REG - Etalon Group PLC - Etalon Announces Operating Results for 1H, 2Q 2023

EtalonAnnouncement

07/08/2023 07:45

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RNS Number : 4840I  Etalon Group PLC  07 August 2023

7August 2023

 

Etalon Group Announces Twofold Increase in Sales in 2Q 2023 and Outstanding
Results in July 2023

 

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 six months ended 30 June
2023, based on management accounts.

1H 2023 operating highlights:

 

·    New contract sales rose year-on-year by 28% to 184.3 ths sqm in terms
of floor space and by 16% to RUB 34.0 billion in monetary terms

·    Cash collections amounted to RUB 28.2 billion

·    Owing to the increased share of regional projects in the sales
portfolio, the average price per sqm was RUB 184.5 ths, a 10% decrease
compared with 1H 2022

·    The average price per sqm of apartments amounted to RUB 221.9 ths

·    Deliveries amounted or 196 ths sqm

·    In July 2023, after the reporting period, new contract sales were
41.1 ths sqm (up 141% year-on-year) and RUB 8 billion (up 151% year-on-year);
cash collections increased by 129% to RUB 6.8 billion

 

1H 2023 operating results:

                                      1H 2022  1H 2023  Change, %
 New contract sales, sqm              143,475  184,268  28%
 Moscow and the Moscow region         47%      38%
 St Petersburg                        50%      29%
 Other regions                        3%       33%
 New contract sales, RUB mln          29,319   34,002   16%
 Moscow and the Moscow region         60%      51%
 St Petersburg                        39%      28%
 Other regions                        1%       21%
 Number of contracts                  3,115    3,820    23%
 Moscow and the Moscow region         47%      37%
 St Petersburg                        49%      29%
 Other regions                        4%       34%
 Cash collections, RUB mln            32,637   28,210   (14%)
 Moscow and the Moscow region         56%      48%
 St Petersburg                        43%      29%
 Other regions                        1%       23%
 Average price, RUB/sqm               204,348  184,528  (10%)
 Average price (apartments), RUB/sqm  291,332  221,857  (24%)

 

January-July 2023 sales trends

 

                              Jan     Feb     Mar     Apr     May     Jun     Jul
 New contract sales, sqm      18,589  21,855  33,189  39,389  32,959  38,288  41,149
 Change, m-o-m                        18%     52%     19%     (16%)   16%     7%
 New contract sales, RUB mln  3,249   3,701   6,486   7,262   6,141   7,163   8,006
 Change, m-o-m                        14%     75%     12%     (15%)   17%     12%
 Cash collections, RUB mln    4,133   3,275   4,593   5,216   5,768   5,232   6,797
 Change, m-o-m                        (21%)   40%     14%     11%     (9%)    30%

 

2Q 2023 operating highlights:

·    The Company concluded 2,265 new contracts with buyers

·    New contract sales increased year-on-year by 109% to 111 ths sqm and
by 113% to RUB 20.6 billion

·    Cash collections rose by 42% year-on-year to RUB 16.2 billion

·    The average price per sqm was RUB 185.9 ths

·    The average price per sqm of apartments was RUB 223.4 ths

 

2Q 2023 operating results:

 

                                      2Q 2022  2Q 2023  Change, %
 New contract sales, sqm              53,036   110,635  109%
 New contract sales, RUB mln          9,638    20,566   113%
 Number of contracts                  1,216    2,265    86%
 Cash collections, RUB mln            11,402   16,209   42%
 Average price, RUB/sqm               181,732  185,892  2%
 Average price (apartments), RUB/sqm  294,096  223,389  (24%)

 

Regional breakdown

                                      2Q 2022                                   2Q 2023               Change, %
 Moscow and the Moscow region
 New contract sales, sqm              25,114                                         40,980           63%
 New contract sales, RUB mln          5,720                                          10,352           81%
 Number of contracts                                638                              782              23%
 Cash collections, RUB mln            6,800                                          7,857            16%
 Average price, RUB/sqm               227,781                                        252,624          11%
 Average price (apartments), RUB/sqm  369,908                                        326,397          (12%)
 St Petersburg
 New contract sales, sqm              23,413                                         34,151           46%
 New contract sales, RUB mln          3,535                                          6,149            74%
 Number of contracts                  460                                            715              55%
 Cash collections, RUB mln            4,303                                          4,853            13%
 Average price, RUB/sqm               150,977                                        180,062          19%
 Average price (apartments), RUB/sqm  261,111                                        246,034     (6%)
 Other regions
 New contract sales, sqm                                          4,509    35,504          687%
 New contract sales, RUB mln                                      383      4,064           961%
 Number of contracts                                              118      768             551%
 Cash collections, RUB mln                                        299      3,498           1,070%
 Average price, RUB/sqm                                           84,945   114,475         35%
 Average price (apartments), RUB/sqm                              109,448  118,816         9%

