Etalon Group Board of Directors Recommends Dividend

13 April 2014

 

 

Etalon Group Limited (“Etalon Group” or the “Company”), one of Russia’s largest and longest established residential real estate developers, is pleased to announce that the Board of Directors of the Company has recommended the payment of a final dividend of USD 0.075 per share for the year ended 31 December 2013.

The Directors of Etalon Group, in accordance with the dividend policy announced in November 2013, are recommending the payment of a final dividend, which will be subject to shareholder approval at the Company’s Annual General Meeting of Shareholders to be held on 11 July 2014. Assuming shareholder approval is received, the dividend will be paid on 30 July 2014.

The ex-dividend date for holders of the Company’s Global Depositary Receipts is 11 June 2014, and the record date is 13 June 2014.

Etalon Group President Viacheslav Zarenkov said: “I am extremely pleased to announce that the Board has recommended the first dividend in Etalon Group’s history. After raising USD 500 mln from investors during Etalon Group’s IPO in April 2011, we used the proceeds to finance our investment programme, which is now producing tangible, positive results.

“The progress Etalon Group has achieved since the IPO is impressive – we increased construction volumes from 209 ths sqm in 2010 to 468 ths sqm in 2013, and are on track to deliver a further 25% year-on-year increase to 584 ths sqm in 2014. We have also purchased new projects, building a landbank that is now sufficient for our construction programme until 2018. Jones Lang LaSalle valued the current projects portfolio at USD 2.7 bln (as of 31 December 2013).

“While we have grown rapidly and acquired numerous new projects since 2011, we have managed to maintain a stable financial position, with just RUB 182 million of net debt as of the end of 2013. This, combined with the successful execution of our investment programme, puts us in a good position to start giving cash back to our investors.”

Etalon Group CEO Anton Evdokimov said: “The dividend policy approved in November 2013 aims to pay 15% to 30% of net profit semi-annually starting from the second half of 2013. The first dividend announced today represents 20% of Etalon Group’s net profit for 2H 2013.”

This and other recent announcements are available on the Etalon Group website: www.etalongroup.com/investors/news/

 Etalon Group IR Team

T: +44 20 8123 1328 <br/>E: info@etalongroup.com

EM

Sam VanDerlip <br/>T: +44 7554 993 032<br/>T: +7 916 306 6112<br/> E: vanderlip@em-comms.com

About Etalon Group

History and Overview

Founded in 1987 by Viacheslav Zarenkov, Etalon Group has become one of Russia's largest residential real estate developers. With a more than 25-year history, the Company has one of the longest and most successful track records in the Russian real estate industry.

Today Etalon Group is a leading player in Russia’s “Golden Triangle” – St Petersburg, Moscow and the greater Moscow area, with a dominant position in the “comfort class” segment. The Company’s strong foothold in these markets is reinforced further by its unique nationwide sales network covering 9 of the 10 wealthiest regions of Russia, and spanning 30 cities in total. The sales network generates up to 30% of Etalon Group’s revenue, and has been an important source of stable demand even throughout the crisis.

Etalon Group is one of the only truly vertically integrated businesses in the Russian real estate sector. The Company does everything from acquiring land to sales and cash collections from its customers, which enables it to maximise margins throughout the value chain, and reduces exposure to cost inflation from external service providers. Etalon Group is a company of scale, with a total of 40 business units that employ over 4,000 people, two strong management companies, five general contractors, 16 subcontractors, a crane company, a brick factory and a nationwide sales network.

Etalon Group’s strong financial position is driven by its effective pre-sales business model. The Company aims to pre-sell 70-90% of all residential space before a building is delivered. It also targets an average down payment of 50%. This allows Etalon Group to finance the construction process using money from customers, as opposed to using the loans or funding from shareholders.

In addition to homebuilding, Etalon Group’s long history and superior quality offering has helped it to become a trusted industrial construction partner for clients like General Motors, Toyota, Ford Motors, Bosch, Siemens, Nissan, Suzuki and Gazprom in northwest Russia.

Since 20 April 2011, Etalon Group Limited has had its GDRs traded on the Main Market of the London Stock Exchange.

Operational and Financial Highlights

As of 31 December 2013, Etalon Group’s portfolio comprised 28 projects, with a total of 3.44 million sqm of unsold net sellable area ("NSA") in the St. Petersburg and Moscow Metropolitan Areas. Jones Lang LaSalle valued this portfolio at USD 2,727 million, a 15% increase in the market value from YE 2012.

For the year ended 31 December 2013, Etalon Group's new contract sales totalled 356,075 sqm, or RUB 30,227 million. Deliveries in 2013 totalled 468 thousand sqm.

The Company recorded revenues of RUB 39.9 billion and EBITDA of RUB 9.4 billion, with an EBITDA margin of 24% for the year ended 31 December 2013, making it one of the most profitable players in the sector.

Etalon Group’s net debt position at 31 December 2013 was RUB 182 million, leaving it well positioned to fund continued dynamic growth.

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14 April 2014