Etalon Group Limited (“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 2016, based on management accounts.
1Q 2016 operating highlights
- The number of new contracts in the first quarter increased 156% year-on-year to 2,634
- New sales rose to RUB 12,860 million and 135,003 sqm, up by 238% and 187% year-on-year, respectively
- Average price per sqm was RUB 95,254
- The share of Moscow Metropolitan Area contracts was 53%
- The share of mortgage contracts was 20%, compared to 15% in 4Q 2015 and 3Q 2015
1Q 2016 operating results
| 1Q 2016 | 4Q 2015 | 3Q 2015 | 2Q 2015 | 1Q 2015 | |
|---|---|---|---|---|---|
| Number of contracts | 2,634 | 3,457 | 2,525 | 831 | 1,028 |
| New sales, sqm | 135,003 | 174,767 | 121,522 | 41,973 | 46,990 |
| New sales, mln RUB | 12,860 | 15,774 | 11,392 | 4,110 | 3,804 |
| Average price (total), RUB/sqm | 95,254 | 90,258 | 93,746 | 97,918 | 80,946 |
| Average price (apartments), RUB/sqm | 105,040 | 100,502 | 102,417 | 105,297 | 106,228 |
Mortgage contract developments
| 1Q 2016 | 4Q 2015 | 3Q 2015 | 2Q 2015 | 1Q 2015 | |
|---|---|---|---|---|---|
| Share of mortgages | 20% | 15% | 15% | 20% | 11% |
1Q 2016 year-on-year comparison results
| 1Q 2016 | 1Q 2015 | Change, % | |
|---|---|---|---|
| Number of contracts | 2,634 | 1,028 | 156% |
| New sales, sqm | 135,003 | 46,990 | 187% |
| New sales, mln RUB | 12,860 | 3,804 | 238% |
| Average price, RUB/sqm | 95,254 | 80,946 | 18% |
| Average price (apartments), RUB/sqm | 105,040 | 106,228 | (1%) |
Commenting on the 1Q 2016 operating results, Etalon Group President Viacheslav Zarenkov said:
“I am very pleased to report an excellent set of operating results for the first quarter of 2016. We achieved a new record for first-quarter sales in the company’s 28-year history, more than tripling sales year-on-year to RUB 12,860 million, while the average price per square metre rose 18%. Our outstanding first-quarter performance comes on the back of very strong results in the third and fourth quarters of 2015, when we delivered double-digit year-on-year growth in new sales, enabling us to significantly beat our 2015 guidance.
“Etalon Group’s sustained strong performance in the first quarter was due to continued uplift from new NSA launched in 2015, as well as the positive impact of properties launched in early 2016, including the second phase of Etalon City. MMA sales exceeded 50% of new sales for the second quarter in a row, further securing the achievement of Etalon Group’s strategic target of a 50/50 sales balance between its two target markets.
“Our initial guidance for 2016 of more than 20% year-on-year growth in new sales was seen as ambitious when we announced it. However, our first-quarter results make us confident that we will achieve our target.
“Looking ahead to 2016, we have three new and attractive projects scheduled for launch this year. In late March we started pre-sales at Summer Garden in Moscow. Also in March, we received the master plan documentation for Galactica, which will become the crown jewel of our St. Petersburg portfolio. I am confident that these projects will continue to support new sales as we can provide a diversified and attractive offering to our customers – who are from the most resilient segment of the market – in Moscow and St. Petersburg, Russia’s two most affluent cities.”
Conference call and webcast
Etalon Group will host a conference call for investors and analysts today at 15:00 London time (17:00 Moscow; 10:00 New York).
On the call, Etalon Group President Viacheslav Zarenkov, CEO Anton Evdokimov, CFO Boris Svetlichny and Head of Corporate Investments and Investor Relations Kirill Bagachenko will present the 1Q 2016 operating results, followed by a question and answer session for participants.
Webcast
http://edge.media-server.com/m/p/zmv7jfx7
Toll numbers:
+44 20 3427 1907 – London
+7 495 705 9450 – Moscow
+1 212 444 0895 – New York
Toll free numbers:
0800 279 4992 – UK
8 800 500 9312 – Russia
1 877 280 2342 – USA
Conference ID Code: 3644557
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
E: info@etalongroup.com
EM
Sam VanDerlip
T: +44 7554 993 032
T: +7 499 918 3134
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 LenSpetsSMU subsidiaries. With a 28-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 million sqm. Etalon Group's CAGR for deliveries in 2010-2015 was 19%.
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 2015 was RUB 7,397 million.
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 5,000 people, and its nationwide sales and marketing network covers 36 Russian cities.
As of 31 December 2015, Etalon Group's portfolio comprised 28 projects, with a total of 2.72 million sqm of unsold net sellable area. JLL valued this portfolio at RUB 104,384 million.
For the year ended 31 December 2015, Etalon Group's new contract sales totalled 385 ths sqm, or RUB 35,080 million. Deliveries in 2015 totalled 502 ths sqm.
The Company recorded revenue of RUB 42.4 billion and EBITDA of RUB 7.7 billion for the year ended 31 December 2015.
Etalon Group Limited's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.