Etalon Reports 2Q and 1H 2015 Operating Results

14 July 2015

 

Etalon Group Limited (“Etalon Group” or the “Company”), one of Russia’s largest and longest-established development and construction companies, announces its unaudited operating results for the six months and three months ended 30 June 2015, based on management accounts.

1H 2015 operating highlights

  • Deliveries increased 19% year-on-year to 91 ths sqm
  • Transfers to customers increased 33% year-on-year to 137 ths sqm
  • The number of new contracts was 1,859 in 1H 2015
  • New contract sales of 88,963 sqm and RUB 7,914 mln
  • Cash collections for 1H 2015 came to RUB 10,415 million

 1H 2015 deliveries and transfers

 1H 20151H 2014Change, %
Delivered, ths sqm917619%
Transferred to customers, ths sqm13710333%

 1H 2015 operating results

 1H 20151H 2014Change, %
New sales, sqm                          88,963203,994(56%)
New sales, mln RUB7,91417,173(54%)
Number of contracts1,8594,333(57%)
Average price, RUB/sqm88,95484,1846%
Cash collections, mln RUB10,41514,835(30%)

2Q 2015 operating highlights

  • The number of new contracts was 831 in 2Q 2015
  • Average price reached RUB 97,918 per sqm, up 15% year-on-year
  • The share of Moscow Metropolitan Area contracts reached 30%, compared to 21% in 2Q 2014
  • Share of mortgage contracts increased from 11% in 1Q to 20% in 2Q as a result of the Russian Federation’s subsidised mortgage programme

 2Q 2015 operating results

 2Q 20151Q 20154Q 20143Q 20142Q 2014
Number of contracts8311,0282,7521,9602,033
New sales, sqm41,97346,990147,042106,03994,934
New sales, mln RUB4,1103,80413,3099,4808,095
Average price (total), RUB/sqm97,91880,94690,51189,40285,271
Average price (apartments), RUB/sqm105,297106,22897,52293,22395,923

 2Q 2015 year-on-year comparison

 2Q 20152Q 2014           Change, %
New sales, sqm                    41,973   94,934(56%) 
New sales, mln RUB 4,110 8,095 (49%)
Number of contracts 831 2,033 (59%)
Average price, RUB/sqm 97,918 85,271 15%
Cash collections, mln RUB 4,412 5,747 (23%)

2Q 2015 new sales dynamics, RUB mln

 20142015Change, %
April                   3,502 1,359(61%)
May2,0221,115(45%)
June2,5711,635(36%)

Mortgage contract developments

 2Q 20151Q 20154Q 20143Q 20142Q 2014
Share of mortgages20%11%23%28%23%

Commenting on the 1H and 2Q 2015 operating results, Etalon Group CEO Anton Evdokimov said:

“Year-on-year comparisons of Etalon Group’s 1H 2015 performance are strongly influenced by a high base effect, combined with the cool-down seen after the end-of-year rush.  At the same time, we are pleased to note performance improving towards the end of 2Q 2015, which is reflected in our monthly new contract sales numbers that were published today. I believe our consumers have adjusted to the new economic situation, and become more confident about the future. We are also pleased to note that market prices remain reasonable, with average prices for Etalon Group apartments in 2Q 2015 stable quarter-on-quarter and up 10% year-on-year, which corresponds with our guidance provided at the beginning of the year.

“Our updated construction programme is on track, with deliveries of 91 ths sqm in 1H 2015, up 19% year-on-year. Transfers to customers increased 33% year-on-year to 137 ths sqm, providing a solid base for 1H 2015 revenue recognition in our upcoming financial results.

“Cash collections, supported by our strong reputation as a reliable developer and our pre-sales business model, came to RUB 10,415 million in 1H 2015, declining 30% year-on-year, which is in line with our expectations for the first half of 2015.

“Our ambitious plan of new launches, which envisages bringing over 700 ths sqm of new NSA onto the market in 2H 2015, is on track, including two new projects – Landyshi in St. Petersburg and Golden Star in Moscow – as well as the next stages of several ongoing projects. We expect this to provide a good impulse for new sales going forward.”

 

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).

On the call, Etalon Group President Viacheslav Zarenkov, CEO Anton Evdokimov, CFO Boris Svetlichny and Head of Corporate Investments and Investor Relations Kirill Bagachenko will present the 2Q and 1H 2015 operating results, followed by a question and answer session for participants.

Webcast<br/>http://edge.media-server.com/m/p/nrev5bw9

Dial-in numbers:

Participants,  Local - London, United Kingdom:

+44(0)20 3427 1919

Participants,  Local - Moscow, Russia:

+7495 213 0977

Participants,  Local - New York, United States of America:

+1646 254 3367

Conference ID Code: 3929087

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: +7 499 918 3134<br/>E: vanderlip@em-comms.com

 

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 27-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.

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15 July 2015