Aurrigo Share Discussion Threads

[wexboy] 14/3/2012 13:34

Hi folks,

Just finished a two part review of all the Russia focused/related closed-end funds out there, including AURR - hope you'll take a look & comment:



Cheers,

Wexboy

[davebowler] 20/12/2011 09:51

Liberum;


Aurora Russia (AURR / BUY) – Results for six months to 30 September; NAV at that time of 70.1p/share

n Net asset value has been reduced, from 83.6p/share at 31 March to 70.1p/share at end of September 2011. This decline in value derives largely from adverse stock market and currency movements. The Russian MICEX index (which is measured in Roubles) comprising over 230 stocks dropped 25%, while there was an approximate 9% favourable movement in the £/RUR exchange rate.

n Cash and cash equivalents at 30 September 2010 were £1.6 million.

n The values of underlying holdings have changed as follows:

n the value of 94.04% of OSG's equity has increased by £1.9 million to £30.7 million, an increase of 7%

n the value of the Company's 24.3% shareholding in SuperStroy has decreased by £9.5 million to £15 million, a decrease of 39%.

n the value of the Company's 26% stake in Unistream Bank has decreased by £3.8 million to £14.9 million, a decrease of 20%; and

n the value of Flexinvest Bank and Kreditmart has decreased by £2.2 million to £16.3 million, a decrease of 12%.

n The Company's strategy remains focused on ensuring optimal exits from our investee companies on a two year horizon.
Liberum View::

n The results release gives further colour on underlying company progress and it is pleasing to see revenue and/or EBITDA growth across three of the four investments. This had already been indicated in a November trading update.

n It is pleasing to see the commitment from the Chairman and refreshed Board to realise value from the portfolio, however we still consider the NAV as relatively high, despite the reductions in valuations. The shares trade at a 54.3% discount to reported NAV, however we take a more cautious approach and have an eNAV of 61.8p/share, to which the shares trade at a 48.2% discount. This still offers considerable value and upside if this NAV is achieved over the next couple of years. We continue to recommend the shares a BUY in light of the value and the realisation strategy.

[davebowler] 21/11/2011 15:53

New monthly update is now out.

[davebowler] 14/10/2011 08:49

Liberum;
Aurora Russia Limited (AURR / BUY) – Trading update

n The company is committed to a realisation strategy. Three of its investments are considered to be IPO candidates and this option is being actively pursued, alongside a potential trade sale of each. An exit strategy has been put in place for each investment on a two year time horizon, with a goal of realising, on balance, at least the current NAV from the portfolio. Recent market turmoil has put most IPOs on hold, although there is significant interest in each of the investee companies and discussions regarding this route to exits continue. The Board believes that the current NAV reflects a realistic assessment of the potential value within the investments that could be realised on a two year timeframe. The Company would expect to have more substantive news in this regard early in the New Year.

n OSG: For the first 8 months of 2011 OSG had 34% growth in revenues from £8.6 million for the same period in 2010 to £11.4 million in August 2011. EBITDA has grown by 30% over the same period from £1 million to £1.3 million. As with many companies in Russia, OSG generally has a stronger second half of the year and management is confident that in 2011 this will remain the case. Net Debt of the company stood at £4.1million. OSG holds the number one position in its industry in Russia, which should increase its attractiveness.

n Superstroy: For the first 8 months of 2011 Superstroy had 32% growth in revenues from RUR4.29 billion for the same period in 2010 to RUR5.66 billion in 2011 with like-for-like growth of 17%. YTD EBITDA is close to zero due to substantial pre-opening costs relating to the opening of its largest hypermarket in April. Adjusted for these pre-opening costs YTD EBITDA was RUR73 million. It is expected that in the September-December period Superstroy will continue generating positive EBITDA.

n Unistream: Unistream's volumes grew 18% in the first 8 months of 2011 YoY from RUR72 billion to RUR84.8 billion. Total revenues were RUR1.47 billion increasing 12% compared to the prior year period. Unistream's operating profit grew by 23% YoY driven by the growth of volumes though its own points of sale which therefore reduced the payment of commissions to counterparties. Growth of income from FX operations was 37% YoY. For the first 8 months of the year the company produced profit before tax of RUR70 million versus an operating loss of RUR40 million in the same period of last year.

