REG - Etalon Group PLC - Etalon Announces 3Q and 9M 2022 Operating Results

EtalonAnnouncement

26/10/2022 14:45

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RNS Number : 2247E  Etalon Group PLC  26 October 2022

26 October 2022

 

Etalon Group Announces 3Q and 9M 2022 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 three months and nine months ended 30
September 2022, based on management accounts.

9M 2022 Operating Highlights

 

·    New contract sales amounted to 210.5 ths sqm and RUB 42.6 bln

·    Cash collections were at RUB 43.8 billion

·    The number of contracts amounted to 4.7 thousand

·    Average price per sqm grew by 8% year-on-year to RUB 202.6 thousand

·    Average price per sqm of apartments in 9M 2022 was RUB 276.9
thousand, up by 20% year-on-year

9M 2022 operating results

                                      9M 2022  9M 2021  Change, %
 New sales, sqm                       210,461  317,410  (34%)
 New sales, mln RUB                   42,648   59,537   (28%)
 Number of contracts                  4,687    6,155    (24%)
 Cash collections, mln RUB            43,807   60,197   (27%)
 Average price, RUB/sqm               202,641  187,572  8%
 Average price (apartments), RUB/sqm  276,864  230,507  20%
 Deliveries, sqm                      325,969  184,099  77%

 

Regional breakdown

                                      9M 2022  9M 2021  Change, %
 Moscow metropolitan area
 New sales, sqm                       92,878   180,562  (49%)
 New sales, mln RUB                   24,613   39,184   (37%)
 Number of contracts                  2,027    3,508    (42%)
 Cash collections, mln RUB            23,814   38,317   (38%)
 Average price, RUB/sqm               265,004  217,013  22%
 Average price (apartments), RUB/sqm  349,523  259,279  35%
 St Petersburg
 New sales, sqm                       95,085   136,848  (31%)
 New sales, mln RUB                   15,905   20,353   (22%)
 Number of contracts                  2,076    2,647    (22%)
 Cash collections, mln RUB            18,284   21,879   (16%)
 Average price, RUB/sqm               167,270  148,728  12%
 Average price (apartments), RUB/sqm  247,280  189,866  30%
 Other regions
 New sales, sqm                       22,498   -
 New sales, mln RUB                   2,130    -
 Number of contracts                  584      -
 Cash collections, mln RUB            1,709    -
 Average price, RUB/sqm               94,686   -
 Average price (apartments), RUB/sqm  113,472  -

 

3Q 2022 Operating Highlights

·    New contract sales amounted to 67.0 ths sqm and RUB 13.3 billion

·    The number of contracts amounted to 1.6 thousand

·    Cash collections totalled RUB 11.2 billion

·    Average price per sqm reached RUB 199.0 thousand, up by 4%
year-on-year

·    Average price per sqm of apartments grew by 2% year-on-year to RUB
250.3 thousand

 

3Q 2022 operating results

 

                                      3Q 2022  3Q 2021  Change, %
 New sales, sqm                       66,986   96,470   (31%)
 New sales, mln RUB                   13,329   18,390   (28%)
 Number of contracts                  1,572    1,869    (16%)
 Cash collections, mln RUB            11,170   19,308   (42%)
 Average price, RUB/sqm               198,985  190,633  4%
 Average price (apartments), RUB/sqm  250,326  244,928  2%
 Deliveries, sqm                      91,295   181,071  (50%)

 

Regional breakdown

                                      3Q 2022  3Q 2021  Change, %
 Moscow metropolitan area
 New sales, sqm                       25,228   49,445   (49%)
 New sales, mln RUB                   7,100    11,303   (37%)
 Number of contracts                  565      999      (43%)
 Cash collections, mln RUB            5,405    11,832   (54%)
 Average price, RUB/sqm               281,433  228,589  23%
 Average price (apartments), RUB/sqm  351,744  283,070  24%
 St Petersburg
 New sales, sqm                       23,769   47,026   (49%)
 New sales, mln RUB                   4,482    7,088    (37%)
 Number of contracts                  541      870      (38%)
 Cash collections, mln RUB            4,354    7,475    (42%)
 Average price, RUB/sqm               188,567  150,724  25%
 Average price (apartments), RUB/sqm  258,167  201,686  28%
 Other regions
 New sales, sqm                       17,989   -
 New sales, mln RUB                   1,747    -
 Number of contracts                  466      -
 Cash collections, mln RUB            1,410    -
 Average price, RUB/sqm               97,128   -
 Average price (apartments), RUB/sqm  114,362  -

Monthly sales dynamics in 3Q 2022

 

