REG - Etalon Group PLC - Etalon Group 1H and 2Q 2022 Operating Results

EtalonAnnouncement

29/07/2022 09:15

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RNS Number : 2372U  Etalon Group PLC  29 July 2022

 

29 July 2022

 

Etalon Group 1H and 2Q 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 six months and three months ended 30 June
2022, based on management accounts.

 

1H 2022 operating highlights

·    New contract sales amounted to RUB 29.3 bln and 143.5 ths sqm

·    Cash collections were at RUB 32.6 billion

·    Average price per sqm grew by 10% year-on-year to RUB 204.3 ths

·    Average price per sqm of apartments reached RUB 291.3 ths, up by 30%
year-on-year

·    Deliveries amounted to 235 ths sqm

·    Net corporate debt stood at RUB 6.1 billion as of 30 June 2022

 

1H 2022 operating results

 

                     1H 2022                   1H 2021     Change, %
 New sales, sqm                          143,475     220,940      (35%)
 New sales, RUB mln                      29,319      41,147       (29%)
 Number of contracts                     3,115       4,286        (27%)
 Cash collections, RUB mln               32,637      40,889       (20%)
 Average price, RUB /sqm                 204,348     186,236      10%
 Average price (apartments), RUB/sqm     291,332     224,659      30%

 

Regional breakdown

 

                     1H 2022                      1H 2021  Change, %
 Moscow metropolitan area
 New sales, sqm                          67,650   131,117  (48%)
 New sales, RUB mln                      17,513   27,882   (37%)
 Number of contracts                     1,462    2,509    (42%)
 Cash collections, RUB mln               18,408   26,485   (30%)
 Average price, RUB /sqm                 258,877  212,647  22%
 Average price (apartments), RUB/sqm     348,616  250,839  39%
 St Petersburg
 New sales, sqm                          71,316   89,822   (21%)
 New sales, RUB mln                      11,423   13,265   (14%)
 Number of contracts                     1,535    1,777    (14%)
 Cash collections, RUB mln               13,930   14,404   (3%)
 Average price, RUB/sqm                  160,172  147,683  8%
 Average price (apartments), RUB/sqm     243,109  184,143  32%
 Other regions
 New sales, sqm                          4,509    -
 New sales, RUB mln                      383      -
 Number of contracts                     118      -
 Cash collections, RUB mln               299      -
 Average price, RUB/sqm                  84,945   -
 Average price (apartments), RUB/sqm     109,448  -

 

2Q 2022 operating highlights

 

·    The number of new contracts amounted to 1,216

·    New contract sales were at 53 ths sqm and RUB 9.6 billion

·    Cash collections amounted to RUB 11.4 billion

·    Average price per sqm was RUB 181.7 ths

·    Average price per sqm of apartments grew by 24% to RUB 294.1 ths

 

2Q 2022 operating results

 

                                      2Q 2022  2Q 2021  Change, %
 New sales, sqm                       53,036   122,270  (57%)
 New sales, RUB mln                   9,638    24,933   (61%)
 Number of contracts                  1,216    2,297    (47%)
 Cash collections, RUB mln            11,402   22,853   (50%)
 Average price, RUB/sqm               181,732  203,915  (11%)
 Average price (apartments), RUB/sqm  294,096  236,342  24%

 

Regional breakdown

 

                                      2Q 2022           2Q 2021     Change, %
 Moscow metropolitan area
 New sales, sqm                       25,114            79,352      (68%)
 New sales, RUB mln                   5,720             18,431      (69%)
 Number of contracts                              638         1,479        (57%)
 Cash collections, RUB mln            6,800             16,624      (59%)
 Average price, RUB/sqm               227,781           232,272     (2%)
 Average price (apartments), RUB/sqm  369,908           262,298     41%
 St Petersburg
 New sales, sqm                       23,413            42,918      (45%)
 New sales, RUB mln                   3,535             6,501       (46%)
 Number of contracts                  460               818         (44%)
 Cash collections, RUB mln            4,303             6,229       (31%)
 Average price, RUB/sqm               150,977           151,486     -
 Average price (apartments), RUB/sqm  261,111           184,132     42%
 Other regions
 New sales, sqm                       4,509             -
 New sales, RUB mln                   383               -
 Number of contracts                  118               -
 Cash collections, RUB mln            299               -
 Average price, RUB/sqm               84,945            -
 Average price (apartments), RUB/sqm  109,448           -

 

 

Quarterly operating performance

 

                                      2Q 2022  1Q 2022  4Q 2021  3Q 2021  2Q 2021
 New sales, sqm                       53,036   90,439   129,070  96,470   122,270
 New sales, RUB mln                   9,638    19,681   24,851   18,390   24,933
 Number of contracts                  1,216    1,899    2,405    1,869    2,297
 Cash collections, RUB mln            11,402   21,235   23,897   19,308   22,853
 Average price, RUB/sqm               181,732  217,611  192,538  190,633  203,915
 Average price (apartments), RUB/sqm  294,096  290,140  261,121  244,928  236,342

 

Mortgage contract developments

 

                                  2Q 2022  1Q 2022  4Q 2021  3Q 2021  2Q 2021
 Share of mortgages (total)       25%      33%      40%      39%      47%
 Share of mortgages (apartments)  55%      61%      70%      66%      67%

 

Commenting on the 1H and 2Q 2022 operating results, Etalon Group CEO Gennadiy
Shcherbina said:

 

"In 1H 2022, Etalon Group sold 143.5 ths sqm of real estate worth RUB 29.3
billion. Cash collections from new sales amounted to RUB 32.6 billion. Despite
our strong performance at the beginning of the year, sales slowed in 2Q amid
rising rates and market uncertainty, as well as the limited supply of release
estate.

 

"In order to bolster our offer, by the end of 2Q 2022 we put 413 ths sqm on
sale at Etalon Group projects and at residential complexes from the YIT Russia
portfolio we purchased in May in an M&A deal. In addition to a portfolio
of 0.6 mln sqm in five regions of Russia, the deal included a library of
design solutions, service companies and the country's largest IT platform for
managing apartment buildings. In the context of the development of our
existing land bank, we plan to put about another 700 ths sqm on the market
before the end of the year, which, together with a reduction in the rate on
preferential mortgages, will ensure a strong improvement in our results and
offset the decrease in sales 2Q 2022.

 

"The company intends to continue replenishing its project portfolio in its key
regions and in new markets, as well as to take further steps to improve
business efficiency in order to make our product available to a larger number
of consumers."

 

Etalon Group CFO Ilya Kosolapov added:

 

"Despite the robust expansion of our portfolio and the M&A deal in 1H
2022, Etalon Group maintains a low level of debt. Net corporate debt is only
RUB 6.1 billion; at the project level, our net cash position has increased to
RUB 25.8 billion.

 

"Thanks to our stable financial situation and over RUB 116 billion in cash and
cash equivalents, including in escrow, we are able to continue moving forward
with our ambitious strategic programme even in a turbulent market. In
addition, the full integration of YIT Russia will help bolster the operational
efficiency of the combined company. Operational and financial synergies will
enable us to get closer to achieving our business's key strategic goals."

 

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 (mailto:ir@etalongroup.com)

 

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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 as well as Ekaterinburg
and Tyumen. 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 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 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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