n Flexinvest Bank and Kreditmart: As at 31 August 2011, Flexinvest and Kreditmart had total assets of RUR806 million. Of this, the net loan book accounted for RUR334 million and is sufficiently reserved with RUR40 million of provisions. RUR150 million is invested in liquid Russian blue-chip bonds such as Russian Railways, Gazprom, AHML, State owned Rosselkhozbank and City of Moscow yielding on average 5.9% YTM. Aurora Russia is seeking as cost effective a way as possible to exit the loss-making business of Kreditmart and a strategy for exit from Flexinvest will be spelt out to the market early in 2012, once the initial results of the neighborhood bank initiative are known.
Liberum View:

n A positive update from AURR as the bulk of its businesses show revenue and profit growth. Nonetheless the realisation strategy in current markets will be difficult, particularly if management are seeking exits through IPO. The update does state that in tandem to IPO processes, trade sales may also be an option for exit. We would view trade sales as a more natural and lower cost/risk to IPOs as corporates generally have strong balance sheets, immediate cash exits may be achieved and in light of the information the company gives in terms of market leading positions within the industries, the companies would be good platforms for more mature western businesses to expand into Russia and Eastern Europe.

n The shares currently trade on a 57.1% discount to 31 March NAV. We take a more conservative approach to the valuations and reflecting GBP/RUR currency moves, our eNAV is 61.84p/share to which the shares currently trade at a 42.0% discount, which still offers considerable value, and upside if this NAV is achieved over the next couple of years. We continue to recommend the shares a BUY in light of the value and the realisation strategy.

[envirovision] 04/10/2011 09:39

Subject:
Date: Tue 4th Oct 2011 10:00:19
Region:
Market sector:
Company:

DJ UPDATE: Ruble Hits Lowest Level Since Aug 2009 On Oil, Europe Fears


MOSCOW (Dow Jones)--The Russian ruble hit its weakest level versus the dollar since August 2009 on Tuesday, as Europe's debt woes worsened and oil prices slipped toward levels thought to be critical for Russia's markets.

"The level of negativity on markets has grown, and headlining once again is the news from Europe," Gazprombank said in a note to investors.

Fears of a fresh banking crisis in Europe triggered a flight of capital out of emerging markets, dragging the ruble to as low as RUB32.75 versus the dollar on Tuesday, a loss of 0.5% and its lowest level in 25-months. The currency weakened 0.3% against a basket of dollars and euros to RUB37.46, not far from the RUB37.55 level that is expected to trigger central bank interventions.

Russia's benchmark Micex index was down 2.4% at 1312.60 by 0840 GMT after starting the day with gains. The ruble-denominated RTS fell below 1260, its lowest point since May 2010.

Prices for oil--Russia's chief export--tumbled nearly 1% to below $101 a barrel for Brent crude, approaching levels traders say are critical for Russian markets.

"The $100 per barrel level is being watched very closely," said Alexei Borichev, a trader at ING in London. "If Brent breaks below $100 and stays there for more than a few days, investors will start leaving Russia in droves and traders will increase their bets against the ruble and stocks. It will trigger a very negative situation."

Corporate debt repayments may be causing additional pressure on the ruble, traders said. Russian banks and companies are scheduled to pay out some $38 billion in debt by year-end, according to central bank data.

[davebowler] 28/9/2011 15:42

AGM Statement



28 September 2011



Aurora Russia Limited (the "Company") is pleased to announce that at its Annual General Meeting held at 10 a.m. today all resolutions were passed by a significant majority. At the meeting, Geoff Miller, Chairman, gave the following update:



As previously announced, with the re-election of the five Board members who stood for re-election, Ben Morgan will stand down at the end of the Annual General Meeting. I would like to pass on the Board's thanks for his diligent work, particularly over the past, turbulent year for the Company. I am grateful that the Company will retain Ben's counsel as legal adviser as the Company fulfills the strategy of realising value from its investments as laid out in the announcement of 5 August 2011.



