TMM releases 2012 financials

TTM Real Estate Development (TR61 GR) reported USD 29.7 mln in revenue in 2012 (-37% yoy), negative EBITDA of USD 8.3 mln (vs. USD 0.94 mln in 2011) and a net loss of USD 22.2 mln (+14% yoy).

 

The key factor that caused the decline in all P&L items was a 3x yoy fall in revenue from sales of completed property (to USD 11.8 mln). Instead, most of the cash sales of TMM came from the pre-sales of Soniachna Brama, its flagship project, from which most sales were not recognized as revenue in 2012 (since it was in the development phase).

 

The company reportedly increased its advances received from sales of property under development by USD 8.2 mln yoy to USD 45.4 mln as of end-2012. In addition, the company’s revenue from construction services increased 3.3x yoy to USD 7.7 mln in 2012.

 

At the same time, the company was continuing to invest into new properties construction – it increased the book value of properties under development by USD 33.8 mln yoy in 2012 (including USD 13.1 mln of capitalized interests).

 

The balance of properties under development amounted to USD 112.6 mln as of end-2012, of which Soniachna Brama project accounted for USD 87.5 mln (2nd phase commissioned in February 2013, to be fully commissioned in 2014) and the Green Town project accounted for USD 11.9 mln (2nd phase commissioned in February 2013, the third one to be launched later this year).

 

TMM increased its net debt by USD 25.3 mln to USD 155.8 mln over the year. Of the company’s total debt, USD 60.9 mln was classified as short term, but TMM noted that it reached an agreement to extend the repayment of USD 39.5 mln of this amount to 2014.

 

In a separate note, the company stated it boosted sales of real estate properties 35% yoy to about USD 5.2 mln in 1Q13.

 

Alexander Paraschiy: The company’s 2013 P&L should be better as the company has completed the 2nd stages in Soniachna Brama and Green Town, enabling the company to recognize as revenue all pre-sales and sales of residential properties there.

 

On the negative side, the Ukrainian real estate market is far from recovery and TMM was still unable to become a cash-generating company: in 2013, its operating cash flow was at USD -12.1 mln even with improved cash sales of property.

 

On a positive note, the completion of part of TMM’s flagship project should increase sales of residential properties there and we already see some progress reported in 1Q13.