Etalon Group Reports 1Q 2017 Operating Results

12 April 2017

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 2017, based on management accounts.

1Q 2017 operating highlights

  • New contract sales amounted to RUB 10,248 million and 113,646 sqm
  • The number of new contracts was 2,082
  • Cash collections totalled RUB 9,714 million
  • The average price per sqm was RUB 90,178, up 1% compared to 4Q 2016
  • The average price per sqm for apartments increased by 5% quarter-on-quarter to RUB 111,382

1Q 2017 operating results

 1Q 20174Q 20163Q 20162Q 20161Q 2016
Number of contracts2,0823,0012,0691,8862,634
New sales, sqm113,646153,745106,661100,599135,003
New sales, mln RUB10,24813,72510,57510,28412,860
Cash collections, mln RUB9,71411,1238,7449,28610,571
Average price, RUB/sqm90,17889,27299,144102,22395,254
Average price (apartments), RUB/sqm111,382105,928110,413111,966105,040

1Q 2017 new sales monthly performance

 March 2017February 2017January 2017
New sales, sqm48,00034,76130,884
New sales, mln RUB4,1683,2622,818

Mortgage contract developments

 1Q 20174Q 20163Q 20162Q 20161Q 2016
Share of mortgages22%23%22%21%20%

Commenting on the 1Q 2017 operating results, Etalon Group President and CEO Viacheslav Zarenkov said:

“Our 1Q 2017 operating results are in line with our expectations and represent a solid performance, even in the context of the exceptional numbers that Etalon Group delivered in 1Q 2016. The high base effect created by the first quarter of last year was due to buyers, who had put off purchases during 2015, returning to the market. This was further enhanced by several new projects that we launched during and preceding 1Q 2016.

“Moreover, I would like to highlight steady growth in our 2017 operating performance on a month-by-month basis, which puts us well on track to achieve our full year target of a 20% year-on-year increase in the value of new contracts signed.

“Another important development in 1Q 2017 was the further growth in cash conversion of new sales, with our average down payment reaching 74%.

“The share of mortgage contracts increased year-on-year to 22%, and we expect this to grow further as interest rates continue to decline.

“Looking ahead to the rest of 2017, I expect recently launched projects like Normandy in Moscow and Fusion in St Petersburg, as well as new projects and new buildings at existing projects, will further support our operating performance in 2017.”

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 discuss the Company’s 1Q 2017 operating performance as well as its 2H 2016 financial results.

Toll numbers:

+44 20 3427 1903 – London
+7 495 213 0979 – Moscow
+1 646 254 3363 – New York

Toll free numbers:

0800 279 5004 – UK
8 800 500 9311 – Russia
1877 280 2296 – USA

Conference ID Code: 5743563

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 29-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 5.4 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 5,000 people, and its nationwide sales and marketing network covers 49 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 Limited's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.