Guernsey registered investment company Raven Russia said the market was adapting and stabilising as it reported a strong balance sheet.
For six months ended 30 June, the company said the financial results had met its expectations as net operating and related income reduced to a level commensurate with market rents at $77m, compared to $95.5m in the same period in 2015.
The company, which specialises in commercial warehouse complexes, reported an underlying earnings after tax of $31.5m, as slight fall from $34.5m last year, due to foreign exchange
profits through the income statement and reduced administrative expenses.
Administrative expenses benefitted from a recovery in the bad debt charge, with a credit of $700,000, compared to a charge of $2.5m in 2015, and reduced discretionary employee bonuses.
Basic underlying earnings per share was 4.8 cents, down from 5 cents last year and fully diluted adjusted net asset value per share remained at 70 cents.
Earnings after tax was $8.8m, compared to a loss of $20.6m in 2015. Cash balances at 30 June was $183m down from $202m in 2015, but it increased to $331m on Tuesday following the issue of new convertible preference shares
Occupancy levels at the company's properties remained at 82% over the period. At 30 June, 73% of let warehouse space had US dollar
denominated leases with an average warehouse rental level of $124 per square meter and a weighted average term to maturity of 3.4 years. Rouble denominated or capped leases account for 27% of let space with an average warehouse rent of ₽5,000 per sqm and a weighted average term to maturity of two years.
In July the company raised £109m in a share placing on AIM at a £1 per share, which allowed it to restructure the balance sheet by reducing secured, amortising debt facilities, extend the terms of debt and reduced annual amortisation. The company have agreed terms on seven of our facilities and expect to pre-pay $100m of debt on these facilities by the end of the current quarter.
Chief executive Glyn Hirsch, said: "It may not be the bottom of the market but it certainly feels as though things have stopped deteriorating.
"We are getting used to the new business conditions and the market is adapting and stabilising too. With our considerably strengthened balance sheet we feel well placed for the next phase for the group. Significant progress has been made in restructuring our bank loans and we are actively engaged in finding attractive income producing acquisitions which will further enhance cash flow and returns.
"In the short to medium term, the stabilising Russian economy may have a positive impact. Inflation is generally forecast to fall to around 5% and interest rates below 7% in the next few years. What price a warehouse currently yielding 12% in roubles with annual indexed increases in that scenario? Something to look forward to I hope, as well as the upside potential of any future strengthening of the rouble against the dollar."
Shares in Raven Russia were down 0.07% to 35.72p at 1326 BST.