ETALON GROUP PLC (“Etalon Group” or the “Company”), one of Russia’s largest and longest-established development and construction companies, announces the publication of its audited consolidated IFRS financial statements for the full year ended 31 December 2020.
FY 2020 financial highlights:
- Revenue for 2020 amounted to RUB 78.7 billion.
- Gross profit rose 9% year-on-year and reached RUB 21.9 billion.
- Gross profit margin increased by 4 p.p. year-on-year to 28%.
- Gross profit before purchase price allocation (PPA) increased by 13% to RUB 25.8 billion; pre-PPA gross profit margin increased 6 p.p. year-on-year to 33%.
- Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 48% year-on-year to RUB 12.6 billion; EBITDA margin rose by 6 p.p. year-on-year to to 16%.
- Pre-PPA EBITDA amounted to RUB 16.5 billion, and pre-PPA EBITDA margin increased by 8 p.p. year-on-year to 21%.
- Net corporate debt as of 31 December 2020 was RUB 19.6 billion, and the ratio of net corporate debt to pre-PPA EBITDA decreased to 1.2x.
- Funds in escrow accounts reached RUB 23.6 billion.
- Operating cash flow less interest paid was RUB 3.9 billion. Adjusted for escrow cash collections, operating cash flow flow less interest paid reached RUB 26.8 billion for the period.
Commenting on the FY 2020 financial results, Etalon Group CEO Gennadiy Shcherbina said:
“Thanks to the consistent implementation of our strategy and the concerted efforts of our management team, Etalon Group achieved solid growth in key financial performance metrics in 2020. Despite a slight year-on-year decrease in revenue due to construction restrictions imposed in Moscow in connection with COVID-19, we achieved significant growth across key profit metrics and substantially improved margins.
“Pre-PPA gross profit for the year rose by 13% to a record RUB 25.8 billion. Due to strict controls on cost of sales and a balanced pricing policy, pre-PPA gross profit margin increased by 6 p.p. to 33% and came close to the target of 35% stipulated in Etalon Group’s development strategy. One of the Company’s key priorities remains further reductions in SG&A, which decreased by 19% in absolute terms last year and amounted to 12% of revenue, down from 14% in 2019. This, in turn, resulted in a considerable increase in pre-PPA EBITDA margin by 8 p.p. year-on-year to 21%.
“All of our initiatives and efforts to improve efficiency resulted in significant gains in key metrics: pre-PPA EBITDA rose by 47%, and pre-PPA net profit by 89%.
“Our very strong 2020 results clearly demonstrate the success of our chosen path. We expect the consistent implementation of Etalon Group’s strategic plans to 2024 to further improve efficiency, increase revenue and, as a result, expand the business and strengthen the Company’s market position.”
Commenting on the financial results for 2020, Etalon Group’s Chief Financial Officer Ilya Kosolapov added:
“Despite external circumstances and restrictions that were introduced in the first half of 2020, the Company strengthened its financial position by the end of 2020. Our net corporate debt decreased by 9% to RUB 19.6 billion, and the ratio of net corporate debt to pre-PPA EBITDA decreased to 1.2x from 1.9x at the end of 2019. This performance was the result of the Company being able to generate positive operating cash flow in the amount of RUB 3.9 billion, despite the new regulations on settlements with customers and RUB 23.6 billion being placed in escrow accounts for several years until projects are delivered. Maintaining our stable financial position is especially important for the Company in the context of ambitious plans to replenish the project portfolio while also adhering to Etalon Group's current dividend policy.”
Conference call and webcast
Etalon Group will host a conference call for investors and analysts today at 13:00 London time (16:00 in Moscow; 09:00 in New York).
During the call, Etalon Group’s management will present the Company’s IFRS financial results for FY 2020. Participants will be able to ask questions following the presentation.
Link to the webcast:
+44 2071 928338 – International
+44 844 4819 752 – London
+7 495 249 9851 – Moscow
+1 646 741 3167 – New York
Conference call PIN: 2794984
This and other announcements are available on the Etalon Group website:
T: +44 (0) 20 8123 1328
T.: +44 207 002 7859
About Etalon Group
Founded in 1987, Etalon Group is one of the largest development and construction companies in Russia. 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 7.5 million sqm of real estate.
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 57 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 comprise 20 projects under development, unsold inventory at completed residential complexes and commercial properties, with total unsold NSA of 2.8 million sqm, as well as construction and maintenance division. Colliers International valued the Company’s total assets at RUB 204 billion as of 31 December 2020.
In 2020, Etalon Group’s new contract sales totalled 538 ths sqm, or RUB 79.9 billion. Deliveries in 2020 amounted to 540 ths sqm.
The Company’s revenue in 2020 amounted to RUB 78.7 billion, with EBITDA of RUB 12.6 billion.
Etalon Group’s GDRs have traded on the Main Market of the London Stock Exchange since 20 April 2011 and on the Level 1 quotation list of Moscow Exchange since 31 January 2020 under the ticker ETLN.