30, 2011. This was primarily due to decreases in professional fees and administrative overhead.
Income from operations decreased to approximately $10.0 million for the three months ended September 30, 2012, compared to approximately $16.5 million for the comparable period in 2011, primarily due to decreases in sales offset by decreases in cost of sales percentage during the three month period ended September 30, 2012.
Other income was approximately $5.5 million for the three months ended September 30, 2012, as compared with $0.7 million for the three months ended September 30, 2011, primarily due to an increase in interest income of approximately $4.6 million paid by the Russian Ministry of Defense.
Provision for income taxes decreased to $3.1 million for the three months ended September 30, 2012 as compared to $3.5 million for the three months ended September 30, 2011. The decrease is primarily due to lower net income during the three months ended September 30, 2012.
Net earnings decreased to $12.4 million for the three months ended September 30, 2012 as compared to $13.9 million for the three months ended September 30, 2011. The Company attributes the decrease in earnings primarily to a decrease in sales offset by an increase in interest income paid by the Russian Ministry of Defense during the three month period ended September 30, 2012.
Total revenues for the nine months ended September 30, 2012 decreased to $69.4 million, or 50%, as compared to $138.0 million for the nine months ended September 30, 2011. The decrease was a result of a decline we experienced mostly in our construction and development business in 2012 due to delayed profit recognition from the Marshal Rybalko project resulting from prolonged litigation with the Russian Ministry of Defense, offset by an increase in prices for apartments and commercial space.
Cost of sales decreased by $63.9 million, or 68%, to $30.0 million for the nine months ended September 30, 2012, from $93.9 million for the nine months ended September 30, 2011. Cost of sales decreased substantially during the first three quarters of 2012 as compared to 2011 primarily due to a decrease in revenues from our construction and development business. Cost of sales percentage decreased primarily due to the increase in prices for apartments and commercial space while costs remained constant, confirming the Company's view that the Russian Real estate market is on track for a sustainable recovery.
Selling, general and administrative costs decreased by $3.2 million to approximately $2.8 million for the nine months ended September 30, 2012, as compared to approximately $6.0 million for the nine months ended September 30, 2011. This was primarily due to decreases in professional fees, administrative overhead and approximately $2.0 million of costs incurred in 2011 in connection with expenses incurred in the Middle East project that was discontinued during 2011.
Income from operations decreased to approximately $36.6 million for the nine months ended September 30, 2012, from income of approximately $38.1 million for the comparable period in 2011, primarily due to decreases in sales offset by decreases in the cost of sales percentage and a decrease in overhead during the nine month period ended September 30, 2012.
Other income was approximately $6.3 million for the nine months ended September 30, 2012, as compared with $1.7 million for the nine months ended September 30, 2011, primarily due to an increase in interest income of approximately $4.6 million paid by the Russian Ministry of Defense ordered by the appeal court in connection with the court ordered settlement.
Provision for income taxes increased to $8.6 million for the nine months ended September 30, 2012 as compared to $7.9 million for the nine months ended September 30, 2011. The increase is primarily due to a higher net income during the nine months ended September 30, 2012.
Net earnings increased to $34.3 million for the nine months ended September 30, 2012 as compared to net earnings of $31.8 million for the nine months ended September 30, 2011. The Company attributes the increase in earnings primarily to an increase in gross profit during the nine month period ended September 30, 2012, a decrease in operating overhead and interest earned from the settlement with the Russian Ministry of Defense.
We had a working capital surplus of approximately $126.2 million and stockholders' equity of approximately $88.3 million as of September 30, 2012. Cash and cash equivalents decreased by approximately $32.8 million for the nine months ended September 30, 2012 from fiscal year end 2011. The decrease is primarily attributable to an increase in inventories of approximately $172.5 million offset by an approximate $97.4 million in accounts payable and $11.2 million from marketable securities.
Trade and other receivables, net of allowances, were $23.8 million at September 30, 2012, compared to approximately $10.2 million at December 31, 2011. The increase is primarily due to a majority of sales of residential units during the first nine months of 2012 having occurred in March 2012 and payments not expected to be received until the fourth quarter. Inventories were $638.1 million at September 30, 2012, as compared to $466.0 million at December 31, 2011, due primarily to the increase in construction during the nine months ended September 30, 2012 to keep up with the increased real estate sales activity in Russia.
Accounts payable were $456.4 million at September 30, 2012, compared to $359.0 million at December 31, 2011. The Company attributes the increase primarily to the increase in inventory to support the Company's increased construction activity offset by payments to creditors made by the Company. Advances from customers were $71.5 million at September 30, 2012 compared to $64.0 million at December 31, 2011. We attribute the increase to an increase in sales activity during the latter part of 2012.
UNR Holdings is a holding company that has a 68% ownership in its subsidiary, 494 UNR. 494 UNR is a diverse construction company with more than 40 years of success serving the Russian construction market. The Company specializes in general and infrastructure construction services, such as designing and building multi-story apartment buildings for middle and upper middle class families, office buildings, highways, bridges, and production of a road base infrastructure construction product. While UNRH is involved in complex construction projects, the Company also assists the Russian government with infrastructure projects for oil and gas corporations, such as GAZPROM and TRANSNEFT. 494 UNR is one of the oldest and most established construction companies located and operating in Moscow and the Moscow area of the Russian Federation.
More detailed information on the housing projects is available at the UNR Holdings corporate website: .
The above news release contains forward-looking statements. The statements contained in this document that are not statements of historical fact, including but not limited to, statements identified by the use of terms such as "anticipate," "appear," "believe," "could," "estimate," "expect," "hope," "indicate," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "will," "would," and other variations or negative expressions of these terms, including statements related to expected market trends and the Company's performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These statements are based on assumptions that management believes are reasonable based on currently available information, and include statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performances, and are subject to a wide range of external factors, uncertainties, business risks, and other risks identified in filings made by the company with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based.
- Financial Tables Follow -
UNR Holdings, Inc.
Serguei Melnik
VP
Phone: 407-210-6541
CCG Investor Relations
David Rudnick
Account Manager
Phone: 1-646-626-4172
Email:
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Datum: 05.12.2012 - 06:01 Uhr
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