REG - Etalon Group PLC - Etalon Reports FY and 4Q 2021 Operating Results

EtalonAnnouncement

24/01/2022 07:30

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RNS Number : 3033Z  Etalon Group PLC  24 January 2022

24 January 2022

 

Etalon Group Reports FY and 4Q 2021 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 fourth quarter and twelve months ended 31
December 2021, based on management accounts.

 

FY 2021 operating highlights

 

·    New contract sales in monetary terms increased by 6% year-on-year
reaching an all-time high of RUB 84.4 billion

·    Cash collections rose by 3% year-on-year to RUB 84.1 billion

·    The average price per sqm was RUB 189 ths, up by 27% year-on-year

·    The average price per sqm of apartments grew by 34% year-on-year to
RUB 238.7 ths

 

FY 2021 operating results

 

                                      2021     2020      Change, %
 New sales, sqm                       446,480  538,194   (17%)
 New sales, RUB mln                   84,388   79,922    6%
 Number of contracts                  8,560    9,725     (12%)
 Cash collections, RUB mln            84,094   81,985    3%
 Average price, RUB/sqm               189,008  148,501   27%
 Average price (apartments), RUB/sqm  238,677  178,685   34%

 

Regional breakdown

 

                                      2021               2020     Change, %
 Moscow metropolitan area
 New sales, sqm                       237,412            272,421  (13%)
 New sales, RUB mln                   54,053             46,743   16%
 Number of contracts                              4,654  4,938    (6%)
 Cash collections, RUB mln            52,436             48,673   8%
 Average price, RUB/sqm               227,675            171,585  33%
 Average price (apartments), RUB/sqm  275,549            213,274  29%
 St Petersburg
 New sales, sqm                       209,068            265,773  (21%)
 New sales, RUB mln                   30,335             33,179   (9%)
 Number of contracts                  3,906              4,787    (18%)
 Cash collections, RUB mln            31,658             33,312   (5%)
 Average price, RUB/sqm               145,099            124,839  16%
 Average price (apartments), RUB/sqm  192,124            145,989  32%

 

4Q 2021 operating highlights

 

·    New contract sales amounted to 129.1 ths sqm and RUB 24.9 billion

·    Cash collections were at RUB 23.9 billion

·    The average price per sqm rose by 22% year-on-year to RUB 192.5 ths

·    The average price per sqm of apartments grew by 36% year-on-year to
RUB 261.1 ths

·    The average down payment amounted to 87%

 

4Q 2021 operating results

 

                                      4Q 2021  4Q 2020  Change, %
 New sales, sqm                       129,070  166,788  (23%)
 New sales, RUB mln                   24,851   26,418   (6%)
 Number of contracts                  2,405    3,137    (23%)
 Cash collections, RUB mln            23,897   29,203   (18%)
 Average price, RUB/sqm               192,538  158,392  22%
 Average price (apartments), RUB/sqm  261,121  191,853  36%

 

Quarterly operating performance

 

                                      4Q 2021  3Q 2021  2Q 2021  1Q 2021  4Q 2020
 New sales, sqm                       129,070  96,470   122,270  98,670   166,788
 New sales, RUB mln                   24,851   18,390   24,933   16,214   26,418
 Number of contracts                  2,405    1,869    2,297    1,989    3,137
 Cash collections, RUB mln            23,897   19,308   22,853   18,036   29,203
 Average price, RUB/sqm               192,538  190,633  203,915  164,329  158,392
 Average price (apartments), RUB/sqm  261,121  244,928  236,342  208,095  191,853

 

Regional breakdown

 

                                      4Q 2021            4Q 2020  Change, %
 Moscow metropolitan area
 New sales, sqm                       56,849             86,470   (34%)
 New sales, RUB mln                   14,868             15,315   (3%)
 Number of contracts                              1,146  1,715    (33%)
 Cash collections, mln RUB            14,118             18,436   (23%)
 Average price, RUB/sqm               261,542            177,110  48%
 Average price (apartments), RUB/sqm  329,779            221,118  49%

