Moscow-focused property developer, RGI International, says new planning laws led to losses in 2011, as it sought to target the residential sector and sell the Tsvetnoy shopping centre.
The group made a pre-tax loss of $55.9m during the year, better than the market expectation of a loss of $92.3m.
The losses are attributed to changes in Moscow government policy, which resulted in delays and reductions in the size of some developments, leading to write-downs.
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The net asset value per share dropped from $4.47 to $3.26 by the year's end.
The firm argues that it is still well placed to add value for shareholders, pointing to $34.5m in pre-sales achieved since October at its big residential development, Microgorod V Lesu, on the outskirts of Moscow
RGI also wants to sell its loss making Tsvetnoy shopping centre and says it expects a transaction to be completed by the end of this year. Losses have been reducing at Tsvetnoy since the middle of 2011.
RGI's Chairman Jacob Kriesler said: "The strategy of shifting the focus to the Moscow region and premium economy residential sector appears correct in both the short and long term. The Company is now receiving a regular cash inflow generated from pre-sales of apartments in Microgorod Phase 1 (and) has construction finance in place."
Shares were up 6.67% at 1.6p by 09:36 on Friday.
BS
