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 12 months ended 31 December 2016, based on management accounts.
FY 2016 operating highlights
- Deliveries amounted to 420 ths sqm of NSA, in line with the construction programme
- Transfers to customers amounted to 332 ths sqm, an increase of 5% year-on-year
- The number of new contracts in FY 2016 rose by 22% year-on-year to 9,590
- New contract sales grew 29% and 35% year-on-year to 496,008 sqm and RUB 47,443 million, respectively
- Cash collections for FY 2016 increased 54%, reaching RUB 39,723 million
- Average price per sqm rose by 5% year-on-year to RUB 95,650
FY 2016 Operating Results
|Number of contracts||9,590||7,841||22%|
|New sales, sqm||496,008||385,252||29%|
|New sales, mln RUB||47,443||35,080||35%|
|Cash collections, mln RUB||39,723||25,845||54%|
|Average price, RUB/sqm||95,650||91,057||5%|
|Average price (apartments), RUB/sqm||107,959||102,258||6%|
4Q 2016 operating highlights
- New contract sales amounted to RUB 13,725 million and 153,745 sqm
- The number of new contracts in the fourth quarter was 3,001
- Cash collections increased by 15% year-on-year to RUB 11,123 million
- Average price per sqm was little changed year-on-year at RUB 89,272, while the average price per sqm for apartments increased by 5% year-on-year to RUB 105,928
4Q 2016 Operating Results
|4Q 2016||3Q 2016||2Q 2016||1Q 2016||4Q 2015|
|Number of contracts||3,001||2,069||1,886||2,634||3,457|
|New sales, sqm||153,745||106,661||100,599||135,003||174,767|
|New sales, mln RUB||13,725||10,575||10,284||12,860||15,774|
|Cash collections, mln RUB||11,123||8,744||9,286||10,571||9,632|
|Average price, RUB/sqm||89,272||99,144||102,223||95,254||90,258|
|Average price (apartments), RUB/sqm||105,928||110,413||11,966||105,040||100,502|
Mortgage contract developments
|4Q 2016||3Q 2016||2Q 2016||1Q 2016||4Q 2015|
|Share of mortgages||23%||22%||21%||20%||15%|
Commenting on the FY operating results, Etalon Group President and CEO Viacheslav Zarenkov said:
“I am extremely pleased that Etalon Group booked new sales of 496 ths sqm and RUB 47.4 billion in 2016, surpassing even its upgraded and very ambitious guidance for new contract sales for the year. These numbers represent new records in the Company’s 29-year history.
“We delivered 420 ths sqm of NSA in 2016, exactly in line with our construction programme for the year, and we transferred 332 ths sqm to customers during the year. This will provide a solid base for revenue and net income recognition when we report our FY 2016 financial results.
“Cash collections grew by a strong 54% year-on-year to RUB 39.7 billion, driven by a further improvement in the average down payment, from 62% in 2015 to 68% in 2016.
“One of Etalon Group’s key achievements during 2016 was the successful optimisation of our inventory of completed apartments: we sold nearly 50% of the inventory held as of the end 2015, contracting 155 ths sqm of the 321 ths sqm of the completed apartments on our books as of 31 December 2015. Balanced by additions from new deliveries in 4Q 2016, the total inventory of completed apartments declined by 77 ths sqm, and amounted to 244 ths sqm as of 31 December 2016. Throughout 2017, we will continue to focus on optimising inventory volume.
“The excellent new sales results were supported partly by further diversification of our sales portfolio, with four new projects launched. This included landmark projects in both Moscow (Summer Garden) and St. Petersburg (Galactica). Galactica is off to a very successful start: sales were launched in late October 2016, and the project already had 123 new contracts signed in the fourth quarter.
“Etalon Group also successfully diversified its landbank during the year, with the acquisition of eight new projects in Moscow and St. Petersburg that add a total of 682 ths sqm of new NSA to our portfolio.
“Despite actively acquiring new projects and paying out dividends totalling RUB 1.5 billion in 2016, Etalon Group managed to keep its net debt levels stable year-on-year, at RUB 7.8 billion. The Company has also made tangible progress on further reducing its average cost of borrowing and extending the average duration of financing.
“Looking ahead, I believe we are very well-positioned to deliver another year of ambitious sales growth, with further ramp-up of sales for projects launched during 2016 and new launches due to be announced in 2017. This should enable us to win market share on the Moscow and St. Petersburg residential real estate market, further strengthening our position as one of the leading players in our segment.”
Conference call and webcast
Etalon Group will host a conference call for investors and analysts today at 14:00 London time (17:00 Moscow; 09:00 New York).
On the call, the Etalon Group management team will present the FY 2016 operating results, followed by a question and answer session for participants.
+44 20 3427 1905 – London
+7 495 705 9450 – Moscow
+1 212 444 0412 – New York
Toll free numbers:
0800 279 5004 – UK
8 800 500 9312 – Russia
1 877 280 1254 – USA
Conference ID Code: 9964083
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
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 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 2016, Etalon Group's new contract sales totalled 496 ths sqm, or RUB 47,443 million. Deliveries in 2016 amounted to 420 ths sqm.
Etalon Group Limited's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.