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 and 12 months ended 31 December 2017, based on management accounts.
4Q 2017 operating highlights
- New contract sales in roubles rose by 22% year-on-year to RUB 16,676 million
- New contract sales in sqm grew by 5% year-on-year to 162,109 sqm
- The number of new contracts increased by 6% year-on-year to 3,182
- Cash collections increased by 32% year-on-year to RUB 14,717 million
- Average price per sqm was RUB 102,869, up 15% year-on-year
4Q 2017 operating results
|4Q 2017||4Q 2016||Change, %|
|New sales, sqm||162,109||153,745||5%|
|New sales, mln RUB||16,676||13,725||22%|
|Number of contracts||3,182||3,001||6%|
|Average price, RUB/sqm||102,869||89,272||15%|
|Average price (apartments), RUB/sqm||115,806||105,928||9%|
|Cash collections, mln RUB||14,717||11,123||32%|
Quarterly operating performance
|4Q 2017||3Q 2017||2Q 2017||1Q 2017||4Q 2016|
|New sales, sqm||162,109||113,979||122,427||113,646||153,745|
|New sales, mln RUB||16,676||11,970||11,346||10,248||13,725|
|Number of contracts||3,182||2,331||2,321||2,082||3,001|
|Average price, RUB/sqm||102,869||105,015||92,676||90,178||89,272|
|Average price (apartments), RUB/sqm||115,806||114,582||109,390||111,382||105,928|
|Cash collections, mln RUB||14,717||12,433||9,283||9,714||11,123|
Mortgage contract developments
|4Q 2017||3Q 2017||2Q 2017||1Q 2017||4Q 2016|
|Share of mortgages||41%||35%||33%||22%||23%|
FY 2017 operating highlights
- Deliveries were in line with the construction programme at 423 ths sqm of NSA
- Transfers to customers amounted to 454 ths sqm, an increase of 37% year-on-year
- The number of contracts in FY 2017 grew by 3% year-on-year and amounted to 9,916
- New contract sales increased by 3% and 6% year-on-year to 512,161 sqm and RUB 50,240 million, respectively
- FY 2017 cash collections increased by 16% year-on-year to RUB 46,147 million
- Average price per sqm rose by 3% year-on-year to RUB 98,094
FY 2017 operating results
|New sales, sqm||512,161||496,008||3%|
|New sales, mln RUB||50,240||47,443||6%|
|Number of contracts||9,916||9,590||3%|
|Average price, RUB/sqm||98,094||95,650||3%|
|Average price (apartments), RUB/sqm||113,160||107,959||5%|
|Cash collections, mln RUB||46,147||39,723||16%|
Commenting on the 4Q 2017 operating results, Etalon Group President Viacheslav Zarenkov said:
“I am pleased to report that, as we had expected, Etalon Group delivered a solid performance in 4Q 2017, and again finished the full year with record-setting results. Our new contract sales in 2017 exceeded RUB 50 billion, while new contract sales in sqm increased to 512 thousand sqm. The fourth quarter results were exceptional and surpassed even 4Q 2015 in terms of new contract sales in roubles.
“Thanks to the drive of the new sales management team who joined the Company in 2017, we were able to achieve sales growth of 18% in rouble terms in the second half of the year. The launch of new projects such as Silver Fountain in Moscow also supported these strong results, leading to a faster pace of both new sales in rouble terms and cash collections.
“Mortgage sales grew strongly and accounted for 41% of new sales in the fourth quarter, in line with declining interest rates on mortgage loans in Russia as a result of the Bank of Russia’s monetary policy.
“The average down-payment in 4Q 2017 was 82%. This high level of down-payments supported a sharp rise in cash collections, which reached RUB 14.7 bln, exceeding the results for the same quarter of the previous year by an impressive 32%.
“I would also like to highlight a number of attractive projects that we acquired in 2017, including the business-class development planned for Letnikovskaya Street in Moscow and two in St Petersburg’s prestigious Petrogradskiy district. At the same time we have kept our debt burden low and maintained our strong financial position, with net debt of RUB 9.7 bln.
“Looking ahead, we anticipate further growth of operational indicators in 2018. We expect deliveries to reach 480 thousand sqm and new sales of around RUB 57 billion, both up 13% on 2017.
“I am confident that we will continue to benefit from our new business-class projects. During 2018, we will increase the share of centrally located, higher-end projects in Etalon Group’s project mix, with the planned launch of sales at a number of attractive projects including on Letnikovskaya Street and those in the Petrogradskiy district of St Petersburg.”
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, the Etalon Group management team will present the 4Q and FY 2017 operating results, followed by a question and answer session for participants.
+44 (0)330 336 9105 – London
+7 495 213 1767 – Moscow
+1 646 828 8143 – New York
Conference ID Code: 7882707
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
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 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 2017, Etalon Group's new contract sales totalled 512 ths sqm, or RUB 50,240 million. Deliveries in 2017 amounted to 423 ths sqm.
Etalon Group’s GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.