Press releases – 2007

Interim results for the 6 months to 30 June 2007

31 Oct 2007

Chagala, the specialist Kazakh real estate developer and operator, is pleased to announce its interim results for the six months to 30 June 2007.

The first quarter of the year showed a slowdown in the influx of personnel involved on the Kashagan oilfield project and this had an effect on occupancy levels in Atyrau. However, demand increased towards the end of the second quarter in which occupancy levels reached their present high levels. In the third quarter, we have already seen a significant increase in gross operating profit in comparison with the first half of 2007 and this trend is expected to be maintained as the various projects ramp-up towards either new or increased production.

Financial Highlights:

• Total revenues increased 8.7% to $10.0m (2006: $9.2m)
  • Room & rent revenue increased 7.6% to $7.6m (2006: $7.1m)
  • Food & beverage revenue increased 12.5% to $2.3m (2006: $2.1m)
• Cost of room & rent revenue increased 28.9% to $1.5m (2006: $1.2m)
• Increase in food & beverage costs of 5.0% to $1.05m (2006: $1.0m)
• Operating profit decreased to $1.7m from $2.8m in 2006

Operational Highlights:

• Acquisition of 30 hectares of land in Atyrau, with an option on an additional 15 hectares, located approximately 15 minutes drive from the city centre. Management intend to hold this land for future development
• Catering and cleaning contract extended with Agip KCO at their 250 person training centre on the outskirts of Atyrau
• Negotiations with two oilfield supply companies to supply two 2000 m sq. warehouses in Aktau
• Construction of the 50 room extension to the Chagala Hotel commenced in August 2007 with the project scheduled for completion in the second half of 2008.

Tim Abson, Chief Executive of Chagala, said:

"Following a slow start to the year demand is picking up and this trend is continuing into the third quarter. Our hotels are now running at over 85% occupancy levels, our 235 apartments are fully let, as are our offices. We believe that we are just at the start of West Kazakhstan's drive towards its economic development and Chagala, with its market leading product and healthy project pipeline, is well positioned to take part in its growth."

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For further information:

The full press release in PDF format