Etalon Reports 2Q and 1H 2016 Operating Results

12 July 2016

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 six months ended 30 June 2016, based on management accounts.

1H 2016 operating highlights 

  • New contract sales increased by 165% year-on-year to 236 ths sqm, and by 192% year-on-year to RUB 23,143 million
  • The number of new contracts was 4,520, or 143% more than in 1H 2015
  • Deliveries increased 4% year-on-year to 94 ths sqm

1H 2016 deliveries and transfers

 1H 20161H 2015Change, %
Delivered, ths sqm94914%
Transferred to customers, ths sqm129137(6%)
ProjectNSA delivered in 1H 2016, ths sqm
Emerald Hills54
Swallow's Nest21
Moscow Gates19
Total94

1H 2016 operating results

 1H 20161H 2015Change, %
New sales, sqm235,60288,963165%
New sales, mln RUB23,1437,914192%
Number of contracts4,5201,859143%
Average price, RUB/sqm98,23088,95410%

2Q 2016 operating highlights 

  • New contract sales rose by 140% year-on-year to 101 ths sqm, and by 150% year-on-year to RUB 10,284 million 
  • The number of new contracts in the second quarter increased by 127% year-on-year to 1,886
  • Average price per sqm of apartments increased by 7% compared to the first quarter 2016, to RUB 111,966

2Q 2016 quarter-on-quarter comparison

 2Q 20161Q 20164Q 20153Q 20152Q 2015
New sales, sqm100,599135,003174,767121,52241,973
New sales, mln RUB10,28412,86015,77411,3924,110
Number of contracts1,8862,6343,4572,525831
Average price, RUB/sqm102,22395,25490,25893,74697,918
Average price (apartments), RUB/sqm111,966105,040100,502102,417105,297
Cash collections, mln RUB9,28610,5719,6325,7984,412

 Mortgage contract developments 

 2Q 20161Q 20164Q 20153Q 20152Q 2015
Share of mortgages21%20%15%15%20%

Commenting on the 2Q and 1H 2016 operating results, Etalon Group President Viacheslav Zarenkov said:

“Etalon Group has delivered an excellent set of operating results for the first half of 2016, strongly outperforming both our own new sales targets and our record-setting 1H 2014 numbers. Impressive new sales were accompanied by healthy pricing dynamics, with the average price per square metre of apartments in 2Q 2016 up by 11% compared to 4Q 2015.

“I am pleased to note that our customers continue to show strong interest in both new projects and in Etalon Group’s inventory of completed apartments. During 1H 2016, we sold 80 ths sqm of the 321 ths sqm in inventory that we had as of 1 January 2016, which represents 25% turnover in this pool in just six months.

“I think that Etalon Group’s success comes down to two key factors: continuing stabilisation of the market, combined with our ability to quickly grow market share thanks to the Company’s strong reputation and ongoing expansion of our sales portfolio assortment.

“Taken together, this has enabled Etalon Group to generate significant positive cash flow, which was used for the payment of dividends in June 2016 and to reduce our debt load. Based on management accounts, as of 30 June 2016 Etalon Group's net debt was just RUB 5.3 billion, representing a net debt/2015 EBITDA ratio of 0.7.

“Taking advantage of our solid balance sheet and strong sales performance, we announced the acquisition of three new projects during the second quarter. These new residential complexes will further diversify the geography of our sales portfolio. Considering the advanced stages of permitting at these projects, we expect to launch sales within the next 12 months – providing additional support for new sales growth in the medium term.”

Conference call and webcast

Etalon Group will host a conference call for investors and analysts today at 14:00 London time (16:00 Moscow; 09:00 New York).

On the call, Etalon Group President Viacheslav Zarenkov, CEO Anton Evdokimov, and Head of Corporate Investments and Investor Relations Kirill Bagachenko will present the 2Q and 1H 2016 operating results, followed by a question and answer session for participants.

Webcast
http://edge.media-server.com/m/p/mfb2mzq5

Toll numbers:
+44 20 3427 1911 – London
+7 495 545 0588 – Moscow
+1 212 444 0412 – New York

Toll free numbers:
0800 279 5004 – UK
8 800 500 9312 – Russia
1 877 280 2296 – USA

Conference ID Code: 591674

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 
E: info@etalongroup.com 

EM

Sam VanDerlip 
T: +44 7554 993 032
T: +7 499 918 3134
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 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 5 million sqm. Etalon Group's CAGR for deliveries in 2010-2015 was 19%.

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 2015 was RUB 7,397 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 5,000 people, and its nationwide sales and marketing network covers 37 Russian cities.

As of 31 December 2015, Etalon Group's portfolio comprised 28 projects, with a total of 2.72 million sqm of unsold net sellable area. JLL valued this portfolio at RUB 104,384 million.

For the year ended 31 December 2015, Etalon Group's new contract sales totalled 385 ths sqm, or RUB 35,080 million. Deliveries in 2015 totalled 502 ths sqm.

The Company recorded revenue of RUB 42.4 billion and EBITDA of RUB 7.7 billion for the year ended 31 December 2015.

Etalon Group Limited's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.

 


 

13 July 2016