Etalon Group Announces 3Q and 9M 2022 Operating Results

26 October 2022

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 nine months ended 30 September 2022, based on management accounts.

9M 2022 operating highlights

  • New contract sales amounted to 210.5 ths sqm and RUB 42.6 bln
  • Cash collections were at RUB 43.8 billion
  • The number of contracts amounted to 4.7 thousand
  • Average price per sqm grew by 8% year-on-year to RUB 202.6 thousand
  • Average price per sqm of apartments in 9M 2022 was RUB 276.9 thousand, up by 20% year-on-year

9M 2022 operating results

 9M 20229M 2021Change, %
New sales, sqm210,461317,410(34%)
New sales, RUB mln42,64859,537(28%)
Number of contracts4,6876,155(24%)
Cash collections, RUB mln43,80760,197(27%)
Average price, RUB/sqm202,641187,5728%
Average price (apartments), RUB/sqm276,864230,50720%
Deliveries, sqm325,969184,09977%

Regional breakdown

 9M 20229M 2021Change, %
Moscow metropolitan area
New sales, sqm92,878180,562(49%)
New sales, RUB mln24,61339,184(37%)
Number of contracts2,0273,508(42%)
Cash collections, RUB mln23,81438,317(38%)
Average price, RUB/sqm265,004217,01322%
Average price (apartments), RUB/sqm349,523259,27935%
St Petersburg
New sales, sqm95,085136,848(31%)
New sales, RUB mln15,90520,353(22%)
Number of contracts2,0762,647(22%)
Cash collections, RUB mln18,28421,879(16%)
Average price, RUB/sqm167,270148,72812%
Average price (apartments), RUB/sqm247,280189,86630%
Other regions
New sales, sqm22,498- 
New sales, RUB mln2,130- 
Number of contracts584- 
Cash collections, RUB mln1,709- 
Average price, RUB/sqm94,686- 
Average price (apartments), RUB/sqm113,472- 

3Q 2022 operating highlights

  • New contract sales amounted to 67.0 ths sqm and RUB 13.3 billion
  • The number of contracts amounted to 1.6 thousand
  • Cash collections totalled RUB 11.2 billion
  • Average price per sqm reached RUB 199.0 thousand, up by 4% year-on-year
  • Average price per sqm of apartments grew by 2% year-on-year to RUB 250.3 thousand

3Q 2022 operating results

 3Q 20223Q 2021Change, %
New sales, sqm66,98696,470(31%)
New sales, RUB mln13,32918,390(28%)
Number of contracts1,5721,869(16%)
Cash collections, RUB mln11,17019,308(42%)
Average price, RUB/sqm198,985190,6334%
Average price (apartments), RUB/sqm250,326244,9282%
Deliveries, sqm91,295181,071(50%)

Regional breakdown

 3Q 20223Q 2021Change, %
Moscow metropolitan area
New sales, sqm25,22849,445(49%)
New sales, RUB mln7,10011,303(37%)
Number of contracts565999(43%)
Cash collections, RUB mln5,40511,832(54%)
Average price, RUB/sqm281,433228,58923%
Average price (apartments), RUB/sqm351,744283,07024%
St Petersburg
New sales, sqm23,76947,026(49%)
New sales, RUB mln4,4827,088(37%)
Number of contracts541870(38%)
Cash collections, RUB mln4,3547,475(42%)
Average price, RUB/sqm188,567150,72425%
Average price (apartments), RUB/sqm258,167201,68628%
Other regions
New sales, sqm17,989- 
New sales, RUB mln1,747- 
Number of contracts466- 
Cash collections, RUB mln1,410- 
Average price, RUB/sqm97,128- 
Average price (apartments), RUB/sqm114,362- 

Monthly sales dynamics in 3Q 2022

 July 2022August 2022September 2022
New sales, sqm17,06626,33523,585
New sales, RUB mln3,1895,2194,922
Cash collections, RUB mln2,9684,0584,144

Quarterly operating performance

 3Q 20222Q 20221Q 20224Q 20213Q 2021
New sales, sqm66,98653,03690,439129,07096,470
New sales, RUB mln13,3299,63819,68124,85118,390
Number of contracts1,5721,2161,8992,4051,869
Cash collections, RUB mln11,17011,40221,23523,89719,308
Average price, RUB/sqm198,985181,732217,611192,538190,633
Average price (apartments), RUB/sqm250,326294,096290,140261,121244,928
Deliveries, sqm91,29558,981175,693237,110181,071

