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RNS Number : 2696M
Etalon Group Limited
15 July 2014
15 July 2014
Etalon Reports 1H 2014 Operating Results
Etalon Group Limited ("Etalon Group" or the "Company"), one of Russia's
largest and longest established residential real estate developers, announces
its unaudited operating results for the three months and half year ended 30
June 2014, based on management accounts.
1H 2014 highlights:
· The number of new contracts increased by 44% year-on-year to 4,333
· New contract sales amounted to 204 thousand sqm and RUB 17.17 billion,
year-on-year increases of 33% and 36%, respectively
· Cash collections in 1H 2014 amounted to RUB 14,835 million, an increase
of 36% year-on-year
· Deliveries increased 171% year-on-year to 76 ths sqm, precisely in line
with the 2014 construction programme
1H 2014 Operating results
1H 2014 1H 2013 Change, %
Number of contracts 4,333 3,002 44%
New sales, sqm 203,994 153,523 33%
New sales, mln RUB 17,173 12,669 36%
Cash collections, mln RUB 14,835 10,940 36%
Average price, RUB/sqm 84,184 82,522 2%
Share of mortgages, % 20% 21% (1 p.p.)
1H 2014 Deliveries
1H 2014 1H 2013 Change, %
Deliveries, NSA ths sqm 76 28 171%
1H 2014 Deliveries, by project
ths sqm 1H 2014
Emerald Hills 41.8
Galant 34.6
Total 76.4
1H 2014 Transfers to customers
1H 2014 1H 2013 Change, %
Transferred to customers, sqm 103,260 156,567 (34%)
2Q 2014 highlights
· The number of new contracts in 2Q 2014 increased 31% year-on-year to
2,033
· New contract sales amounted to 95 thousand sqm and RUB 8.1 billion,
year-on-year increases of 19% and 20%, respectively
· Average down payments remained at a high level of 74% in the second
quarter
· The increasing share of sales at prime-location projects continued to
drive new contract sales and higher average prices per sqm for residential and
commercial premises, with average prices for apartments and commercial
premises increasing 8% year-on-year to RUB 96 thousand per sqm
2Q 2014 Operating results
2Q 2014 1Q 2014 4Q 2013 3Q 2013 2Q 2013
Number of contracts 2,033 2,300 2,122 1,752 1,548
New Sales, sqm 94,934 109,060 109,797 92,755 80,042
New Sales, mln RUB 8,095 9,078 9,406 8,152 6,746
Average Price, RUB/sqm 85,271 83,234 85,671 87,887 84,286
Mortgage contract developments
2Q 2014 1Q 2014 4Q 2013 3Q 2013 2Q 2013
Share of mortgages 23% 17% 20% 21% 23%
Etalon Group President Viacheslav Zarenkov said:
"The first half of 2014 has demonstrated the strength of our business model,
aimed at offering high-quality comfort class residential real estate in the
Moscow and St. Petersburg Metropolitan Areas through multiple sales channels
including a sales network that covers all of the Russia's most affluent
regions. In the second quarter the regional network contributed around 40% of
the total sales.
"Another key driver of our continued strong performance in the first six
months of the year is a significantly improved product mix, which is not only
more diversified but also has an increased share of prime-location projects.
Following the launch of the second phase of Tsar's Capital in March 2014, for
example, this project now accounts for 19% of new contract sales. With the
second phase of Etalon City and three new projects due to launch in 2H 2014,
we expect to see further improvements."
Etalon Group CEO Anton Evdokimov said:
"I am very pleased to report a successful first half of 2014, with all
deliveries completed exactly on schedule. After a record first quarter we
have seen demand remain in line with our expectations for 2014, and we are on
track to deliver the 580 ths sqm that our construction plan calls for this
year. Etalon Group's financial position remains strong, with a net cash
position of USD 7 million as of 30 June 2014*, meaning we are able to continue
acquiring new projects in order to secure the Company's long-term growth."
*according to unaudited management accounts
Conference call and webcast
Etalon Group will host a conference call for investors and analysts today at
13:00 London time (16:00 Moscow; 08:00 New York).
On the call, Etalon Group President Viacheslav Zarenkov, CEO Anton Evdokimov,
CFO Boris Svetlichny and Head of Corporate Investments and Investor Relations
Kirill Bagachenko will present the 1H 2014 operating results, followed by a
question and answer session for participants.
Webcast
http://www.media-server.com/m/p/mrn6mfkt
Toll numbers:
+44 20 3037 9374 - London
+7 499 272 4337 - Moscow
+1 646 843 4608 - New York
Toll free numbers:
8 10 8002 4902044 - Russia (from Moscow only)
0808 109 0700 - UK
1 866 966 5335 - USA
Conference Call Password: Etalon
Etalon Group IR Team
T: +44 20 8123 1328
E: info@etalongroup.com
EM
Sam VanDerlip
T: +44 7554 993 032
T: +7 916 306 6112
vanderlip@em-comms.com
About Etalon Group
History and Overview
Founded in 1987 by Viacheslav Zarenkov, Etalon Group has become one of
Russia's largest residential real estate developers. With a more than 25-year
history, the Company has one of the longest and most successful track records
in the Russian real estate industry.
Today Etalon Group is a leading player in Russia's "Golden Triangle" - St
Petersburg, Moscow and the greater Moscow area, with a dominant position in
the "comfort class" segment. The Company's strong foothold in these markets
is reinforced further by its unique nationwide sales network covering 9 of the
10 wealthiest regions of Russia, and spanning 30 cities in total. The sales
network generates up to 30% of Etalon Group's revenue, and has been an
important source of stable demand even throughout the crisis.
Etalon Group is one of the only truly vertically integrated businesses in the
Russian real estate sector. The Company does everything from acquiring land
to sales and cash collections from its customers, which enables it to maximise
margins throughout the value chain, and reduces exposure to cost inflation
from external service providers. Etalon Group is a company of scale, with a
total of 40 business units that employ over 4,000 people, two strong
construction management companies, five general contractors, 16
subcontractors, a crane company, a brick factory and a nationwide sales
network.
Etalon Group's strong financial position is driven by its effective pre-sales
business model. The Company aims to pre-sell 70-90% of all residential space
before a building is delivered. It also targets an average down payment of
50%. This allows Etalon Group to finance the construction process using money
from customers, as opposed to using the loans or funding from shareholders.
In addition to homebuilding, Etalon Group's long history and superior quality
offering has helped it to become a trusted industrial construction partner for
clients like General Motors, Toyota, Ford Motors, Bosch, Siemens, Nissan,
Suzuki and Gazprom in northwest Russia.
Since 20 April 2011, Etalon Group Limited has had its GDRs traded on the Main
Market of the London Stock Exchange.
Operational and Financial Highlights
As of 31 December 2013, Etalon Group's portfolio comprised 28 projects, with a
total of 3.44 million sqm of unsold net sellable area ("NSA") in the St.
Petersburg and Moscow Metropolitan Areas. Jones Lang LaSalle valued this
portfolio at USD 2,727 million, a 15% increase in the market value from YE
2012.
For the year ended 31 December 2013, Etalon Group's new contract sales
totalled 356,075 sqm, or RUB 30,227 million. Deliveries in 2013 totalled 468
thousand sqm.
The Company recorded revenues of RUB 39.9 billion and EBITDA of RUB 9.4
billion, with an EBITDA margin of 24% for the year ended 31 December 2013,
making it one of the most profitable players in the sector.
Etalon Group's net debt position at 31 December 2013 was RUB 182 million,
leaving it well positioned to fund continued dynamic growth.
This information is provided by RNS
The company news service from the London Stock Exchange