ETALON GROUP PLC (“Etalon Group” or the “Company”), one of Russia’s largest and longest-established development and construction companies, announces its unaudited operating results for the nine months and three months ended 30 September 2019, based on management accounts.
9M 2019 operating highlights
- New contract sales increased by 26% year-on-year to RUB 55,833 million and by 10% year-on-year to 458,869 sqm
- The number of contracts grew by 13% year-on-year and amounted to 9,109
- 9M 2019 cash collections rose by 39% year-on-year to RUB 58,923 million
9M 2019 operating results
| 9M 2019 | 9M 2018 | Change, % | |
|---|---|---|---|
| New sales, sqm | 458,869 | 416,640 | 10% |
| New sales, mln RUB | 55,833 | 44,286 | 26% |
| Number of contracts | 9,109 | 8,067 | 13% |
| Cash collections, mln RUB | 58,923 | 42,482 | 39% |
| Deliveries, sqm | 313,573 | 56,270 | 457% |
Regional breakdown
| 9M 2019 | 9M 2018 | Change, % | ||||
|---|---|---|---|---|---|---|
| Moscow metropolitan area | ||||||
| New sales, sqm | 232,475 | 196,640 | 18% | |||
| New sales, mln RUB | 32,529 | 21,466 | 52% | |||
| Number of contracts | 4,452 | 3,818 | 17% | |||
| Cash collections, mln RUB | 35,768 | 20,196 | 77% | |||
| Deliveries, sqm | 250,648 | 0 | - | |||
| St Petersburg | ||||||
| New sales, sqm | 226,394 | 220,000 | 3% | |||
| New sales, mln RUB | 23,303 | 22,820 | 2% | |||
| Number of contracts | 4,657 | 4,249 | 10% | |||
| Cash collections, mln RUB | 23,154 | 22,286 | 4% | |||
| Deliveries, sqm | 62,926 | 56,270 | 12% | |||
3Q 2019 operating highlights
- New contract sales amounted to RUB 17,098 million and 136,658 sqm
- Cash collections rose by 7% year-on-year to RUB 16,114 million
- Average price per sqm was RUB 125,118, up by 15% year-on-year
- Average price per sqm of apartments grew by 22% year-on-year to RUB 153,394
3Q 2019 operating results
| 3Q 2019 | 3Q 2018 | Change, % | |
|---|---|---|---|
| New sales, sqm | 136,658 | 154,097 | (11%) |
| New sales, mln RUB | 17,098 | 16,799 | 2% |
| Number of contracts | 2,579 | 2,962 | (13%) |
| Cash collections, mln RUB | 16,114 | 15,011 | 7% |
| Average price, RUB/sqm | 125,118 | 109,015 | 15% |
| Average price (apartments), RUB/sqm | 153,394 | 125,889 | 22% |
| Deliveries, sqm | 67,230 | 56,270 | 19% |
Regional breakdown
| 3Q 2019 | 3Q 2018 | Change, % | ||
|---|---|---|---|---|
| Moscow metropolitan area | ||||
| New sales, sqm | 71,075 | 77,106 | (8%) | |
| New sales, mln RUB | 10,051 | 8,453 | 19% | |
| Number of contracts | 1,235 | 1,430 | (14%) | |
| Cash collections, mln RUB | 9,738 | 7,312 | 33% | |
| Average price, RUB/sqm | 141,407 | 109,630 | 29% | |
| Average price (apartments), RUB/sqm | 174,306 | 129,233 | 35% | |
| Deliveries, sqm | 4,304 | 0 | - | |
| St Petersburg | ||||
| New sales, sqm | 65,583 | 76,991 | (15%) | |
| New sales, mln RUB | 7,048 | 8,346 | (16%) | |
| Number of contracts | 1,344 | 1,532 | (12%) | |
| Cash collections, mln RUB | 6,376 | 7,699 | (17%) | |
| Average price, RUB/sqm | 107,465 | 108,400 | (1%) | |
| Average price (apartments), RUB/sqm | 131,208 | 122,901 | 7% | |
| Deliveries, sqm | 62,926 | 56,270 | 12% | |
Etalon Group stand-alone 3Q 2019 operating results
| 3Q 2019 | 3Q 2018 | Change, % | |
|---|---|---|---|
| New sales, sqm | 110,354 | 154,097 | (28%) |
| New sales, mln RUB | 12,786 | 16,799 | (24%) |
| Number of contracts | 2,252 | 2,962 | (24%) |
| Cash collections, mln RUB | 12,314 | 15,011 | (18%) |
| Average price, RUB/sqm | 115,864 | 109,015 | 6% |
| Average price (apartments), RUB/sqm | 138,406 | 125,889 | 10% |
| Deliveries, sqm | 62,926 | 56,270 | 12% |
Leader-Invest stand-alone 3Q 2019 operating results
| 3Q 2019 | 3Q 2018 | Change, % | |
|---|---|---|---|
| New sales, sqm | 26,303 | 16,786 | 57% |
| New sales, mln RUB | 4,312 | 3,061 | 41% |
| Number of contracts | 327 | 295 | 11% |
| Cash collections, mln RUB | 3,800 | 2,591 | 47% |
| Average price, RUB/sqm | 163,942 | 182,381 | (10%) |
| Average price (apartments), RUB/sqm | 229,522 | 199,130 | 15% |
| Deliveries, sqm | 4,304 | 9,961 | (57%) |
Mortgage contract developments
