Etalon Group PLC (“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 ended 31 March 2018, based on management accounts.
1Q 2018 operating highlights
- New contract sales in roubles rose by 33% year-on-year to RUB 13,605 million
- New contract sales in sqm grew by 18% year-on-year to 134,075 sqm
- The number of new contracts increased by 24% year-on-year to 2,573
- Cash collections increased by 32% year-on-year to RUB 12,778 million
- Average price per sqm was RUB 101,474, up by 13% year-on-year
- Average down payment remained at a high level and amounted to 81%
1Q 2018 operating results
|1Q 2018||1Q 2017||Change, %|
|New sales, sqm||134,075||113,646||18%|
|New sales, mln RUB||13,605||10,248||33%|
|Number of contracts||2,573||2,082||24%|
|Average price, RUB/sqm||101,474||90,178||13%|
|Average price (apartments), RUB/sqm||114,297||111,382||3%|
|Cash collections, mln RUB||12,778||9,714||32%|
Quarterly operating performance
|1Q 2018||4Q 2017||3Q 2017||2Q 2017||1Q 2017|
|New sales, sqm||134,075||162,109||113,979||122,427||113,646|
|New sales, mln RUB||13,605||16,676||11,970||11,346||10,248|
|Number of contracts||2,573||3,182||2,331||2,321||2,082|
|Average price, RUB/sqm||101,474||102,869||105,015||92,676||90,178|
|Average price (apartments), RUB/sqm||114,297||115,806||114,582||109,390||111,382|
|Cash collections, mln RUB||12,778||14,717||12,433||9,283||9,714|
Mortgage contract developments
|1Q 2018||4Q 2017||3Q 2017||2Q 2017||1Q 2017|
|Share of mortgages||40%||41%||35%||33%||22%|
Commenting on the 1Q 2018 operating results, Etalon Group CEO Viacheslav Zarenkov said:
“I am very pleased to report strong operating performance for the first quarter of 2018, with new sales in volume and monetary terms up by 18% and 33% year-on-year, respectively, to 134 ths sqm and RUB 13.6 billion. This impressive performance, combined with a year-on-year increase in prices and continued high levels of down payments, also helped us achieve a 32% year-on-year increase in cash collections.
“Further diversification of our sales portfolio in 1Q 2018 played an important role in our new sales performance, including the January launch of House on Blyukhera in St Petersburg. This new project contributed an impressive 10% in volume terms to our new sales in the first quarter. Another key factor supporting our growth was the hard work of our strong management team, who have successfully completed a transformation of our sales and marketing systems that I believe will make a sustainable contribution to our further growth.
“With the first quarter behind us, I am absolutely confident that we are well on track to deliver, at a minimum, on our 2018 guidance. New sales and cash collections at the end of the quarter amounted to 24% of our annual targets, and we traditionally see stronger sales performance in the second half of the year.”
Etalon Group COO Dmitry Kashinskiy said:
“Etalon Group’s sales volumes in Moscow and St Petersburg grew at a rapid pace in 1Q 2018, enabling us to move towards our goal of increasing our market share in both of our core markets. Our more diversified portfolio of projects, 65% of which are in prime locations of the two Russian capitals, includes a growing share of business class developments that command higher prices.
“This achievement is a result of our fast implementation in 2017 of measures to strengthen our sales and marketing team, and to adapt our product to evolving customer demand. While implementing these internal changes, we have maintained a strict focus on cost controls, which has enabled Etalon Group to make sustainable improvements in the business while avoiding rises in the cost of achieving our results.”
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, the Etalon Group management team will discuss the Company’s 1Q 2018 operating performance together with FY 2017 financial results, followed by a question and answer session for participants.
+44 (0) 330 336 9411 – London
+7 495 916 7309 – Moscow
+1 929 477 0448 – New York
Conference ID Code: 1389801
This and other recent announcements are available on the Etalon Group website:
Etalon Group IR Team
T: +44 20 8123 1328
T: +44 7554 993 032
T: +7 499 918 3134
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 5.8 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 2017 was RUB 9.7 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 2017, Etalon Group's assets comprised 38 projects, with a total of 2.82 million sqm of unsold net sellable area, and a construction and maintenance division. Knight Frank valued the Company’s assets at RUB 135,197 million.
For the year ended 31 December 2017, Etalon Group's new contract sales totalled 512 ths sqm, or RUB 50,240 million. Deliveries in 2017 amounted to 423 ths sqm.
The Company recorded revenue of RUB 70.6 billion and EBITDA of RUB 13.2 billion for the year ended 31 December 2017.
Etalon Group’s GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.