TMM reports boosted cash flow from apartment sales, outlines new projects

Обзоры по компаниям и отраслям 23.01.2013 TMM Real Estate (TR61 GR) enjoyed a 24% yoy increase in cash flow from pre-sales of real estate to UAH 201 mln (USD 25 mln) in 2012, the company’s press service reported on Jan. 22. Proceeds from the provision of construction services to third parties rose by more than 6x yoy to UAH 74 mln (USD 9.3 mln) in 2012 and TMM expects that will double in 2013. At a Jan. 20 press conference, the company CEO offered an update on its key project, Sonyachna Brama, whose second phase of 57,000 sq m was earlier scheduled to be commissioned in 2012. Instead, it will be launched in 1Q13, its third phase of 34,000 sq m is targeted for 4Q13, and the last phase for 2014, according to Interfax. TMM is also initiating a new premium-class residential project in Kyiv (the 55,000 sq m Alter Ego project) that will cost USD 56 mln and will be commissioned in late 2014, the company CEO said. Among other plans, TMM is going to participate in tenders for subcontracting work in Ukraine’s nuclear construction projects (after receiving the appropriate license), such as building the shelter above the ruined Chernobyl nuclear power plant and working on a separate centralized storage facility for used nuclear fuel. Alexander Paraschiy: The announced plans look encouraging for TMM stock, which has lost nearly 98% of its record-high price reached in late 2007. The turnaround, however, does not look to be in the near term – the company still depends heavily upon the success of residential projects and mortgage loans are rare in Ukraine now. Moreover, it is not clear, so far, where the company will attract new financing for its new Alter Ego project – cash flow from current projects is apparently not enough for that. We look forward to the completion of Sonyachna Brama’s second phase. Since TMM apparently did not commission any large project in 2012, it should report a significant drop in its reported revenue for 2012. In 1H12, the company posted a 37% yoy decline in revenue to USD 14.3 mln.