10 Oct 2018 07:30
10 October 2018
Etalon Group 3Q and 9M 2018 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 2018, based on management accounts.
3Q 2018 operating highlights
· New contract sales amounted to RUB 16,799 million and 154,097 sqm, representing year-on-year growth of 40% and 35%, respectively
· The number of new contracts increased by 27% year-on-year to 2,962
· Cash collections rose by 21% year-on-year to RUB 15,011 million
· Average price per sqm of apartments grew by 10% year-on-year to RUB 125,889
· Average down payment remained high and amounted to 81%
3Q 2018 operating results
3Q 2018 | 3Q 2017 | Change, % | |
New sales, sqm | 154,097 | 113,979 | 35% |
New sales, mln RUB | 16,799 | 11,970 | 40% |
Number of contracts | 2,962 | 2,331 | 27% |
Average price, RUB/sqm | 109,015 | 105,015 | 4% |
Average price (apartments), RUB/sqm | 125,889 | 114,582 | 10% |
Cash collections, mln RUB | 15,011 | 12,433 | 21% |
Quarterly operating performance
3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | |
New sales, sqm | 154,097 | 128,468 | 134,075 | 162,109 | 113,979 |
New sales, mln RUB | 16,799 | 13,882 | 13,605 | 16,676 | 11,970 |
Number of contracts | 2,962 | 2,532 | 2,573 | 3,182 | 2,331 |
Average price, RUB/sqm | 109,015 | 108,055 | 101,474 | 102,869 | 105,015 |
Average price (apartments), RUB/sqm | 125,889 | 120,589 | 114,297 | 115,806 | 114,582 |
Cash collections, mln RUB | 15,011 | 14,694 | 12,778 | 14,717 | 12,433 |
Mortgage contract developments
3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | |
Share of mortgages | 41% | 42% | 40% | 41% | 35% |
9M 2018 operating highlights
· New contract sales increased by 32% year-on-year to RUB 44,286 million and by 19% year-on-year to 416,640 sqm
· The number of contracts grew by 20% year-on-year and amounted to 8,067
· 9M 2018 cash collections rose by 35% year-on-year to RUB 42,482 million
9M 2018 operating results
| 9M 2018 | 9M 2017 | Change, % |
New sales, sqm | 416,640 | 350,052 | 19% |
New sales, mln RUB | 44,286 | 33,564 | 32% |
Number of contracts | 8,067 | 6,734 | 20% |
Cash collections, mln RUB | 42,482 | 31,430 | 35% |
Commenting on the operating results, Etalon Group Chairman of the Board of Directors Viacheslav Zarenkov said:
"Due to well-coordinated efforts of the management team, combined with high demand for Etalon Group's projects, we have been able to achieve the best operating results in the Company's more than 30-year history. In the first nine months of 2018 we signed 8,067 contracts with real estate buyers, an increase of 20% year-on-year. New sales increased in both monetary and volume terms, by 32% and 19% to RUB 44.3 billion and 417 ths sqm, respectively. Cash collections reached RUB 42.5 billion, an increase of RUB 11.1 billion or 35% compared to 9M 2017.
"With this impressive set of operating results, we can confidently say that we are outperforming our FY 2018 guidance, announced in the beginning of the year. In January we set ourselves the goal to increase annual real estate sales by 13% to RUB 57 billion. Given that in the first nine months of 2018 we have already achieved 78% of the original guidance, we decided to raise our FY 2018 new contract sales target to RUB 60.2 billion, which represents growth of 20% year-on-year. Achievement of this goal will contribute to a further increase in cash collections, maintenance of positive operating cash flow and a robust financial position. This will allow Etalon Group not only to successfully complete current projects, but also to create a good foundation for future growth and to increase market share in the key regions where we operate."
Etalon Group CEO Dmitry Kashinskiy commented:
"Sales at Etalon Group projects in 3Q 2018 accelerated quarter-on-quarter, growing by 35% and 40% in sqm and RUB terms, respectively, compared to 2Q 2018. Sales in RUB terms set a new Company record, reaching RUB 16.8 billion. This was supported by a 10% year-on-year increase of the average price per sqm for our apartments.
"In the third quarter we continued to broaden our high-end assortment, launching sales at the premium-class Petrovskiy Landmark project. In just two weeks, cash collections from sales at this project amounted to around RUB 500 million. The share of business-class projects in sales has increased to 13% in cash terms. We are also actively exploring the acquisition of new land plots, as prices are now declining after growth in the first half of the year due to strong demand ahead of changes in sector regulation taking effect. In August we acquired a land plot for a comfort-class project in the Moskovskiy district of St Petersburg, and by the end of the year we plan to further invest in our land bank if the market conditions remain favourable."
Conference call and webcast
Etalon Group will host a conference call for investors and analysts today at 14:00 London time (16:00 Moscow; 09:00 New York).
On the call, the Etalon Group management team will present the Company's 3Q 2018 operating and 1H 2018 IFRS financial results, followed by a question and answer session for participants.
Webcast
https://edge.media-server.com/m6/p/jrc47cup
Dial-in numbers:
+44 (0)330 336 9411 - London
+7 495 646 9190 - Moscow
+1 929-477-0324 - New York
Conference ID Code: 5309128
This and other recent announcements are available on the Etalon Group website: http://www.etalongroup.com/investors/news/
Etalon Group IR Team
T: +44 20 8123 1328
E: info@etalongroup.com
EM
Sam VanDerlip
T: +44 7554 993 032
T: +7 499 918 3134
E: vanderlip@em-comms.com
About Etalon Group
Founded in 1987 by Viacheslav Zarenkov, Etalon Group has become one of Russia's largest development and construction corporations. The Company focuses on middle class residential real estate in the Moscow and St Petersburg metropolitan areas, where it operates through Etalon Invest and Etalon LenSpetsSMU subsidiaries. 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 inception, Etalon Group has commissioned 5.8 million sqm.
Etalon Group's strong reputation among consumers supports its pre-sales business model, which helps the Company to minimise external financing needs for on-going projects while maintaining a secure liquidity position: net debt as of 31 December 2017 was RUB 9.7 billion.
The Company is vertically integrated, which helps it to control costs, quality and timing, as well as to demonstrate best-in-class profitability. Etalon Group employs 5 thousand people, and its nationwide sales and marketing network covers 52 Russian cities.
As of 31 December 2017, Etalon Group's assets comprised 38 projects, with a total of 2.82 million sqm of unsold net sellable area, and a construction and maintenance division. Knight Frank valued the Company's assets at RUB 135,197 million.
For the year ended 31 December 2017, Etalon Group's new contract sales totalled 512 ths sqm, or RUB 50,240 million. Deliveries in 2017 amounted to 423 ths sqm.
The Company recorded revenue of RUB 70.6 billion and EBITDA of RUB 13.2 billion for the year ended 31 December 2017.
Etalon Group's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.