Etalon Group Public Company 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 six months ended 30 June 2017, based on management accounts.
2Q 2017 operating highlights
- New contract sales rose by 22% year-on-year to 122 ths sqm, with a total value of RUB 11,346 million
- The number of new contracts in the second quarter increased by 23% year-on-year to 2,321
- Cash collections amounted to RUB 9,283 million
- Average price per sqm was RUB 92,676, up 3% compared to 1Q 2017
- Average down payment increased by 5 p.p. from 74% in the first quarter to 79% in the second quarter
2Q 2017 operating results
| 2Q 2017 | 1Q 2017 | 4Q 2016 | 3Q 2016 | 2Q 2016 | |
|---|---|---|---|---|---|
| New sales, sqm | 122,427 | 113,646 | 153,745 | 106,661 | 100,599 |
| New sales, mln RUB | 11,346 | 10,248 | 13,725 | 10,575 | 10,284 |
| Number of contracts | 2,321 | 2,082 | 3,001 | 2,069 | 1,886 |
| Average price, RUB/sqm | 92,676 | 90,178 | 89,272 | 99,144 | 102,223 |
| Average price (apartments), RUB/sqm | 109,390 | 111,382 | 105,928 | 110,413 | 111,966 |
| Cash collections, mln RUB | 9,283 | 9,714 | 11,123 | 8,744 | 9,286 |
2Q 2017 monthly new sales comparison, mln RUB
| 2017 | 2016 | Change, % | |
|---|---|---|---|
| April | 3,543 | 3,734 | (5%) |
| May | 3,315 | 3,107 | 7% |
| June | 4,489 | 3,443 | 30% |
1H 2017 operating highlights
- Deliveries increased by 15% year-on-year to 108 ths sqm, transfers rose by 48% year-on-year to 191 ths sqm
- New contract sales totalled RUB 21,594 million and 236,073 sqm
- The number of new contracts was 4,403
- Cash collections amounted to RUB 18,997 million
- Net debt stood at RUB 9.5 billion as of 30 June 2017
1H 2017 deliveries and transfers
| 1H 2017 | 1H 2016 | Change, % | |
|---|---|---|---|
| Delivered, ths sqm | 108 | 94 | 15% |
| Transferred to customers, ths sqm | 191 | 129 | 48% |
| Project | NSA delivered in 1H 2017, ths sqm |
|---|---|
| Etalon City | 63 |
| Emerald Hills | 45 |
| Total | 108 |
1H 2017 operating results
| 1H 2017 | 1H 2016 | Change, % | |
|---|---|---|---|
| New sales, sqm | 236,073 | 235,602 | 0% |
| New sales, mln RUB | 21,594 | 23,143 | (7%) |
| Number of contracts | 4,403 | 4,520 | (3%) |
| Cash collections, mln RUB | 18,997 | 19,857 | (4%) |
Mortgage contract developments
| 2Q 2017 | 1Q 2017 | 4Q 2016 | 3Q 2016 | 2Q 2016 | |
|---|---|---|---|---|---|
| Share of mortgages | 33% | 22% | 23% | 22% | 21% |
Commenting on the 2Q and 1H 2017 operating results, Etalon Group President and CEO Viacheslav Zarenkov said:
“I am pleased with the results that Etalon Group delivered in the first half of 2017. Our year-on-year sales performance in 1H 2017 was supported by a very strong second quarter, which helped bring the half-year results on par with the record-setting numbers we saw in the first half of 2016. Based on the month-on-month sales dynamics Etalon Group delivered in April-June 2017, I can confirm we are on a positive course towards achieving our full-year guidance.
“With transfers to customers up 48% year-on-year to 191 ths sqm in 1H 2017, we have a solid base for revenue recognition during the period, which should have a positive effect on our year-on-year financial performance and dividends for the period.
“Average down payment increased to 79% for 2Q 2017, helped by a significant increase in mortgage-financed sales, which reached 33% during the quarter. The growing share of mortgages is an early sign of demand from new customers, for whom mortgage lending has become accessible as a result of falling borrowing rates in Russia, which are now at record low levels.
“The launch of new projects in Moscow and St Petersburg supported strong quarter-on-quarter growth for 2Q 2017, and we expect a further acceleration in sales, with the majority of our 2017 launches due to take place in the second half of the year, including Silver Fountain, our first business-class project in Moscow.”
Conference call and webcast
Etalon Group will host a conference call for investors and analysts today at 14:00 London time (16:00 Moscow; 9:00 New York).
On the call, the Etalon Group management team will present the 2Q and 1H 2017 operating results, followed by a question and answer session for participants.
Webcast
http://edge.media-server.com/m/p/nr6qx7vp
Dial-in numbers:
+44 20 3427 1900 – London
+7 495 705 9450 – Moscow
+1 646 254 3360 – New York
Conference ID Code: 6378845
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 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 5.5 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 2016, Etalon Group's new contract sales totalled 496 ths sqm, or RUB 47,443 million. Deliveries in 2016 amounted to 420 ths sqm.
The Company recorded revenue of RUB 49.0 billion and EBITDA of RUB 7.3 billion for the year ended 31 December 2016.
Etalon Group’s GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.