Etalon Reports 4Q and FY 2015 Operating Results

18 January 2016

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 and 12 months ended 31 December 2015, based on management accounts.

4Q 2015 operating highlights

  • The number of new contracts in the fourth quarter increased 26% year-on-year to 3,457
  • New sales rose to RUB 15,774 mln and 174,767 sqm, both up by 19% year-on-year
  • Average price per sqm was RUB 90,258
  • The share of Moscow Metropolitan Area contracts was 54%
  • The share of mortgage contracts was 15%, unchanged from 3Q 2015

4Q 2015 operating results 

 4Q 20153Q 20152Q 20151Q 20154Q 2014
Number of contracts3,4572,5258311,0282,752
New sales, sqm174,767121,52241,97346,990147,042
New sales, mln RUB15,77411,3924,1103,80413,309
Average price (total), RUB/sqm90,25893,74697,91880,94690,511
Average price (apartments), RUB/sqm100,502102,417105,297106,22897,522

 4Q 2015 year-on-year comparison results

 4Q 20154Q 2014Change, %
Number of contracts3,4572,75226%
New sales, sqm174,767147,04219%
New sales, mln RUB15,77413,30919%
Average price, RUB/sqm90,25890,5110%
Average price (apartments), RUB/sqm100,50297,5223%

FY 2015 operating highlights

  •  The number of new contracts in FY 2015 decreased by 13% year-on-year to 7,841
  • New contract sales declined 12% year-on-year to RUB 35,080 million, and comprised 385,252 sqm
  • Deliveries amounted to 502 ths sqm of NSA, in line with the construction plan
  • Cash collections for FY 2015 came to RUB 25,845 million

FY 2015 operating results

 20152014Change, %
Deliveries, NSA ths sqm 502580 (13%)
Number of contracts 7,841 9,045 (13%)
New sales, sqm385,252457,056(16%)
New sales, mln RUB35,08039,961(12%)
Average price, RUB/sqm91,05787,4314%
Average price (apartments), RUB/sqm102,25895,1287%
Transferred to customers, ths sqm318403(21%)

Mortgage contract developments 

 4Q 20153Q 20152Q 20151Q 20154Q 2014
Share of mortgages15%15%20%11%23%

Commenting on the FY and 4Q 2015 operating results, Etalon Group President Viacheslav Zarenkov said:

“I am very pleased to report that Etalon Group significantly surpassed the FY 2015 guidance that we provided at the beginning of the year: our operating results for 2015 were second only to the record performance we delivered in 2014.  Average prices for apartments increased by 7% year-on-year in RUB terms, and we transferred 318 ths sqm to customers, which will provide a solid base for revenue and net income recognition when we report our FY 2015 financial results.

“Our strong operating performance in 2015 was driven by a number of factors: Etalon Group’s solid reputation and the Company’s leading position in the comfort class segment meant that our sales are more resilient in the turbulent macroeconomic environment, compared to many peers.  These factors were enhanced by the record volume of NSA launched for sales in 2015, including two very successful project starts at Landyshi in St. Petersburg and Golden Star in Moscow.

“Looking ahead, we expect to see Etalon Group’s new sales grow by over 20% in 2016 vs. 2015, driven by continued uplift from the new NSA launched in 2015, as well as further expansion and diversification of our sales portfolio with three completely new projects in 2016:  two in Moscow, plus Galactica in St. Petersburg, the pearl of our portfolio in this city, with total planned NSA of 779 ths sqm on a 38-hectare land plot in a prestigious region near the city centre.

“Etalon Group continues to maintain low net debt levels, and has one of the strongest balance sheets in the industry: net debt at 31 December 2015 was just 7.4 bln RUB.  With an excellent portfolio of current projects and sufficient land bank to implement our construction programme for years to come, we are well-positioned to continue to develop the Company despite the macro headwinds.”

Conference call and webcast

Etalon Group will host a conference call for investors and analysts today at 13:00 London time (16:00 Moscow; 08:00 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 FY 2015 operating results, followed by a question and answer session for participants.


Toll numbers:

+44 20 3427 1917 – London
+7 495 213 0978 – Moscow
+1 646 254 3388 – New York

Toll free numbers:

8 800 500 9312 – Russia
0800 279 5004 – UK
1 877 280 2342 – USA

Conference ID Code: 8461664

This and other recent announcements are available on the Etalon Group website:

Etalon Group IR Team 

T: +44 20 8123 1328 

Sam VanDerlip 
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 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 2014 was RUB 636 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 over 5,000 people, and its nationwide sales and marketing network covers 36 Russian cities.

As of 31 December 2014, Etalon Group's portfolio comprised 29 projects, with a total of 3.11 million sqm of unsold net sellable area. Jones Lang LaSalle valued this portfolio at RUB 104,286 million, a 17% increase in the market value from YE 2013.

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 51.5 billion and EBITDA of RUB 10.6 billion, with an EBITDA margin of 21% for the year ended 31 December 2014.

Etalon Group Limited's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.