Having received the support of shareholders at today's AGM, the Board is now focused on ensuring that the correct structures are in place to deliver value from the Company's assets. The membership of the existing committees of the Board has changed and an additional committee has been formed, to ensure that all aspects of the Company are overseen in a transparent and accountable fashion.



John Whittle will continue to chair the Valuation and Audit Committees, and the membership of these committees will consist of the entire Board except the Chairman of the Board. John will be joining me and the manager in presenting to shareholders on a quarterly basis to ensure that any valuation and accounting issues investors might have are fully addressed.



The Remuneration Committee is now chaired by Tim Slesinger, and the other members of the committee are Gilbert Chalk and John Whittle. In addition the Board has agreed the creation of the Management Engagement Committee, which will be responsible for the management of the Company's relationship with all of its service providers. This committee is chaired by Gilbert Chalk and the membership is all of the Board except John Whittle, because of his previous connections with Close Fund Services.



With the necessary structures in place, the Company is well positioned to optimise value for shareholders from its investments. It is intended that an update on the underlying businesses will be made on 14 October, prior to the Company going into a close period before its interim results are released in mid-December.



For further information please contact:

Aurora Russia

Geoff Miller




Tel: [phone]



Hugh Jonathan

Nominated Adviser



Rupert Krefting / Nathan Brown

Corporate Broking




Tel: [phone]





Tel: [phone]

[davebowler] 22/8/2011 09:23

Liberum.....

n Aurora Russia Limited (AURR / BUY) – Appointment of Timothy Slesinger as a non-exec director and withdrawal of EGM. Tim Slesinger joins the Board with immediate effect and the requisition of an EGM by Mr Slesinger has been withdrawn. Confirmation has also been received that Mr. Peregrine Moncrieffe no longer wishes to be elected as a director. Liberum View: This should be viewed as a positive as Aurora Russia gradually finds buyers for its assets at best value, particularly as Mr. Slesinger has a strong understanding of the OSG business having founded the company in 1998. The Board has changed considerably over the last six months as management representatives have moved off and new non-execs put in place, including a non-exec and fully independent Chairman in Geoff Miller. The shares currently trade at a 54% discount to the stated NAV of 80p/share. The company has said it is realising its assets with cash being returned to investors. While we have a lower eNAV of 69.7p/share, we do still have a BUY recommendation on the shares as the 47% discount to our more conservative valuation is still excessively wide.

[davebowler] 11/7/2011 08:21

Liberum;
Private Equity

n Aurora Russia Limited (AURR / BUY) – Receipt of EGM requisition. Timothy Slesinger, a holder of in excess of 10% of AURR's share capital, has requisitioned an EGM proposing the appointment of Peregrine Moncreiffe and Timothy Slesinger to the Board and for the removal of Dan Koch, Grant Cameron, John Whittle and Alexandr Dumnov as directors of the Company. The Board has responded to the requisition, noting that it has recently replaced John McRoberts and James Cook, who manage the fund, as directors with new non-executive directors. The Board also does not believe that considering Timothy Slesinger holds 12.7% of AURR shares and a Metage Capital fund, of which Peregrine Moncrieffe is a director and manager of, holds 7.2% of AURR shares, the appointments would not be in the interests of shareholders as a whole. Liberum View: Metage has previously engaged with the Board in order to implement new fee terms so that management are suitably incentivised to realise assets in a timely manner and remove the Aurora management directors. These changes have been implemented so it is interesting to see this new EGM requisition. Tim Slesinger was the founder of OSG Records Management, one of AURR's investments. We recently met with management of AURR and they commented much of the portfolio would be in a better position to realise from next year as there would be a further year of profit/revenue growth in a more normal non-recessionary part of the cycle. We think the proposed new directors would look to accelerate realisations as currently the shares trade at a 51% discount 31/03/11 NAV and it is clear the market does not believe this NAV. Management have stressed that underlying companies are valued and audited by two different big 4 accountants, nonetheless we think they could still be on the high side and have a more conservative eNAV of 69.7p/share. The shares still look attractive on this lower eNAV, a 43.5% discount. With further pressure on the Board and the possibility of new shareholder directors replacing incumbent directors we think realisations could be bought forward which should verify valuations.

