REG - Etalon Group PLC - Etalon Group Reports FY 2019 Operating Results

EtalonAnnouncement

20/01/2020 07:30

RNS Number : 2385A
Etalon Group PLC
20 January 2020
 


20 January 2020
 
Etalon Group Reports FY 2019 Operating Results
 
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 twelve months and three months ended 31 December 2019, based on management accounts.
 
FY 2019 operating highlights
 
·    Deliveries reached a record high 622 ths sqm of NSA
·    The number of new contracts amounted to 12,040 
·    New contract sales amounted to 630,399 sqm
·    New contract sales in monetary terms increased by 13% year-on-year to RUB 77,627 million
·    Cash collections rose by 24% year-on-year to RUB 77,713 million
·    Average price per sqm rose by 13% year-on-year to RUB 123,140
·    Average price per sqm of apartments grew by 20% year-on-year to RUB 148,729
 
FY 2019 operating results
 



 


2019


2018


Change, %




New sales, sqm


630,399


627,996


0%




New sales, mln RUB


77,627


68,731


13%




Number of contracts


12,040


12,312


(2%)




Cash collections, mln RUB


77,713 


62,785


24%




Average price, RUB/sqm


123,140


109,445


13%




Average price (apartments), RUB/sqm


148,729


124,113


20%




Deliveries, sqm


621,867


479,339


30%



 
Regional breakdown
 







2019


2018


Change, %




Moscow metropolitan area




New sales, sqm


302,560


303,334


(0%)




New sales, mln RUB


43,180


34,266


26%




Number of contracts


5,619


5,976


(6%)




Cash collections, mln RUB


45,656


31,103


47%




Average price, RUB/sqm


142,717


112,965


26%




Average price (apartments), RUB/sqm


169,154


129,900


30%




Deliveries, sqm


353,129


225,798


56%




St Petersburg




New sales, sqm


327,839


324,663


1%




New sales, mln RUB


34,447


34,465


(0%)




Number of contracts


6,421


6,336


1%




Cash collections, mln RUB


32,057


31,682


1%




Average price, RUB/sqm


105,073


106,156


(1%)




Average price (apartments), RUB/sqm


129,078


119,046


8%




Deliveries, sqm


268,738


253,541


6%










 
4Q 2019 operating highlights
 
·    The number of new contracts reached 2,931
·    New contract sales amounted to 171,530 sqm and RUB 21,795 million
·    Cash collections amounted to RUB 18,791 million
·    Average price per sqm was RUB 127,060, up by 10% year-on-year
·    Average price per sqm of apartments grew by 19% year-on-year to RUB 156,271
·    Average down payment remained at a high level and amounted to 83%
 
4Q 2019 operating results
 



 


4Q 2019


4Q 2018


Change, %




New sales, sqm


171,530


211,356


(19%)




New sales, mln RUB


21,795


24,446


(11%)




Number of contracts


2,931


4,245


(31%)




Cash collections, mln RUB


18,791


20,303


(7%)




Average price, RUB/sqm


127,060


115,660


10%




Average price (apartments), RUB/sqm


156,271


131,331


19%




Deliveries, sqm


308,294


423,069


(27%)



 
Quarterly operating performance
 



 


4Q 2019


3Q 2019


2Q 2019


1Q 2019


4Q 2018




New sales, sqm


171,530


136,658


154,257


167,954


211,356




New sales, mln RUB


21,795


17,098


18,782


19,952


24,446




Number of contracts


2,931


2,579


3,060


3,470


4,245




Cash collections, mln RUB


18,791


16,114


19,177


23,632


20,303




Average price, RUB/sqm


127,060


 125,118


121,759


118,796


115,660




Average price (apartments), RUB/sqm


156,271


 153,394


146,524


140,036


131,331




Deliveries, sqm


308,294


67,230


211,805


34,539


423,069



 
Regional breakdown
 







4Q 2019


4Q 2018


Change, %




Moscow metropolitan area




New sales, sqm


70,084


106,694


(34%)




New sales, mln RUB


10,651


12,800


(17%)




Number of contracts


1,167


2,158


(46%)




Cash collections, mln RUB


9,888


10,908


(9%)




Average price, RUB/sqm


151,971


119,972


27%




Average price (apartments), RUB/sqm


196,420


138,081


42%




Deliveries, sqm


102,482


225,798


(55%)




St Petersburg




New sales, sqm


101,445


104,662


(3%)




New sales, mln RUB


11,144


11,645


(4%)




Number of contracts


1,764


2,087


(15%)




Cash collections, mln RUB


8,903


9,396


(5%)




Average price, RUB/sqm


109,850


111,265


(1%)




Average price (apartments), RUB/sqm


130,579


124,810


5%




Deliveries, sqm


205,812


197,271


4%










 
Mortgage contract developments
 



 


4Q 2019


3Q 2019


2Q 2019


1Q 2019


4Q 2018




Share of mortgages


35%


36%


36%


37%


41%



 
Commenting on the FY 2019 operating results, Etalon Group CEO Gennadiy Shcherbina said:
 
"Despite the anticipated slowdown in housing sales in the second half of 2019, which was driven by front-loaded demand in late 2018 and early 2019 ahead of the introduction of new industry regulations, Etalon Group once again delivered record sales results for FY 2019. While our FY 2019 sales volume of 630 ths sqm was in line with last year's result, a significant year-on-year increase in price per sqm enabled Etalon Group to increase NCS in monetary terms to RUB 78 billion, which nearly coincides with the guidance we announced at the beginning of the year. At the same time, we exceeded our target for cash collections, which reached RUB 78 billion. Thanks to our balanced approach to pricing, we managed not only to achieve these targets but also to maintain sufficient levels of property at advanced stages of completion that will not fall under the new regulations and that can be sold in 2020 at even more attractive prices, which should provide good support for Etalon Group's profitability and cash flows.
 
"Looking at 4Q 2019, putting aside the high base for comparison, we sold 172 ths sqm of NSA worth RUB 22 billion, which is our strongest quarterly result in 2019, and the second highest quarterly result ever achieved by Etalon Group after our best-ever 4Q 2018. This strong performance indicates a fast recovery in housing demand amid a record decline in mortgage rates, and it gives us confidence in our ability to achieve even more impressive results in 2020.
 
"In 2019, Etalon Group completed the acquisition of Leader-Invest, consolidated 100% of the ZIL-Yug project and paid record dividends in the amount of RUB 3.6 billion while maintaining its net debt to LTM EBITDA ratio at a comfortable level of 1.98x, which was possible thanks to our strong cash collections performance during the year. At the same time, we are confident that Etalon Group will further strengthen its financial position in the years ahead thanks to our inventory of available and ready for sale real estate and projects excluded from the requirements of Russia's new industry regulations."
 
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 and 4Q 2019 operating results, followed by a question and answer session for participants.
 
Webcast
https://edge.media-server.com/mmc/p/eg5mprat
 
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: 4018298
 
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: +44 207 002 7859
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 7 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 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 2019, Etalon Group's new contract sales totalled 630 ths sqm, or RUB 77,627 million. Deliveries in 2019 amounted to 622 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.




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