 St Petersburg
 New sales, sqm                       72,220             80,318   (10%)
 New sales, RUB mln                   9,982              11,103   (10%)
 Number of contracts                  1,259              1,422    (11%)
 Cash collections, RUB mln            9,779              10,767   (9%)
 Average price, RUB/sqm               138,221            138,241  0%
 Average price (apartments), RUB/sqm  197,093            162,723  21%

 

Mortgage contract developments

 

                   4Q 2021                 3Q 2021  2Q 2021  1Q 2021  4Q 2020
 Share of mortgages (total)          40%   39%      47%      37%      44%
 Share of mortgages (apartments)     70%   66%      67%      63%      65%

 

Commenting on the FY 2021 operating results, Etalon Group CEO Gennadiy
Shcherbina said:

 

"Despite a temporary decline in real estate available for sale, Etalon Group
set a new record for sales in monetary terms in 2021 and came very close to
achieving key operational targets. Most our FY 2021 sales - almost 30% of the
record RUB 84.4 billion - took place in the fourth quarter. The average price
for residential properties in Etalon's portfolio increased by 36% to RUB 261
ths per sqm by the end of the year, driven by the launch of attractive new
projects in the higher price segment, as well as strong demand for our current
projects in Moscow and St Petersburg. Strong pricing dynamics, coupled with
ongoing cost-cutting efforts, will contribute to further margin growth: at the
end of 1H 2021, our pre-PPA gross profit margin reached 38% and was the
strongest in the industry.

 

"In an effort to significantly expand the business and secure sustainable
double-digit growth rates in all regions where we operate, the Company
launched a large-scale land bank replenishment programme in 2021. In the last
12 months alone, we increased our portfolio by almost two million sqm and
doubled the geography of our operations by expanding into regional markets. In
2022, we intend to launch sales for three times as much space as the year
before. The properties Etalon will bring to market will include space in new
projects recently added to the portfolio and new buildings in existing
projects. In addition, we will continue to actively increase the volume of
acquisitions, expand our regional presence and plan to act as an industry
consolidator, including through mergers and acquisitions.

 

"The significant progress we have made over the past year proves that Etalon
Group is well on its way to achieving its strategic goals for 2024. I am
confident that with our professional team and the successful implementation of
our sound strategy, the Company will achieve a new level of development this
year, offering current and potential shareholders an attractive return on
their investment."

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

 

"Record sales, systematic efficiency improvements and a balanced approach to
debt management have enabled Etalon Group to significantly strengthen its
financial position. We managed to reduce net corporate debt to RUB 5.1
billion, with the net corporate debt/pre-PPA EBITDA ratio at just 0.2x, while
we consider 2x-3x to be a comfortable level. Etalon Group's net cash position
at the project level is RUB 23.4 billion. Starting in 2022, an additional
supporting factor will be the release of funds held on escrow accounts as we
deliver properties built under the new financing rules.

"Reducing the debt burden and increasing cash flow opens up great
opportunities for us to develop new projects and technologies, accelerate
business growth and maintain our leading profitability position."

 

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 operating
results, as well as an update on the Company's performance against strategic
goals and new acquisitions programme. The presentation will be followed by a
question-and-answer session for participants.

 

Webcast

https://edge.media-server.com/mmc/p/xi3k3bgw
(https://edge.media-server.com/mmc/p/xi3k3bgw)

 

Dial-in numbers:

+44 2071 928338 - Standard International

+44 844 4819 752 - London

+7 495 990 0832 - Moscow

+1 646 741 3167 - New York

 

Conference ID Code:

1746707 - to take part in Russian

5269253 - to take part in English

 

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)

 

EM

Sam VanDerlip

T.: +44 207 002 7859

E: vanderlip@em-comms.com (mailto:vanderlip@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 with new projects in
the Omsk and Novosibirsk regions. 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 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 total assets comprise 20 projects under development, unsold
inventory at completed residential complexes and commercial properties, with
total unsold NSA of 2.8 million sqm, as well as a construction and maintenance
division. Colliers International valued the Company's total assets at RUB 204
billion as of 31 December 2020.

 

In 2021, Etalon Group's new contract sales totalled 446 ths sqm, or RUB 84.4
billion. The Company's revenue in 2020 amounted to RUB 78.7 billion, with
EBITDA of RUB 12.6 billion.

 

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

 

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