[davebowler] 24/6/2011 08:39

Liberum view;

Private Equity

n Aurora Russia (AURR / BUY) – FY results to 31/03/11; NAV at that time was 79.9p/share (down 10.2% over the year); Discussions with a number of parties on strategic options for investments continue. AURR will exit Kreditmart as soon as is practicable and the brand and broker operations have been written down to zero as it continues to incur losses, and it is unclear when the mortgage brokerage market will return to a commercially viable level. Kreditmart does hold a small mortgage portfolio and cash which are included in the valuation of the combined Flexinvest / Kreditmart business. The remaining four investments are reportedly in a good position benefitting from the improvement in the Russian market. The company expects them all to grow in value over the next period. OSG was written up by £0.7m to £28.8m (revenues: +31% to £14.8m, EBITDA: +24% to £2.1m); Superstroy was written up by £7.0m to £24.5m (2010 revenues: +30% to RUR6.9bn, EBITDA: RUR241.5m – Q1 2011 revenues up 30% y-on-y); Unistream was written down by £5.7m to £18.7m (2010 revenues: -10% to RUR2.1bn, EBITDA: flat at RUR60m – Q1 2011 operating income is positive +18.6% y-on-y); and Kreditmart/Flexinvest Bank was written down by £3.7m to £18.5m, which includes the write down to zero of the Kreditmart brand. Principal assets as at 31 March 2011 include: 1) a mortgage book net of provisions of approximately £7.7 million yielding 11.9% p.a.; 2) gross cash of £2.7 million; 3) investments in highly liquid fixed income securities of £2.6 million; 4) the premium paid for the banking licence of £2.8 million; and 5) approximately £0.7 million as foreclosed properties held for sale. AURR's total net assets at period end were £89.8m; cash and equivalents were £6.7m, £3.8m of which is uncommitted to cover ongoing expenses. Liberum View: It is disappointing that the Kreditmart broking business has not worked. We wrote on AURR in our May Alternative View note (please contact us if you would like a copy) with the view that AURR's NAV was valuing some of its investments on the high side. We suggested a more conservative eNAV as at 30/09/10 of 69.7p/share. We retain our more conservative eNAV, which had already factored in a significantly lower valuation for the Kreditmart/Flexinvest business. The shares trade at a 40% discount to our eNAV and a 48% discount to the Company's 31/03/11 NAV. The manager is focused on realising value from the Company's investments and is engaged in discussions with a number of parties regarding strategic options for its investments. All net cash proceeds from realisations will be returned to shareholders if the discount to NAV is more than 20%. The annual management fee has been reduced from 2% to 1.5% with effect from 31/03/11 and a new incentive scheme was put in place to align interests better with shareholders. The managers, James Cook and John McRoberts, have stepped down from the Board. Gilbert Chalk and Geoff Miller have been appointed as independent directors – a move we welcome. Considering the significant discount, the realisation strategy and capital returns to shareholders we continue to recommend the shares a BUY.

[davebowler] 23/6/2011 11:56

23 June 2011



Aurora Russia Limited ("AUR" or the "Company")



Directorate Change



Aurora Russia Limited is pleased to announce the appointment of Mr. Gilbert Chalk and Mr. Geoffrey Miller to the board of the Company as Non – executive directors.



Mr. Gilbert Chalk (aged 63) is a British citizen with extensive private equity and banking experience with Baring Private Equity Partners Limited and Hambros Bank Limited. Mr. Chalk also has considerable listed company expertise and is currently a board director of two listed companies, Castle Private Equity AG, a private equity and venture capital fund of funds and Vantage Goldfields Limited, an ASX listed South African Gold Mining Company.