 

Quarterly operating performance

                                      2Q 2022  3Q 2022  4Q 2022   1Q 2023   2Q 2023
 New contract sales, sqm              53,036   66,986   81,934   73,633     90,439
 New contract sales, RUB mln          9,638    13,329   16,004   13,436     19,681
 Number of contracts                  1,216    1,572    1,770    1,555      1,899
 Cash collections, RUB mln            11,402   11,170   16,579   12,001     21,235
 Average price, RUB/sqm               181,732  198,985  195,324  185,478    217,611
 Average price (apartments), RUB/sqm  294,096  250,326  229,297  261,121    290,140

 

 

Mortgage contract developments

 

                                  2Q 2022  3Q 2022  4Q 2022  1Q 2023  2Q 2023
 Share of mortgages (total)       25%      37%      58%      47%      50%
 Share of mortgages (apartments)  55%      55%      79%      70%      71%

 

 

Commenting on the Company's operating results, Etalon Group CEO Gennadiy
Shcherbina said:

"Our second-quarter results were strong, as expected. From April through June,
we sold twice as much real estate as in the same period of 2022.

"Our main internal sales driver was the expansion of our offer of affordable
housing in regional markets. Since the launch of our regional expansion
programme, we have put nearly 360 ths sqm on the market at our regional
projects, increasing the share of regions beyond Moscow and St Petersburg in
our sales portfolio to 33% as of the end of the first half of 2023.

"The expansion of our line of more affordable and more popular products drove
a return to double-digit growth rates and enabled us to scale up our business
in line with our strategic goals to 2024. Notably, July has been our best
month so far since 2022 for new contract sales, both in terms of floor space
and in monetary terms - 41 ths sqm and RUB 8 billion, respectively.

"We plan to continue providing a sufficient supply in our traditional markets
and to maintain a high rate of regional expansion. By the end of the year, we
expect to put around an additional 150 ths sqm on sale in regions beyond
Moscow and St Petersburg. We believe that expanding our presence in regional
markets and the successful development of our product will help us ensure
sustainable business growth in the future and strengthen our position as one
of the leading nationwide developers in the country."

 

Ilya Kosolapov, Etalon Group's Chief Financial Officer, added:

"Despite our rapid expansion into regional markets and the active development
of new projects, the Company continues to demonstrate strong financial
performance. The ratio of net corporate debt to pre-PPA EBITDA at the end of
June 2023 was 0.8x, down from 1.0x in April. This is a comfortable level for
the Company and enables us to implement both our current construction projects
and key strategic initiatives in terms of expanding into new regions and
developing advanced technologies."

 

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

Contact information

Etalon Group

IR Team

T: +44 (0) 20 8123 1328

E: ir@etalongroup.com (mailto:ir@etalongroup.com)

EM

E: etalon@em-comms.com
(file:///C%3A/Users/mariya.bevzyuk/Desktop/2Q22/etalon@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. 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 delivered 8.6 mln 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 more than 5,800 people, and its nationwide
sales network covers 35 regions of Russia.

Etalon Group's assets comprise 38 projects at the design and construction
stages, unsold inventory at completed residential complexes and commercial
properties, with total unsold NSA of 6.4 mln sqm, as well as a construction
and maintenance division. According to Nikoliers, the value of Etalon Group
assets as of 31 December 2022 was RUB 288 billion.

In 2022, Etalon Group's new contract sales totalled 292 ths sqm, or RUB 58.7
billion, not including accumulated new contract sales at YIT Russia as of its
acquisition.

The Company's revenue in 2022 amounted to RUB 80.6 billion, with EBITDA of RUB
16.5 billion.

Etalon Group's GDRs have been listed 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. In July 2023, the
Company completed the process of changing the basis for its listing on Moscow
Exchange.

 

 

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