DUPD releases weak 2011 financials on land revaluation

DUPD (DUPD LN) released 2011 financials, posting a net loss of USD 77 mln mainly on a USD 58 mln write-down on its land bank. Management decided to discount entirely a land rezoning process, which led to a decrease in the estimated fair value of land to USD 67 mln, slightly above half of its costs. The value of DUPD’s investment properties (excluding its land bank) stood at USD 77 mln as of end-2011, virtually unchanged vs. June 2011, according to CBRE estimates. DUPD’s loss before tax and property write-downs stood at USD 10 mln vs. USD 2 mln in 2010. NAV declined 27% in 2H11 to USD 213 mln but NAV per share was down less significantly (-22% to USD 1.95/share) thanks to a share buyback implemented over 2011. DUPD’s cash balance stood at USD 29 mln as of end-2011, down 25% from June 2011. In its outlook for 2012, management indicated it plans to focus on existing projects (currently 10 projects, four of which are self-funding) rather than potential new investments. In particular, the company plans to start construction of the first tower at its Obolon Residential Tower project and does not rule out attracting a mezzanine investor to fund the initial stages of construction.