Mr. Geoffrey Miller (aged 45) is a British citizen, resident in Guernsey, with over twenty years of experience in fund management and investment banking. He has particular expertise in Russia and emerging markets, having been Head of Research Marketing for Troika Dialog in Moscow and is an advisory board member of silkroutefinancial, an emerging markets focused investment bank. He is currently an executive director of Greenwich Loan Income Fund, an AIM and CISX listed investment company.



Gilbert Chalk will sit on the valuation and audit committee of AUR and Geoffrey Miller will sit on the valuation committee.



Dan Koch, Non-executive Chairman of AUR said: "We are delighted to be welcoming Gilbert Chalk and Geoff Miller to the Board. Their combined expertise in the private equity, emerging markets and the investment company arena will be a great asset as we continue to seek out opportunities for investment and optimising returns from our investments in the Russian market."





Jack Hickey
Senior Consultant

Financial Dynamics
Holborn Gate, 26 Southampton Buildings
London, WC2A 1PB

D [phone]
M [phone]

[envirovision] 20/6/2011 13:17

gone no explanation, no wish you well, no thank you. .. nothing !

[hectorp] 08/6/2011 11:56

AS questor says above, Russian economy is strongly linked to the commodities, and Bernanke has stopped QE. This suggests base metals prices in particular may take a tumble. Maybe not quite a good to buy yet, but on watch.

[davebowler] 01/6/2011 13:56

The new monthly report is out.

[davebowler] 15/5/2011 10:00

....
but ours is cheaper

[matt123d] 10/5/2011 10:35

Added this morning, bit of a struggle to get stock, bought in several lots.

[empirestate] 10/5/2011 10:26

certainly an impressive set of stats for trading in each of the co's

[hectorp] 10/5/2011 08:41

Nope, failed to buy again, its running away now.

[hectorp] 09/5/2011 17:50

Looking even better...oooh , have to buy... pity I've not..

[hectorp] 06/5/2011 11:06

This is a barely hedged view of their worry about Kreditmark. If only one of the businesses does badly, it will impact on the overall situation. It is a pity as everything else looks very promising and Russian growth has been flagged up to 2.8%, and the strong Rouble is reducing some overheads in 2 of the holdings.
"We continue to monitor the situation at Kreditmart closely and look at options as to how we can deliver the best value for Shareholders".

- fairly priced? and notice , only two sells since today's news and no buys!

[davebowler] 06/5/2011 10:24

Very upbeat about the mix of businesses, and if Kreditmart is the weak link then its the only one of the five, in my view.

[envirovision] 06/5/2011 10:14

That Kreditmart is really struggling, everything else seems ok. Getting a bit boring though, chart does not inspire either.

Do you feel upbeat about this Davebowler, does anyone ?

[davebowler] 06/5/2011 10:08

Note-
We continue to believe in the prospects for a profitable exit from OSG and are actively pursuing options to secure value for Aurora Russia shareholders.

Unistream is leading the way in some of the non-traditional money transfer channels such as transfers via mobile phone.

We continue to monitor the situation at Kreditmart closely and look at options as to how we can deliver the best value for Shareholders.

[davebowler] 06/5/2011 09:45

Aurora Russia Limited ('Aurora Russia' or the 'Company') today announces a trading update ahead of its year-end results for the twelve months ended 31 March 2011 which are expected to be released in June 2011.



Highlights for the period include:



- OSG continues its expansion and the company now has 42 warehouse facilities in 7 countries. Its revenue grew 31% in the year ending 31 March 2011.



- Unistream had c.20% market share in Russia-outbound transfers in 2010. Unistream's volumes grew 23% year-on-year ("YoY") in Q1 2011.



- Superstroy is the leading DIY company in the Urals Region of Russia. It grew its revenues by 30% YoY in Q1 2011 following growth of 17% YoY in 2010. Superstroy has just opened one of the largest DIY hypermarkets in Russia.



- Flexinvest Bank issued a total of RUR 50.3 million in mortgages in 2010. It is expanding its product line to include a credit card product and has received approval from Master Card to issue its cards.



