Etalon Group Real Estate Portfolio Market Value Up 17% in 2014

02 March 2015

 

Etalon Group Limited (“Etalon Group” or the “Company”), one of Russia’s largest and longest-established development and construction companies, announces the updated valuation of its portfolio as of 31 December 2014, conducted by Jones Lang LaSalle.

The updated valuation shows the open market value of the Group’s portfolio at RUB 104,286 million, a 17% year-on-year increase.  The open market value per share increased from RUB 305.6 in 2013 to RUB 357.1 in 2014. Details of the updated valuation are available on the Company’s website: www.etalongroup.com/investors/presentations/

The portfolio includes 432 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 220 thousand sqm. Jones Lang LaSalle estimates potential income from sale of these properties at RUB 28,863 million and RUB 22,853 million, respectively.

Etalon Group President Viacheslav Zarenkov said:

“Etalon Group’s portfolio grew in value again in 2014 in rouble terms despite the more complex macro environment that we faced during the year.  I am confident that we are well prepared to adapt to current market conditions, with landbank sufficient to execute our current construction plan, a solid financial position and a significant reserve of completed and available apartments that we can sell without incurring any additional costs. 

“During 2014 we acquired one new project in St. Petersburg, and our architects were able to increase the original conservative NSA estimates for certain projects during the design process.  This helped our landbank volume remain generally stable and sufficient at 3.11 million sqm.

“I would underscore that Etalon Group delivered on its plans on all fronts in 2014: we delivered 580 ths sqm of NSA last year, exactly in line with our construction programme; we launched construction at Samotsvety and Moscow Gates, and plan to complete phase I of both projects in 2015; we completed construction at Rechnoy and Galant; at large ongoing projects like Swallow’s Nest and Emerald Hills we continued to deliver new buildings on schedule.”

Etalon Group CEO Anton Evdokimov said:

“Our portfolio is well diversified, with 29 projects located in Russia’s two most prosperous regions.  This includes future and ongoing projects, as well as completed buildings where we have property for sale. According to the JLL valuation for 2014, the St. Petersburg Metropolitan Area represents 56% of our portfolio value, with the Moscow Metropolitan area making up the remaining 44%.  With net debt of just RUB 635 million as of 31 December 2014*, no immediate need to acquire new projects, and little exposure to fx costs in our construction activities, I believe we are in a good position to act quickly if and when opportunities present themselves in the current macroeconomic situation.”

*based on unaudited management accounts

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. The Company is currently implementing its post-IPO construction programme, which is on track to achieve fourfold growth in construction volumes (from 209 ths sqm to 800 ths 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 cash as of 30 June 2014 was USD 10 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 4,500 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 39.9 billion and EBITDA of RUB 9.4 billion, with an EBITDA margin of 24% for the year ended 31 December 2013.

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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3 March 2015