ETLN.L Regulatory News (ETLN)

17 May 2017

Etalon Group Changes Dividend Policy

On 16 May 2017, the Board of Directors of ETALON GROUP PUBLIC COMPANY LIMITED ("Etalon Group" or the "Company"), one of Russia's largest and longest-established development and construction companies, resolved to increase the Company's target dividend payout range from the current level of 30%-50% to 40%-70% of consolidated IFRS net income.

Based on this new range, the Board of Directors will continue to consider semi-annual dividend payments, taking into account the pre-sales performance and funding needs for the Company's development programme. This policy will take effect starting with Etalon Group's IFRS financial results for the first half of 2017.

Etalon Group CEO Viacheslav Zarenkov said: "A year ago we decided to revise our dividend policy for the first time since it was adopted in 2013. This decision was based on the first indications of a real estate market recovery, and our expectation that the Company's operating cash flow would turn positive. The past year has exceeded our expectations in terms of sales and operating cash flow performance, which enabled us to recommend dividends for second half 2016 at the upper end of the updated interval.

"Now we see signs that the Company is on a trajectory to achieve sustainable positive operating cash flow, and the real estate market has largely recovered from its decline in 2014-2015. These factors, together with a stable financial position following the results of 2016, have once again enabled the Board of Directors to reconsider the dividend policy and to increase the dividend payout ratio to 40%-70% of net profit.

"I am pleased that the Board of Directors has supported this initiative, which will put Etalon Group among Russian public companies with most appealing dividend distributions."

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 29-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 5.4 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 2016 was RUB 7.8 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 5,000 people, and its nationwide sales and marketing network covers 49 Russian cities.

As of 31 December 2016, Etalon Group's portfolio comprised 35 projects, with a total of 2.82 million sqm of unsold net sellable area. JLL valued this portfolio at RUB 115,818 million.

For the year ended 31 December 2016, Etalon Group's new contract sales totalled 496 ths sqm, or RUB 47,443 million. Deliveries in 2016 amounted to 420 ths sqm.

The Company recorded revenue of RUB 49.0 billion and EBITDA of RUB 7.3 billion for the year ended 31 December 2016.

Etalon Group's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.