                            July 2022  August 2022  September 2022
 New sales, sqm             17,066     26,335       23,585
 New sales, mln RUB         3,189      5,219        4,922
 Cash collections, mln RUB  2,968      4,058        4,144

 

Quarterly operating performance

                                      3Q 2022  2Q 2022  1Q 2022  4Q 2021  3Q 2021
 New sales, sqm                       66,986   53,036   90,439   129,070  96,470
 New sales, mln RUB                   13,329   9,638    19,681   24,851   18,390
 Number of contracts                  1,572    1,216    1,899    2,405    1,869
 Cash collections, mln RUB            11,170   11,402   21,235   23,897   19,308
 Average price, RUB/sqm               198,985  181,732  217,611  192,538  190,633
 Average price (apartments), RUB/sqm  250,326  294,096  290,140  261,121  244,928
 Deliveries, sqm                      91,295   58,981   175,693  237,110  181,071

 

Mortgage contract developments

 

                                  3Q 2022  2Q 2022  1Q 2022  4Q 2021  3Q 2021
 Share of mortgages (total)       37%      25%      33%      40%      39%
 Share of mortgages (apartments)  55%      55%      61%      70%      66%

 

Commenting on the 3Q and 9M 2022 operating results, Etalon Group CEO Gennadiy
Shcherbina said:

 

"In the first nine months of 2022, Etalon Group sold 210.5 ths sqm for a total
of RUB 42.6 billion. Despite the difficult external environment, which led to
a sharp increase in the key rate in the first half of the year and a decrease
in purchases in late September, we saw a gradual recovery in sales in the last
quarter. New contracts sales increased from RUB 3.2 billion in July to RUB 4.9
billion in September. Cash collections have increased month-on-month since
June.

 

"One of the factors supporting sales in the third quarter was the expansion of
Etalon Group's real estate supply. From January to September, we put about 530
ths sqm on sale at our projects in Moscow, St Petersburg and other regions. A
large percentage of new sales launches took place in the second and third
quarters, thus supporting a gradual recovery of sales from July. At the same
time, regional projects accounted for a considerable share of our sales: in 3Q
2022, 27% of our sales volume came from our regional portfolio. Notably, the
Green River project, launched in April of this year, accounted for 8% of the
total sales volumes for the period from July to September. Projects from our
YIT portfolio accounted for nearly 25% of quarterly sales in our traditional
and regional markets.

 

"Taking into account the new environment and the slowdown in demand in late
September, we adjusted our launch plan for the 12 months of 2022 to 686 ths
sqm. Nonetheless, our flexible business model, stable low-leverage financial
position and our current land bank enable us to increase the volume of new
supply in the wake of market stabilisation and a recovery in demand.

 

"In the current environment, our priority is to make our product more
affordable, which will enable us to maintain good sales dynamics and expand
our presence in regional markets. To improve cost-effectiveness, we are
incorporating our own developments and integrating the digital know-how we
obtained through the acquisition of YIT Russia. Notably, we continue to work
on creating an end-to-end digital architecture for our business; we are taking
an automated approach to project design and standardisation, and we are
developing state-of-the-art industrial technologies for housing construction.
We are now working hard on the development of prefabrication technology and
testing individual prefabricated elements in a number of our projects, and we
are going to scale up this technology to achieve a leading position in terms
of cost-effectiveness."

 

This and other recent announcements are available on the Etalon Group website:
https://www.etalongroup.com/investor-relations/investor-news/
(https://www.etalongroup.com/investor-relations/investor-news/) .

 

Contact information

 

Etalon Group

IR Team

T: +44 (0) 20 8123 1328

E: ir@etalongroup.com

 

EM

E: etalon@em-comms.com (mailto:etalon@em-comms.com)

 

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. In
2021, the Company began a regional expansion programme and has already
launched new projects in Omsk, the Novosibirsk region, Ekaterinburg, Tyumen
and Kazan. With a 35-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 7.9 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 assets comprise 27 projects at the design and construction
stages, unsold inventory at completed residential complexes and commercial
properties, with total unsold NSA of 6.0 mln sqm, as well as a construction
and maintenance division. Colliers International valued the Company's total
assets at RUB 270 billion as of 31 December 2021.

In 2021, Etalon Group's new contract sales totalled 446 ths sqm, or RUB 84.4
billion. The Company's revenue in 2021 amounted to RUB 87.1 billion, with
EBITDA of RUB 17.9 billion.

Etalon Group's GDRs have traded on the Main Market of the London Stock
Exchange since 20 April 2011 and in the Level 1 quotation list of Moscow
Exchange since 31 January 2020 under the ticker ETLN.

 

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