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 six months ended 30 June 2021.
1H 2021 Financial Highlights:
- Consolidated revenue for 1H 2021 grew by 29% year-on-year and reached a record high of RUB 39.9 billion.
- Consolidated gross profit before purchase price allocation (PPA) for the period increased by 72% to RUB 15.3 billion, while consolidated gross profit rose by 84% to RUB 13.8 billion.
- Pre-PPA gross profit margin increased by 9 p.p. to 38%; gross profit margin grew by 10 p.p. to 35%.
- Pre-PPA earnings before interest, taxes, depreciation and amortisation (EBITDA) for 1H 2021 rose by 125% year-on-year to RUB 11.1 billion, and LTM pre-PPA EBITDA by 108% to RUB 22.7 billion.
- Pre-PPA EBITDA margin increased by 12 p.p. in 1H 2021 to 28%, and LTM pre-PPA EBITDA margin was up by 11 p.p. to 26%.
- 1H 2021 EBITDA reached RUB 9.6 billion, while LTM EBITDA amounted to RUB 18.7 billion.
- Pre-PPA net profit reached RUB 2.5 billion.
- Net profit for the period amounted to RUB 1.3 billion.
- Net corporate debt1 as of 30 June 2021 amounted to RUB 0.6 billion, and the ratio of net corporate debt to LTM pre-PPA EBITDA decreased to 0.03x.
- Operating cash flow less interest paid amounted to minus RUB 5.2 billion.
- The amount of funds in escrow reached RUB 37.9 billion.
Commenting on the 1H 2021 financial results, Etalon Group CEO Gennadiy Shcherbina said:
“We believe that Etalon Group’s successful development is inextricably linked to improved business efficiency. Back in November 2020, as part of our Capital Markets Day, we talked about improving operational efficiency and reducing costs as the Company’s main strategic objectives. Our financial results from the first half of this year clearly show that our hard work has yielded excellent results. Etalon Group achieved its goals with room to spare, having become the leader in terms of gross profit margin dynamics among Russian public developers. Our pre-PPA gross profit margin is already above 38%, compared with the target of 35% established in the Company’s strategy to 2024.
“As a result of our efforts to reduce overhead costs, SG&A as a share of revenue decreased from 14% to 11%. Thanks to the improved efficiency of our operations as well as strict discipline with respect to overhead costs, we were able to greatly improve our EBITDA and net profit in absolute terms. Our pre-PPA EBITDA doubled to RUB 11.1 billion, and pre-PPA net profit increased to RUB 2.5 billion.
“Based on our further efforts to improve business efficiency, our existing accomplishments in terms of profitability growth, as well as the constant demand for Etalon Group properties, we can be confident that our strategy to greatly expand the scale of our business by replenishing our portfolio and entering new regions will ensure stable increases in profits and, as a result, increased investment returns for our shareholders.”
Commenting on the financial results for 1H 2021, Etalon Group Chief Financial Officer Ilya Kosolapov added:
“Thanks to excellent sales dynamics and successful work with the debt portfolio, the Company has improved its financial position considerably. Net corporate debt decreased from RUB 19.6 billion as of 31 December 2020 to RUB 0.6 billion, and the ratio of net corporate debt to pre-PPA EBITDA was close to zero. At the same time, the Company has about RUB 40 billion in its accounts, including short-term deposits for over three months. Nearly RUB 38 billion has been placed in escrow accounts, which provides a sufficient coverage ratio for receiving project financing at a reduced rate. Our comfortable cash position enables us to implement our ambitious growth programme on the scale and at the pace that we determine for ourselves.”
Conference call and webcast
Etalon Group’s management will present the Company’s IFRS financial results for 1H 2021 and operating results for 3Q 2021 during a conference call for investors and analysts scheduled for mid-October. The details and webcast link for the conference call will be provided in advance.
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
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 delivered more than 7.5 million sqm of real estate.
Thanks to its integrated business model, Etalon Group is able to create added value for customers and shareholders at every stage of development, from land plot analysis and acquisition to the operation and maintenance of existing properties. Etalon Group employs over 4,600 people, and its nationwide sales and marketing network covers 59 Russian cities.
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 a 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.
1Net corporate debt does not include project financing and funds in escrow.