- Kreditmart's broker fees were RUR28 million in 2010, representing a 116% increase YoY. However, the market for broking mortgages remains challenging.





Update on the Russian economy



According to official statistics published by RosStat, Russian GDP grew 4% in 2010. The IMF has recently improved its Russian GDP growth forecast for 2011 to 4.8% compared to its January prediction of 4.5%. Inflation is a concern for policymakers with recent high commodity prices causing a spike in inflation in February 2011 of 9.5% YoY. The rouble hit 27.8 RUR/$ at the end of April (a two and a half year high) appreciating 8.5% since the beginning of 2011. The strength of the rouble is positive for companies such as OSG and Superstroy who have foreign exchange costs for racking and inventories respectively.





Updates on Investee Companies





OSG



OSG changed its year end to 31 March (the same as Aurora's year end) when Aurora purchased a majority stake in the company. Unaudited accounts for the year ending 31 March 2011 show an increase in revenues over the year ending 31 March 2010 of 31% from £11.3 million to £14.8 million. EBITDA grew to £2.1 million up 24% YoY. Q1 2011 saw revenues grow 33% over Q1 2010, with services expanding 50% YoY and storage 17% YoY.



Due to OSG's financial performance it is increasingly able to fund its capital expenditure in Russia and Poland, i.e. its racking, and currently does this through finance leases. As of 31 March 2011, the outstanding balance of finance leases was £2.8 million.



OSG's current storage capacity, once fully racked, allows for a more than 50% increase in the number of boxes stored.



OSG remains the largest records management company in Russia, Ukraine and Kazakhstan. The company continues to expand in the CIS with new warehouses in Yerevan in Armenia and Minsk in Belarus. Currently the company has 42 warehouse facilities in 7 countries. We continue to believe in the prospects for a profitable exit from OSG and are actively pursuing options to secure value for Aurora Russia shareholders.





Unistream Bank



Unistream's year-end unaudited accounts to 31 December 2010 show that the company transferred RUR119.4 billion in 2010, 2% more than in 2009. Revenues for the same period were RUR2.1 billion, a 10% decrease compared to 2009 due to lower commissions being charged as a result of increased competition in the Russian/CIS market. Despite the difficult market conditions, Unistream had similar EBITDA as in 2009. In Q1 2011 Unistream reported a 23% increase in volumes YoY, 16% growth in the number of transactions and a 7% growth in the average transaction value.



Unistream is leading the way in some of the non-traditional money transfer channels such as transfers via mobile phone and through self-operated payment terminals, which, though representing only 3% of the total volume, continue to show strong double-digit growth rates month-over-month. Unistream's loyalty programme, launched in August 2010, continues to show positive results with more than 0.5 million active loyalty cards as of 20 April 2011. So far, statistics show that of the cards issued up to the end of December 2010 c.60% were used at least once by the end of April 2011 in money transfer transactions.



Unistream continues to be the leading money transfer company in Russia with c. 20% market share in Russia-outbound and c.12% in Russia-inbound remittances in 2010. Russia continues to need migrant labour to fill jobs, particularly in construction and we expect future growth in the construction market, spurred on partly by projects related to the winter Olympics in 2014 and the FIFA World Cup in 2018.



The company has recently entered into a strategic partnership with a Russian software development and payment processing company to ensure that it has access to cutting edge technology. This will be instrumental in providing the company and its partners with an integrated solution for payments though the internet, ATM's, payment terminals and a payment kiosk network.



We believe that Unistream has developed a fundamentally sound business which is well positioned to benefit from the continuation of Russian economic growth.



Superstroy


Superstroy's unaudited accounts for the year ending 31 December 2010 showed revenues of RUR6.9 billion, representing an increase of 17% over 2009 revenues. In 2010 the company was profitable with YoY EBITDA margin 1.3 points higher than the previous year. In Q1 2011 revenues grew 30% YoY, reaching RUR1.6 billion with like-for-like revenue growth of 19%.



