30 Sep 2020 07:30
30 September 2020
Etalon Group 1H 2020 IFRS Financial Results
ETALON GROUP PLC ("Etalon Group" or the "Company"), one of Russia's largest and longest-established development and construction companies, announces the publication of its consolidated IFRS financial statements for the six months ended 30 June 2020.
1H 2020 Financial Highlights:
• Consolidated revenue amounted to RUB 30.9 billion
• Pre-PPA consolidated gross profit for the period amounted to RUB 8.9 billion; consolidated gross profit was RUB 7.5 billion
• Pre-PPA gross margin and pre-PPA residential development gross margin increased by 3 p.p. year-on-year to 29% and 32%, respectively
• Pre-PPA earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to RUB 4.4 billion, and pre-PPA EBITDA margin reached 14%
• EBITDA for 1H 2020 amounted to RUB 3.0 billion
• Net corporate debt as of 30 June 2020 amounted to RUB 22.7 billion, and net corporate debt to pre-PPA LTM EBITDA was 2.1x
• Operating cash flow before interest payments amounted to negative RUB 0.9 billion
• Funds accumulated on escrow accounts reached RUB 8.8 billion
Commenting on the 1H 2020 financial results, Etalon Group CEO Gennadiy Shcherbina said:
"Revenue in 1H 2020 was impacted by the following factors: a decline in the signing of construction completion certificates combined with a slowdown in sales and the temporary ban on construction in Moscow due to COVID-19. At the same time, our balanced pricing policy and ongoing measures to improve efficiency, which were launched in 2019, have enabled us to improve profitability both at the gross profit and EBITDA levels. Pre-PPA gross margin for the residential development segment increased by 3 p.p. year-on-year to 32% in 1H 2020. The positive impact of these measures is also reflected in the year-on-year increase in our pre-PPA LTM EBITDA margin, which rose 1.1 p.p. year-on-year to 14.2%.
"We expect further strengthening of margins and other financial metrics for FY 2020, thanks to higher revenue recognition in the second half of the year, a decrease in the share of fixed marketing expenses and continued growth in price per square metre. We are also finalising updates to Etalon Group's strategy to 2024, which aims to further increase the efficiency of our business, as well as strengthen our market positions. We plan to present the updated strategy to the investment community by the end of 2020. Implementation of efficiency measures, together with a new long-term development strategy, will enable Etalon Group to further expand the scale of its business while continuing to fully meet all the obligations we have undertaken to our shareholders and other stakeholders."
Commenting on the 1H 2020 financial results, Etalon Group CFO Ilya Kosolapov added:
"Etalon Group has continued to make progress on bringing debt levels down despite the external environment: gross debt declined from RUB 52.7 billion at year-end 2019 to RUB 48.8 billion as of 30 June 2020. Net corporate debt to LTM pre-PPA EBITDA as of 30 June 2020 remained at a comfortable level of 2.1x. This was achieved even though RUB 8.8 billion of cash was held in escrow accounts at the end of 1H 2020 and therefore not included in the calculation."
Conference call and webcast
Etalon Group's management will present the 1H 2020 IFRS financial results and 3Q 2020 operating results during an investor and analyst conference call scheduled for mid-October. Conference call details and webcast link will be provided in advance.
This and other recent announcements are available on the Etalon Group website: https://www.etalongroup.com/investor-relations/investor-news/
Etalon Group IR TeamT: +44 20 8123 1328E: ir@etalongroup.com
EMSam VanDerlipT: +44 207 002 7859E: 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 57 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 comprise 33 projects under development, unsold inventory at completed residential complexes and commercial properties, with total unsold NSA of 3.3 million sqm, as well as a construction and maintenance division. Colliers International valued the Company's total assets at RUB 188 billion as of 31 December 2019.
For the year ended 31 December 2019, Etalon Group's new contract sales totalled 630 ths sqm, or RUB 77.6 billion. Deliveries in 2019 amounted to 622 ths sqm.
The Company recorded a record revenue of RUB 84.3 billion and EBITDA of RUB 8.9 billion for the year ended 31 December 2019.
Etalon Group's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011 and on the Level 1 List of Moscow Exchange since 31 January 2020 under the ticker ETLN.