ORLANDO, FL -- (Marketwire) -- 12/05/12 -- UNR Holdings, Inc. (OTCQB: UNRH), ("UNR" or the "Company"), a leading commercial and residential real estate development and construction company operating principally in the city of Moscow and its suburban communities, and also a provider of infrastructure construction services for government oil and gas projects in the Russian Federation, today announced its financial results for the three and nine months ended September 30, 2012.
UNR Holdings CEO Alexey Kim stated, "Our third quarter revenues were disappointing due to what we believe are temporary issues related to our sales channel, but we are very pleased to report another strong quarter of earnings due to favorable pricing and margin trends and the recognition of interest recovered on the Marshal Rybalko project." CEO Kim continued, "Based on current market conditions, we expect to see improved sales momentum in the fourth quarter and we go into 2013 with a very sizable portfolio of completed projects. Our focus will be on converting this inventory to revenues so as to take advantage of continued favorable pricing trends for real estate in Moscow and its environs."
Results of Operations for the Three Months Ended September 30, 2012
Total revenues for the three months ended September 30, 2012 decreased to $18.6 million, or 70%, as compared to $62.6 million for the three months ended September 30, 2011. The decrease was a result of a decline we experienced mostly in our construction and development business in 2012 in connection with the Marshal Rybalko project, offset by an increase in prices for apartments and commercial space.
Cost of Sales
Cost of sales decreased by $37.2 million, or 83%, to $7.7 million for the three months ended September 30, 2012, from $44.9 million for the three months ended September 30, 2011. Cost of sales decreased substantially during the third quarter of 2012 as compared to the comparable quarter in 2011 primarily due to a decrease in revenues from our construction and development business. Cost of Sales percentage decreased primarily due to the increase in prices for apartments and commercial space while costs remained constant.
Selling, General and Administrative Expenses
Selling, general and administrative costs decreased by $0.4 million to approximately $0.8 million for the three months ended September 30, 2012, as compared to approximately $1.1 million for the three months ended September 30, 2011. This was primarily due to decreases in professional fees and administrative overhead.
Income from Operations
Income from operations decreased to approximately $10.0 million for the three months ended September 30, 2012, compared to approximately $16.5 million for the comparable period in 2011, primarily due to decreases in sales offset by decreases in cost of sales percentage during the three month period ended September 30, 2012.
Other income was approximately $5.5 million for the three months ended September 30, 2012, as compared with $0.7 million for the three months ended September 30, 2011, primarily due to an increase in interest income of approximately $4.6 million paid by the Russian Ministry of Defense.
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