17 Apr 2020 07:30
17 April 2020
Etalon Group Reports 1Q 2020 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 ended 31 March 2020, based on management accounts.
1Q 2020 operating highlights
· The number of new contracts came to 2,323
· New contract sales amounted to 125,971 sqm and RUB 17,936 million
· Cash collections reached RUB 17,604 million
· Average price per sqm was RUB 142,384, up by 20% year-on-year
· Average price per sqm of apartments grew by 18% year-on-year to RUB 165,481
· Deliveries reached 89 ths sqm of NSA
1Q 2020 operating results
| 1Q 2020 | 1Q 2019 | Change, % |
New sales, sqm | 125,971 | 167,954 | (25%) |
New sales, mln RUB | 17,936 | 19,952 | (10%) |
Number of contracts | 2,323 | 3,470 | (33%) |
Cash collections, mln RUB | 17,604 | 23,632 | (26%) |
Average price, RUB/sqm | 142,384 | 118,796 | 20% |
Average price (apartments), RUB/sqm | 165,481 | 140,036 | 18% |
Deliveries, sqm | 88,513 | 34,539 | 156% |
Regional breakdown
| 1Q 2020 | 1Q 2019 | Change, % |
Moscow Metropolitan Area | |||
New sales, sqm | 59,171 | 86,148 | (31%) |
New sales, mln RUB | 10,141 | 11,602 | (13%) |
Number of contracts | 1,122 | 1,763 | (36%) |
Cash collections, mln RUB | 9,324 | 14,262 | (35%) |
Average price, RUB/sqm | 171,385 | 134,674 | 27% |
Average price (apartments), RUB/sqm | 207,899 | 153,058 | 36% |
Deliveries, sqm | 88,513 | 34,539 | 156% |
St Petersburg | |||
New sales, sqm | 66,800 | 81,806 | (18%) |
New sales, mln RUB | 7,795 | 8,350 | (7%) |
Number of contracts | 1,201 | 1,707 | (30%) |
Cash collections, mln RUB | 8,281 | 9,370 | (12%) |
Average price, RUB/sqm | 116,696 | 102,075 | 14% |
Average price (apartments), RUB/sqm | 131,629 | 125,030 | 5% |
Deliveries, sqm | - | - | - |
Quarterly operating performance
| 1Q 2020 | 4Q 2019 | 3Q 2019 | 2Q 2019 | 1Q 2019 |
New sales, sqm | 125,971 | 171,530 | 136,658 | 154,257 | 167,954 |
New sales, mln RUB | 17,936 | 21,795 | 17,098 | 18,782 | 19,952 |
Number of contracts | 2,323 | 2,931 | 2,579 | 3,060 | 3,470 |
Cash collections, mln RUB | 17,604 | 18,791 | 16,114 | 19,177 | 23,632 |
Average price, RUB/sqm | 142,384 | 127,060 | 125,118 | 121,759 | 118,796 |
Average price (apartments), RUB/sqm | 165,481 | 156,271 | 153,394 | 146,524 | 140,036 |
Deliveries, sqm | 88,513 | 308,294 | 67,230 | 211,805 | 34,539 |
Mortgage contract developments
| 1Q 2020 | 4Q 2019 | 3Q 2019 | 2Q 2019 | 1Q 2019 | ||
Share of mortgages | 36% | 35% | 36% | 36% | 37% | ||
Commenting on the 1Q 2020 operating results, Etalon Group CEO Gennadiy Shcherbina said:
"Etalon Group achieved solid operating results despite the expected year-on-year decline in key operating metrics resulting from the high base effect caused by front-loaded demand at the beginning of last year. In monetary terms, we reported the second highest first quarter result ever achieved by Etalon Group of almost RUB 18 billion. The average price of apartments reached a record high of RUB 165.5 ths per sqm, an increase of 18% year-on-year.
"In the first three months of 2020, sales grew by 15% month-on-month in monetary terms, indicating demand for residential real estate was growing prior to the introduction of restrictive measures aimed at combating the spread of COVID-19.
"In order to maintain demand in the changing environment, we were one of the first to launch remote sales channels, such as online booking and sales, which has enabled customers to purchase real estate without visiting an office. In the longer term these new online channels will help us become even closer to our potential customers, expand our customer base, and reduce commercial expenses.
"In the current situation, the health of our employees, clients and partners is our top priority. We have introduced a number of measures intended to protect our employees from potential infection, and regularly monitor the health of those who are not able to work remotely. As of today, Etalon Group is fully compliant with all recommendations by Russian authorities meant to prevent the spread of COVID-19, including the recommendation for all developers to temporarily suspend construction for the week starting 13 April in the Moscow Metropolitan area. At the same time, Etalon Group is well positioned to quickly reinstate construction once the restrictions are lifted, even if the suspension is extended for a longer period. Etalon Group is fortunate to have in-house general- and subcontractors, as well as longstanding relationships with a range of suppliers, giving us the ability to restart and even accelerate the pace of construction on short notice. Moreover, our projects under construction are well diversified between Moscow and St Petersburg, where construction work has not been restricted, which will provide additional support to financial performance."
Conference call and webcast
The Company 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 1Q 2020 operating results, FY 2019 IFRS financial results, and provide an update on the impact of the COVID-19 situation in Russia. Following the presentation there will be a question and answer session for participants.
Webcast
https://edge.media-server.com/mmc/p/jr8qks6q
Dial-in numbers:
+44 2071 928338 - Standard International
+44 844 481 9752 - London
+7 495 249 9851 - Moscow
+1 646 741 3167 - New York
Conference ID Code: 9577776
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
EM Sam 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 58 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 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.