Etalon Group Limited (LSE: ETLN) (the "Company" or the “Group”), one of Russia's largest and longest-established residential realestate developers, announces the updated valuation of its portfolio as of 31 December 2013, conducted by Jones Lang LaSalle.
The updated valuation shows a 15% year-on-year increase in the market value of the Group’s portfolio, reaching a total of USD 2,727 million. Details of the updated valuation are available on the Company’s website: www.etalongroup.com.
The portfolio includes 412 thousand sqm of completed & available for sale property at projects that are completed or still underway, out of which completed & available for sale apartments account for 238 thousand sqm. Jones Lang LaSalle estimates potential income from sale of these properties at USD 795 million and USD 648 million, respectively.
Etalon Group President Viacheslav Zarenkov said:
“Etalon Group’s portfolio grew in value again in 2013, and landbank volume remained generally stable and sufficient at 3.44 million sqm. First, we acquired two new projects during the year – one in Moscow and one in St. Petersburg. Second, we are moving ahead with building the Technopark multifunctional complex, which until now had not been included in the construction plan. Finally, in the process of finalising the parameters of several projects currently at design stage, our architects have managed to increase the total planned NSA from our original conservative estimates. Our current landbank is sufficient to execute our construction plan until 2018.
“I am happy with the significant progress Etalon Group made on nearly all of its projects in 2013: we launched construction at Etalon City as well as Tsar’s Capital and Galant, where we have already delivered several buildings; we completed construction at Letniy and the House on Tukhachevskogo Street; at large ongoing projects like Swallow’s Nest and Emerald Hills we continued to deliver new buildings on schedule.”
Etalon Group CFO Anton Evdokimov said:
“Looking forward, we remain well-positioned to deliver on our planned 24% year-on-year growth in construction volumes for 2014. Etalon Group’s landbank is sufficient until 2018, by which time we plan to have nearly quadrupled our construction volumes compared to 2010. We are well-positioned to achieve these goals, with a diversified portfolio split 58% to 42% between St. Petersburg and the Moscow Metropolitan Area, and with a strong balance sheet that has net debt of just USD 24 million* as of 31 December 2013.”
*based on unaudited management accounts
Etalon Group IR Team
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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 26.9 billion and EBITDA of RUB 6.9 billion, with an EBITDA margin of 26% for the year ended 31 December 2012, making it one of the most profitable players in the sector.
Etalon Group’s net cash position at 31 December 2012 was RUB 890 million, leaving it well positioned to fund continued dynamic growth.
17 February 2014