Etalon Reports 4Q and FY 2014 Operating Results

19 January 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 three months and full year ended 31 December 2014, based on management accounts.

4Q 2014 Operating highlights:

  • The number of new contracts in 4Q 2014 increased 30% year-on-year to 2,752
  • New contract sales amounted to 147 thousand sqm and RUB 13.3 billion, year-on-year increases of 34% and 41%, respectively
  • Average down payment reached 83% in the fourth quarter
  • The blended average price per sqm increased 6% year-on-year to RUB 90.5 thousand
  • Average prices for apartments and commercial premises increased 10% year-on-year to RUB 97.5 thousand per sqm, driven by Etalon Group’s increasing share of sales at prime-location projects

 4Q 2014 Operating results

 4Q 20143Q 20142Q 20141Q 20144Q 2013
Number of contracts2,7521,9602,0332,3002,122
New sales, sqm147,042106,03994,934109,060109,797
New sales, mln RUB13,3099,4808,0959,0789,406
Average price, RUB/sqm90,51189,40285,27183,23485,667

Mortgage contract developments

 4Q 20143Q 20142Q 20141Q 20144Q 2013
Share of mortgages23%28%23%17%20%

 

FY 2014 Operating highlights:

  • Deliveries of 580 ths sqm, a new record for Etalon Group in the Company’s more than 27-year history
  • The number of new contracts increased by 31% year-on-year to 9,045
  • New contract sales amounted to 457 thousand sqm and RUB 39.96 billion, year-on-year increases of 28% and 32%, respectively
  • Transfers to customers grew 15% year-on-year to 403 ths sqm in 2014
  • Cash collections in FY 2014 amounted to RUB 35,335 million, an increase of 36% year-on-year
  • Robust cash collections in 2014 helped Etalon Group further strengthen its financial position, with net debt of just RUB 635 million as of 31 December 2014*

 *according to unaudited management accounts

FY 2014 Operating results

 FY 2014FY 2013Change, %
Number of contracts9,0456,93230%
New sales, sqm457,056356,07528%
New sales, mln RUB39,96130,22732%
Cash collections, mln RUB35,33526,07336%
Average price, RUB/sqm87,43184,8893%
Share of mortgages, %22211 p.p.

2H and FY 2014 Deliveries

 2H 20142H 2013Change, %FY 2014FY 2013Change, %
Delivered NSA, ths sqm50444015%58046824%

2H and FY 2014 Transfers to customers

 2H 20142H 2013Change, %FY 2014FY 2013Change, %
Transferred to customers, ths sqm30019355%40335015%

Commenting on the 4Q and FY 2014 operating results, Etalon Group President Viacheslav Zarenkov said:

“I am extremely pleased that Etalon Group successfully delivered 580 ths sqm of net sellable area at its residential real estate projects in 2014, exactly on schedule and in line with guidance for the year.  The Company also outperformed on its ambitious 30% year-on-year growth guidance for sales, with new sales for the year up 32% to RUB 40 billion.

“Etalon Group continued its successful development despite the challenging economic conditions in 2014 thanks to its flexible business model, diversified portfolio of projects focused on Russia’s two most affluent regions, strong financial position and excellent reputation among its customers and other stakeholders.

“The Company owns a high quality land bank, with no need to purchase new plots in order to continue implementation of its construction programme.  We also have a solid inventory of completed housing that can drive sales without extra spending: total inventory of completed and available for sale property stands at 432 ths sqm of NSA, including 220 ths sqm of apartments, as of 31 December 2014.

“Cash collections increased 36% year-on-year to RUB 35,335 million, helping Etalon Group further strengthen its financial position, with net debt as of 31 December 2014 of just RUB 635 million, based on current management estimates.

“Looking ahead to 2015 and beyond we see considerable challenges facing the Russian economy, but I believe that Etalon Group is well positioned to turn this situation into an opportunity for potentially game-changing growth in the medium and long term.”

Conference call and webcast 

Etalon Group will host a conference call for investors and analysts today at 14:00 London time (17:00 Moscow; 09:00 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 FY 2014 operating results, followed by a question and answer session for participants.

The dial-in and online viewing details are below – please note the Moscow dial in below has been updated: 

Webcast-Link:<br/>http://edge.media-server.com/m/p/7w6j35f8

Toll numbers:<br/>+44 20 3037 9374 – London<br/>+7 495 249 9843  – Moscow €¨<br/>+1 646 843 4608 – New York

Toll free numbers:<br/>8 10 8002 4902044 – Russia (from Moscow only)<br/>0808 109 0700 – UK<br/>1 866 966 5335 – USA

Conference Call Password: Etalon

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 ongoing 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 2013, Etalon Group’s portfolio comprised 28 projects, with a total of 3.44 million sqm of unsold net sellable area. 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 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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20 January 2015