ETALON GROUP PLC (“Etalon Group” or the “Company”), one of Russia’s largest and longest-established development and construction companies, announces the publication of its consolidated IFRS financial statements for the first half of the year ended 30 June 2024.

1H 2024 financial highlights:

• Consolidated revenue demonstrated a record increase, rising 71% to RUB 57.4 billion.
• Revenue from the residential development segment in regional markets increased by 148% year-on-year to RUB 8.6 billion.
• Consolidated gross profit before purchase price allocation (PPA) for the period increased by 70% year-on-year to RUB 20.2 billion; PPA-adjusted consolidated gross profit rose 74% year-on-year to RUB 19.6 billion.
• Consolidated gross profit margin reached 34.1% (compared with 33.6% in 1H 2023), and profit margin in the residential development segment was 36%.
• The pre-PPA gross profit margin was 35% and 38% in the core segment of residential development.
• Overhead costs as a percentage of revenue decreased by 5.1 p.p. to 11.6%.
• Pre-PPA EBITDA increased by 109% and amounted to RUB 14.0 billion, and EBITDA margin reached 24% (up 4.4 p.p. year-on-year).
• Pre-PPA net loss amounted to RUB 992 million.
• The ratio of net corporate debt to pre-PPA EBITDA remained 2.4x, in line with the target of below 3x.
• The amount of funds in escrow reached RUB 93 billion, enough to cover 1.3x the current level of project debt.

Commenting on the Company’s 1H 2024 financial results, Etalon Group CFO Ilya Kosolapov said:

“Our financial results for the first half of the year reflect robust sales from recent quarters. We achieved our best-ever half-year revenue performance, both in absolute terms and in terms of growth rate, with a 71% year-on-year increase. Gross profit grew by 74%, and our pre-PPA gross profit margin remained strong at 35%. I would also like to highlight the 148% revenue growth at our regional projects, underscoring the rapid pace of regional expansion.

“Our comprehensive efforts to improve efficiency are delivering outstanding results: overhead costs as a percentage of revenue decreased by more than 5 percentage points, contributing to a more than twofold increase in EBITDA. We aim to reduce this percentage even further, from the current 11.6% to 10%, which should enhance our financial performance.

“Aggressive growth alongside our limited reliance on mortgages gives us significant competitive advantages and is already leading to substantially improved revenue, gross profit and EBITDA dynamics, even in the face of a high key rate and pressure on net profit. We are fully aware of the risks associated with scaling and are closely monitoring on our key leverage ratios and liquidity. Our ratio of net corporate debt to EBITDA remains within the target range of 2x–3x, and we have sufficient funds in escrow to cover project debt, enabling us to secure project financing at preferential rates.

“We have the necessary resilience to navigate this turbulent period for the industry. We expect the considerable scale of our business and revenue to offset the pressure of interest expense, while the anticipated future easing of monetary policy will provide additional support for our financial performance.”

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

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

E: etalon@em-comms.com

Founded in 1987, today Etalon Group is one of the leading nationwide players in Russia’s development and housing construction sector. The Company has been actively developing in eight regions across Russia since 2021, with large-scale projects under way in Omsk, the Novosibirsk region, Ekaterinburg, Tyumen and Kazan. With 37 years of successful operations and ongoing regional expansion, the Company remains one of the largest players in the Russian real estate market. Since its foundation, Etalon Group has delivered 9.0 mln sqm of real estate.

Thanks to its integrated business model, Etalon Group creates 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 nearly 6,000 people, and its nationwide sales network covers 35 regions across Russia.

Etalon Group’s assets comprise 32 projects at the design and construction stages in eight regions, unsold inventory at completed residential complexes and commercial properties, with total unsold NSA of 5.9 mln sqm, as well as a construction and maintenance division. According to Nikoliers, the value of Etalon Group assets as of 31 December 2023 was RUB 303 billion.

In 2023, Etalon Group's new contract sales totalled 547 ths sqm, or RUB 105.6 billion.

The Company's revenue in 2023 amounted to RUB 88.8 billion, with EBITDA of RUB 18.1 billion.

Etalon Group’s GDRs have been traded on Moscow Exchange (ticker ETLN) since February 2020.