Etalon Group Limited (“Etalon Group” or the “Company”), one of Russia’s largest and longest-established development and construction companies, announces its consolidated IFRS financial statements for the six months ended 30 June 2015.
1H 2015 financial highlights:
- Consolidated revenue increased 25% year-on-year (y-o-y) to RUB 18,148 million for 1H 2015 from 14,539 million in 1H 2014
- Revenue from residential real estate development increased 56% y-o-y to RUB 13,857 million, vs. RUB 8,873 million a year earlier
- Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 89% y-o-y to RUB 3,173 million in 1H 2015 from RUB 1,683 million in 1H 2014
- Profit for the period grew 137% y-o-y to RUB 2,193 million, compared to RUB 927 million in 1H 2014
- Net debt as of 30 June 2015 was RUB 6,509 million, with net debt/LTM EBITDA of just 0.5x
Other 2015 highlights
- Deliveries increased 19% y-o-y to 91 ths sqm in 1H 2015
- Transfers to customers increased 33% y-o-y to 137 ths sqm in 1H 2015
- All projects are fully on schedule to meet planned 500 ths sqm of deliveries in 2015
Commenting on the 1H 2015 financial results, Etalon Group CEO Anton Evdokimov said:
“We are pleased to deliver once again a strong set of financial results on the back of solid increases in deliveries and transfers to customers in the first half of 2015. This helped us increase consolidated EBITDA 89% year-on-year to RUB 3,173 million in 1H 2015.
“While other operating results for the first half of the year reflected the significant challenges facing the Russian economy, we have seen pre-sales performance improving in 3Q 2015, on the back of new launches. In line with plans communicated previously, we are bringing a significant volume of new NSA onto the market this year, with the majority of that planned for the fourth quarter, when buyers’ activity is traditionally at its highest. This should provide further stimulus to our 2015 cash collections and support revenue recognition in coming reporting periods.
“Etalon Group’s financial position remains very strong, despite the challenging macroeconomic environment. As anticipated, net debt increased and amounted to RUB 6.5 billion on the back of slower pre-sales in 1H 2015 and cash paid out as dividends. At the same time, we have maintained a very comfortable net debt/LTM EBITDA ratio of just 0.5x, with RUB 12 billion of cash, cash equivalents & bank deposits on our balance sheet.
“Looking forward, we are on track to deliver 500 ths sqm of residential NSA this year, and Etalon Group remains ready to ramp up the pace of construction whenever the market situation allows. Despite the complex macro environment in the first half of the year, Etalon Group has once again shown that its strong reputation, prudent financial policy and focus on the comfort class segment enable the Company to continue its sustainable development in Russia’s unique residential real estate market.”
Etalon Group CFO Boris Svetlichny said:
“Etalon Group delivered solid financial performance in its core business in the first half of 2015. With transfers to customers up by 33% year-on-year, we saw revenue from the residential real estate development segment rise by 56% year-on-year to RUB 13.9 billion, which reflects healthy growth in average prices per square metre.
“Our profitability in 1H 2015 was also supported by good cost control: general and administrative expenses rose by just 3% year-on-year, while selling expenses increased by 7% year-on-year.
“These factors combined contributed to growth in our consolidated profitability margins, with EBITDA margin for 1H 2015 at 17%, compared to 12% a year earlier. Net income margin for the same period was 12%, compared to 6% in 1H 2014.
Conference call and webcast
Etalon Group will host a conference call for investors and analysts today at 15:00 London time (17:00 Moscow; 10:00 New York). The presentation will be available via the webcast, and will be published on Company's website (www.etalongroup.com) prior to the conference call.
On the call, Etalon Group Chairman Viacheslav Zarenkov, CEO Anton Evdokimov, CFO Boris Svetlichny and Head of Corporate Investments and Investor Relations Kirill Bagachenko will present the 1H 2015 financial results, followed by a question and answer session for participants.
The dial-in and online viewing details are below:
+44 20 3427 1907 – London
+7 495 705 9450 – Moscow
+1 646 254 3360 – New York
Toll free numbers:
8 800 500 9311 – Russia (from Moscow only)
0800 279 5736 – UK
1 877 280 1254 – USA
Conference ID Code: 4259011
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
T: +44 7554 993 032
T: +7 499 918 3134
About Etalon Group
Founded in 1987 by Viacheslav Zarenkov, Etalon Group has become one of Russia's largest development and construction corporations. The Company focuses on middle class residential real estate in the Moscow and St. Petersburg metropolitan areas, where it operates through Etalon Invest and LenSpetsSMU subsidiaries. With a 28-year history, Etalon Group has one of the longest and most successful track records in the Russian real estate industry.
Since its inception, Etalon Group has commissioned 4.5 million sqm. Etalon Group's CAGR for deliveries in 2010-2014 was 29%.
Etalon Group's strong reputation among consumers supports its pre-sales business model, which helps the Company to minimise external financing needs for on-going projects while maintaining a secure liquidity position: net debt as of 31 December 2014 was RUB 636 million.
The Company is vertically integrated, which helps it to control costs, quality and timing, as well as to demonstrate best-in-class profitability. Etalon Group employs over 5,000 people, and its nationwide sales and marketing network covers 36 Russian cities.
As of 31 December 2014, Etalon Group's portfolio comprised 29 projects, with a total of 3.11 million sqm of unsold net sellable area. Jones Lang LaSalle valued this portfolio at RUB 104,286 million, a 17% increase in the market value from YE 2013.
For the year ended 31 December 2014, Etalon Group's new contract sales totalled 457 ths sqm, or RUB 39,961 million. Deliveries in 2014 totalled 580 ths sqm.
The Company recorded revenue of RUB 51.5 billion and EBITDA of RUB 10.6 billion, with an EBITDA margin of 21% for the year ended 31 December 2014.
Etalon Group Limited's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.