Etalon Group Reports 1H 2017 IFRS Results

27 September 2017

 

ETALON GROUP PLC (“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 2017.

1H 2017 Financial Highlights:

  • Consolidated revenue increased by 22% year-on-year (y-o-y) to RUB 24,151 million for 1H 2017 from RUB 19,742 million in 1H 2016
  • Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 33% y-o-y to RUB 2,288 million in 1H 2017 from RUB 1,715 million in 1H 2016
  • Profit for the period amounted to RUB 1,214 million
  • Net debt as of 30 June 2017 was RUB 9,459 million, with net debt/LTM EBITDA stable at 1.2x

Other 1H 2017 Highlights:

  • Deliveries grew by 14% y-o-y to 108 ths sqm in 1H 2017
  • Transfers to customers increased by 48% y-o-y to 191 ths sqm in 1H 2017
  • In June 2017, the Company acquired 2,193,776 of its own Global Depositary Receipts (GDRs) for a total consideration of RUB 468 million under the GDR repurchase programme approved by the Board of Directors

Commenting on the 1H 2017 financial results, Etalon Group President Viacheslav Zarenkov said:

"Etalon Group achieved solid financial performance in the first half of 2017, with revenue up by 22% y-o-y and EBITDA up by 33%. These results were supported by strict cost discipline, which kept general and administrative expenses nearly flat y-o-y.

"Our operating cash flow was slightly negative in 1H 2017, due to cash payments for the acquisition of two attractive business-class projects: on Letnikovskaya street in Moscow and on Aptekarskiy prospekt in St Petersburg. These projects are due to be launched within the next twelve months, and will provide sustainable contributions to Etalon Group’s cash flow over the next several years. Despite the effect of these acquisitions on our cash flow, Etalon Group still ended the period with a solid balance sheet and a net debt/LTM EBITDA ratio of just 1.2x.

"In November the Board of Directors is due to decide on an interim dividend for 1H 2017 based on the recently-upgraded payout range of 40% - 70% of consolidated net income. The upgraded dividend policy was approved in May 2017, when the Board of Directors increased the target payout range from the level of 30% - 50% that had been in place since May 2016.”

Conference call and webcast

Etalon Group’s management team will discuss the Company’s 1H 2017 financial results together with 3Q 2017 operating performance during a conference call and webcast for investors and analysts scheduled for 16 October 2017. Dial in and webcast details will be provided prior to the call.

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 Etalon LenSpetsSMU subsidiaries. With a 30-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 5.5 million sqm.

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 2016 was RUB 7.8 billion.

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 thousand people, and its nationwide sales and marketing network covers 52 Russian cities.

As of 31 December 2016, Etalon Group's portfolio comprised 35 projects, with a total of 2.82 million sqm of unsold net sellable area. JLL valued this portfolio at RUB 115,818 million.

For the year ended 31 December 2016, Etalon Group's new contract sales totalled 496 ths sqm, or RUB 47,443 million. Deliveries in 2016 amounted to 420 ths sqm.

The Company recorded revenue of RUB 49.0 billion and EBITDA of RUB 7.3 billion for the year ended 31 December 2016.

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

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28 September 2017