Mongolia Growth Group Ltd. Publishes April 2014 Monthly Letter to Shareholders
Toronto, Ontario (FSCwire)
- Mongolia Growth Group Ltd. (YAK – TSXV and MNGGF – USA), a real
estate investment and development company pursuing the dynamic growth of
the Mongolian economy via ownership of institutional-quality commercial
property assets in the capital city of Ulaanbaatar, Mongolia is pleased
to announce the release of its April 2014 Shareholder Letter.
April 2014 Shareholder Letter
To the Shareholders of Mongolia Growth Group Ltd.,
In April 2014, MGG’s core commercial
property portfolio* experienced a same-store rental increase of 36.8%
relative to April 2013 on properties owned 12 months or longer, as
measured in local currency (Mongolian Togrog). Total billed revenue for
April 2014 was 260.7 million Mongolian Togrog, as compared to 212.5
million Mongolian Togrog in April of 2013 or a 22.7% increase.** The
occupancy rate for the core portfolio in April of 2014 was 95.9%,
including an occupancy rate of 98.1% for core retail properties and an
occupancy rate of 90.5% for core office properties.
Investment Portfolio and Borrowings Update
Investment Portfolio
During the month of April, we continued
to implement our strategy of shifting MGG’s asset mix away from smaller
properties that cost more to maintain and manage, and towards larger
institutional-quality assets that are easier to scale, as we build MGG
into a leading real estate company in Mongolia. During April, we
disposed of one property. Over the course of the first four months of
2014, we have disposed of a total of seven properties and received
commitments to sell an additional two properties.
Borrowings
During April, MGG borrowed money from a
highly respected bank in Mongolia, in order to complete the acquisition
of a distressed asset at a substantial discount to current market
prices. While property companies are usually significantly leveraged for
better economics, we want MGG to retain a conservative balance sheet
with ample liquidity to take advantage of future acquisition
opportunities, like the purchase that was just completed. The company
intends to reduce the borrowings through continued sales of non-core
assets, while in due course, exploring ways to refinance this new loan
with cheaper overseas borrowings.
Mongolian Economic Update
During the first quarter of 2014, Mongolia’s GDP grew 7.4%
Since our previous update to you:
- Mongolian Prime Minister Altankhuyag Norov issued a 100 day, 50-point agenda which promises to boost infrastructure, mining, manufacturing and the development of small and medium-sized businesses
- January to April trade deficit narrowed 82% to US $93.7 million compared with a deficit of US $528.3 million in 2013. Mongolia’s exports increased by 18.1% compared to the prior year
- China has agreed to lend the Mongolian government US $193 million to finance a highway along the Tuul river and Yarmag Bridge
- US-based “Freedom House” NGO released the press freedom index of countries and Mongolia improved 3 ranks compared to last year and is now ranked 74th place out of 197 nations that were ranked
We look forward to updating you again on our progress and new developments in the Mongolian economy next month.
Sincerely,
Harris Kupperman
Executive Chairman
Mongolia Growth Group Ltd.
*The core commercial property portfolio
is defined as those commercial assets that are held for long term
investment and excludes certain development assets which produce minimal
rental revenues, certain assets that are actively being marketed and
all residential properties. Two properties included in the calculation
are accounted for as PP&E assets in the Company’s financial
statements as filed with SEDAR.
**Billed revenue represents the revenue
billed to tenants, net of VAT. It does not take into account bad debt
expense, late payment penalties, interest income or management fee
revenue. Revenue numbers assume that Mandal Daatgal ‘s rental revenue
was attributed to MGG during 2013, as opposed to having it removed on
consolidation, for ease of comparisons.
For further details on the foregoing document, please refer to the Corporation's filing on SEDAR.
For more information on Mongolia Growth Group Ltd., please see our website: www.MongoliaGrowthGroup.com
Or contact:
Genevieve Walkden GWalkden@mongoliagrowthgroup.com
Mongolia Growth Group Ltd. is a
publicly traded and leading property investment and development company
in Ulaanbaatar, Mongolia. MGG owns an extensive property portfolio, in
diversified segments of the property market, with an emphasis on
institutional-grade commercial assets.
MGG undertakes its own property
acquisitions, develops brownfield land assets and repositions outdated
properties, relying on in-house services for all facets of both the
investment portfolio and development side of the business. In addition,
MGG acts as a full-service third party provider for institutional
clients and tailors transactions covering acquisition-to-suit,
build-to-suit, as well as refurbish-to-suit, for property owners and
major tenants.
Forward-looking Information Cautionary Statement
Information and statements contained in
this Letter to Shareholders that are not historical facts are
“forward-looking information” within the meaning of applicable Canadian
securities legislation and involve risks and uncertainties.
Forward-looking information is
necessarily based upon a number of assumptions that, while considered
reasonable by management, are inherently subject to significant
business, economic and competitive uncertainties and contingencies. MGG
cautions the reader that such forward-looking information involves known
and unknown risks, uncertainties and other factors that may cause
actual results and developments to differ materially from those
expressed or implied by such forward-looking information.
Such risks and uncertainties include,
but are not limited to: risks associated with investment in and
redevelopment of real property in Mongolia; competition, financing and
refinancing risks; risks to the consumer mortgage market; a lack of
correlation between disposable income and consumption; risks related to
economic conditions; risks related to mining and mining development in
Mongolia; risks related to regulation of the real estate in Mongolia;
political risk in Mongolia; changes in Mongolian taxation rules;
reliance on key personnel; environmental matters; tenant risks; and
other risk factors more particularly described in in MGG's filings with
Canadian securities regulators, which filings are available at www.sedar.com.
Additional risks and uncertainties not
presently known to MGG or that MGG currently believes to be less
significant may also adversely affect MGG. Forward-looking information
is designed to help you understand management’s current views of our
near and longer term prospects, and it may not be appropriate for other
purposes. MGG does not undertake any obligation to update or revise
forward-looking information, whether as a result of new information,
future events or otherwise, except to the extent legally required.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
public://news_release_pdf/MongoliaJune42014.pdf
Source: Mongolia Growth Group Ltd. (TSX Venture:YAK) http://www.mongoliagrowthgroup.com/
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