As an illustration of how the construction industry has turned the corner in the Urals, Superstroy's wholesale revenue showed 66% growth in Q1 2011 over the same period last year when the construction sector was still in crisis.



Superstroy relies on debt financing to fund its working capital and new store openings. As of March 2011, it had net debt of RUR953 million. The increase in debt is driven mostly by pre-opening costs, investment in working capital and capital expenditure related to the new hypermarket opened in Yekaterinburg. The cost of debt has been decreasing steadily and since September 2010 has dropped from 11% to c.9% p.a. in roubles for 1-2 year maturities.



Superstroy is the leading DIY company in the Urals Region of Russia with 47 stores. To strengthen its leadership position in Yekaterinburg, the capital of the Urals, Superstroy opened its largest store to date on 22 April this year bringing its total trade space to c. 110 thousand m2. In the first few days of trading the store has met expectations.



We believe that Superstroy remains well positioned to benefit from the renewed growth of the DIY market and its leading market position.



Flexinvest Bank



As of 31 March 2011, Kreditmart and Flexinvest had aggregated net assets of £17.6 million, roughly in line with £18.0 million as of 30 September 2010.



Flexinvest Bank is a fully licensed retail bank and is a member of the Russian Government's deposit insurance scheme. In 2010 the bank continued to issue residential mortgages with a total volume of RUR50.3 million in new loans. In Q1 2011 Flexinvest issued a total of RUR16 million.



Long term wholesale funding for mortgages continues to be expensive in Russia. For this reason, at the suggestion of the bank's management, the board has decided to expand the business into higher yielding products like credit cards to be financed by short to medium term retail deposits. On 4 May, MasterCard approved the bank as an issuer of its cards. Credit card sales and marketing efforts are scheduled to start in September 2011.



We expect that the potential benefits to Aurora Russia will become discernible as the bank's expanded product offering is rolled out.



Kreditmart



Kreditmart's year-end unaudited accounts for 2010 had broker revenues of RUR28 million. This represents an increase of 116% compared to 2009 due to the number of mortgage approvals received growing to 230 from 42 in 2009. Despite ending 2010 with an operating loss, Kreditmart was able to reduce this by 40% YoY due to growth in revenue and continuous reduction in costs which included a recent closure of non-performing branches. Q1 2011 saw revenue grow 53% on a like-for-like basis (only Moscow operations).



The Agency for Home Mortgage Lending ("AHML") reports that the volume of mortgages in Russia more than doubled in 2010 to RUR379 billion. AHML forecasts 2011 volumes at RUR580-640 billion, up 53%-69% YoY in line with Q1 growth achieved by Kreditmart.



The mortgage broker market however remains challenging, with the vast majority of mortgages being written by the large Russian state banks at very competitive rates leaving a small percentage available for smaller commercial banks and Kreditmart. We continue to monitor the situation at Kreditmart closely and look at options as to how we can deliver the best value for Shareholders.



Board of Directors



The Board is continuing the process of identifying two new independent non executive Directors and intends to be in a position to announce appointments in advance of the Board's approval of the year-end results.



Improved Disclosure



As part of its continued efforts to improve transparency, Aurora Russia will henceforth issue quarterly trading updates as well as interim and final results. These will be issued within 6 weeks of the end of each quarter of Aurora Russia's financial year. In addition, Aurora Russia already releases monthly updates on the Russian economy including news on the Russian private equity market and its investee companies. These can be found on the company's website www.aurorarussia.com.



Outlook



Generally speaking, all our businesses should benefit from the return of growth in the Russian economy, which we hope will provide a sound platform for our management to deliver value to Aurora Russia's shareholders. The Manager continues to have discussions with a number of parties regarding strategic options for its investments and will update shareholders if any of these discussions are concluded.





Enquiries:



Aurora Russia Limited

James Cook [phone]

John McRoberts [phone]

[davebowler] 27/4/2011 15:40

Now out is the new monthly report!

[hoggetwood] 30/3/2011 12:30

Out now is the new monthly report.

[Sorry. Couldn't resist.]