| 3Q 2019 | 2Q 2019 | 1Q 2019 | 4Q 2018 | 3Q 2018 | |
|---|---|---|---|---|---|
| Share of mortgages | 36% | 36% | 37% | 41% | 41% |
Commenting on the 9M and 3Q 2019 operating results, Etalon Group Chief Executive Officer Gennadiy Shcherbina said:
“In 9M 2019, Etalon Group once again achieved record results across all operating metrics. New contract sales, including the contribution from Leader-Invest, increased by 13% year-on-year, with more than nine thousand new contracts signed. New sales in volume and monetary terms increased by 10% and 26% year-on-year, respectively, to 459 ths sqm and RUB 56 billion. This result reflects 66% of our annual sales plan in square metres and 70% of the plan in monetary terms. At the same time, cash collections reached a record RUB 59 billion, up by 39% year-on-year, which corresponds to 79% of our annual plan and lays a strong foundation for achieving our goals for 2019.”
Etalon Group Head of Moscow Operations Maxim Berlovich added:
“Real estate sales in the Moscow metropolitan area made a significant contribution to Etalon Group’s results. Through the acquisition of Leader-Invest’s premium projects, sales in monetary terms in Moscow increased by 52% year-on-year to RUB 32.5 billion, and cash collections reached nearly RUB 36 billion, increasing by 77% year-on-year, which confirms our view that this region will be the most promising for development in the years ahead. We anticipate that the transition to a single Etalon Group brand in October 2019 will help to further strengthen the Company's position in Moscow and will provide strong support for operating performance.”
Conference call and webcast
The Company 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, the Etalon Group management team will present the Company’s 9M 2019 operating and 1H 2019 financial results, followed by a question and answer session for participants.
Webcast
https://edge.media-server.com/mmc/p/bghmztuv
Dial-in numbers:
+44 2071 928000 – Standard International
+44 844 571 8892 – London
+7 495 249 9849 – Moscow
+1 631 510 7495 – New York
Conference ID Code:7663978
This and other recent announcements are available on the Etalon Group website: https://www.etalongroup.com/investor-relations/investor-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, Etalon Group is one of Russia’s largest development and construction companies. The Company focuses on middle class residential real estate in the Moscow and St Petersburg metropolitan areas. With a more than 30-year history, Etalon Group has one of the longest and most successful track records in the Russian real estate industry. Since its foundation, Etalon Group has commissioned 6.3 million sqm of real estate.
Etalon Group’s traditionally conservative approach to managing its financial position, solid cash generation and strict working capital management support a secure liquidity position: net cash as of 31 December 2018 was RUB 2.2 billion.
The Company is vertically integrated, which helps it to control costs, quality and timing, as well as maintain best-in-class profitability. Etalon Group employs over 5,000 people, and its nationwide sales and marketing network covers 58 Russian cities.
In 2019, Etalon Group acquired and consolidated 100% in Leader-Invest, one of Moscow’s largest residential developers by size of land bank and number of projects currently available for sale.
Etalon Group’s total assets, including the aforementioned consolidation and 100% ownership of ZIL-Yug project, comprise 53 projects under development, completed residential and commercial properties, as well as a construction and maintenance division, with total unsold NSA of 4.0 million sqm. Knight Frank valued the Company’s total assets at RUB 206,071 million as of 31 December 2018.
For the year ended 31 December 2018, Etalon Group’s new contract sales totalled 628 ths sqm, or RUB 68,731 million. Deliveries in 2018 amounted to 479 ths sqm.
The Company recorded revenue of RUB 72.3 billion and EBITDA of RUB 5.7 billion for the year ended 31 December 2018.
Etalon Group’s GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.