Mortgage contract developments

 3Q 20222Q 20221Q 20224Q 20213Q 2021
Share of mortgages (total)37%25%33%40%39%
Share of mortgages (apartments)55%61%61%70%66%

Commenting on the 3Q and 9M 2022 operating results, Etalon Group CEO Gennadiy Shcherbina said:

“In the first nine months of 2022, Etalon Group sold 210.5 ths sqm for a total of RUB 42.6 billion. Despite the difficult external environment, which led to a sharp increase in the key rate in the first half of the year and a decrease in purchases in late September, we saw a gradual recovery in sales in the last quarter. New contracts sales increased from RUB 3.2 billion in July to RUB 4.9 billion in September. Cash collections have increased month-on-month since June.

“One of the factors supporting sales in the third quarter was the expansion of Etalon Group’s real estate supply. From January to September, we put about 530 ths sqm on sale at our projects in Moscow, St Petersburg and other regions. A large percentage of new sales launches took place in the second and third quarters, thus supporting a gradual recovery of sales from July. At the same time, regional projects accounted for a considerable share of our sales: in 3Q 2022, 27% of our sales volume came from our regional portfolio. Notably, the Green River project, launched in April of this year, accounted for 8% of the total sales volumes for the period from July to September. Projects from our YIT portfolio accounted for nearly 25% of quarterly sales in our traditional and regional markets.

“Taking into account the new environment and the slowdown in demand in late September, we adjusted our launch plan for the 12 months of 2022 to 686 ths sqm. Nonetheless, our flexible business model, stable low-leverage financial position and our current land bank enable us to increase the volume of new supply in the wake of market stabilisation and a recovery in demand.

“In the current environment, our priority is to make our product more affordable, which will enable us to maintain good sales dynamics and expand our presence in regional markets. To improve cost-effectiveness, we are incorporating our own developments and integrating the digital know-how we obtained through the acquisition of YIT Russia. Notably, we continue to work on creating an end-to-end digital architecture for our business; we are taking an automated approach to project design and standardisation, and we are developing state-of-the-art industrial technologies for housing construction. We are now working hard on the development of prefabrication technology and testing individual prefabricated elements in a number of our projects, and we are going to scale up this technology to achieve a leading position in terms of cost-effectiveness.”

This and other recent announcements are available on the Etalon Group website: https://www.etalongroup.com/investor-relations/investor-news/

Contact Information

Etalon Group

IR Team

T: +44 (0) 20 8123 1328
E: ir@etalongroup.com

EM

E: etalon@em-comms.com

About Etalon Group

Founded in 1987, Etalon Group is one of the largest development and construction companies in Russia. The Company focuses on middle class residential real estate in the Moscow and St Petersburg metropolitan areas. In 2021, the Company began a regional expansion programme and has already launched new projects in Omsk, the Novosibirsk region, Ekaterinburg, Tyumen and Kazan. With a 35-year history, Etalon Group has one of the longest and most successful track records in the Russian real estate industry. Since its foundation, Etalon Group has commissioned 7.9 million sqm of real estate.

Thanks to its integrated business model, Etalon Group is able to create added value for customers and shareholders at every stage of development, from land plot analysis and acquisition to the operation and maintenance of existing properties. Etalon Group employs over 4,600 people, and its nationwide sales and marketing network covers 59 Russian cities.

Etalon Group’s assets comprise 27 projects at the design and construction stages, unsold inventory at completed residential complexes and commercial properties, with total unsold NSA of 6.0 mln sqm, as well as a construction and maintenance division. Colliers International valued the Company’s total assets at RUB 270 billion as of 31 December 2021.

In 2021, Etalon Group’s new contract sales totalled 446 ths sqm, or RUB 84.4 billion. The Company’s revenue in 2021 amounted to RUB 87.1 billion, with EBITDA of RUB 17.9 billion.

Etalon Group’s GDRs have traded on the Main Market of the London Stock Exchange since 20 April 2011 and in the Level 1 quotation list of Moscow Exchange since 31 January 2020 under the ticker ETLN.