12 Apr 2022 07:30
12 April 2022
Etalon Group Reports FY 2021 IFRS 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 audited consolidated IFRS financial statements for the twelve months ended 31 December 2021.
FY 2021 financial highlights:
· Revenue for 2021 increased by 11% year-on-year to RUB 87.1 billion.
· Gross profit rose 27% year-on-year and reached RUB 27.8 billion.
· Gross profit margin increased by 4 p.p. year-on-year to 32%.
· Gross profit before purchase price allocation (PPA) for the period increased by 20% to RUB 31.0 billion; pre-PPA gross profit margin increased by 3 p.p. year-on-year to 36%.
· EBITDA increased by 42% year-on-year to RUB 17.9 billion; EBITDA margin rose by 4.5 p.p. year-on-year to 21%.
· Pre-PPA EBITDA amounted to RUB 21.1 billion, and pre-PPA EBITDA margin increased by 3 p.p. year-on-year to 24%.
· Net corporate debt as of 31 December 2021 was RUB 2.6 billion, and the ratio of net corporate debt to pre-PPA EBITDA decreased to 0.1x.
· Funds in escrow accounts reached RUB 59.8 billion.
· Operating cash flow less interest paid and adjusted for escrow cash collections reached RUB 18.8 billion for the period.
Commenting on the FY 2021 financial results, Etalon Group CEO Gennadiy Shcherbina said:
"Just as we expected, Etalon Group's record sales for 2021 were reflected in our strong financial results. The Company posted revenue of RUB 87.1 billion and gross profit of 27.8 billion, the best results in the Group's history.
"Our efforts to improve cost-effectiveness and strictly control costs resulted in an increase in profit margin. Etalon Group is one of the leaders in terms of pre-PPA gross profit margin, reaching 36% for the Company as a whole and 38% in the residential development segment as of the end of the year. In addition, we reduced the ratio of SG&A expenses to revenue to 12% and laid a solid foundation for a further reduction to our target of 10% by 2024, even amid the rapid expansion of our business. As a result of improved business efficiency and strict control of overhead costs, we were able to improve our EBITDA as well. In the last 12 months, pre-PPA EBITDA has increased by 28%, and pre-PPA EBITDA margin has increased by 3 p.p. to 24%.
"Despite the rapidly changing macroeconomic context, we continue to develop projects aimed at improving our operational efficiency and expanding our business, including projects for the digitalisation of the value chain, product standardisation and integration of state-of-the-art industrial housing construction technologies. Thanks to the work we have already completed, we will be able to achieve tangible results in the near future with the introduction of our new standardised product, which offers a high degree of consumer appeal at a lower construction cost.
"I am confident that the successful implementation of our strategic programme in the context of dynamic market consolidation will open up new opportunities for us to further strengthen the Company's position as an industry leader in terms of efficiency and product quality, while also enabling us to substantially expand our business through new markets and our updated offer."
Commenting on the financial results for 2021, Etalon Group's Chief Financial Officer, Ilya Kosolapov, added:
"Thanks to the concerted efforts of the entire team over the past few years, the Company has strengthened its positions considerably, including in financial terms. Net corporate debt at the end of 2021 amounted to only RUB 2.6 billion, even despite record replenishment of the portfolio in 2021. At the same time, the ratio of net corporate debt to pre-PPA EBITDA decreased to 0.1x. Funds in escrow accounts exceed project debt by 1.6x, which enables us to take advantage of preferential project financing rates of 3%-4%, despite an increase in the Bank of Russia's key rate. Moreover, even in the context of a tight monetary policy, the terms of our current loan agreements and our solid liquidity reserve enable us to keep the average interest rate on our debt at a comfortable level and at the same time to finance key projects aimed at strategic business development."
This and other recent announcements are available on the Etalon Group website: https://www.etalongroup.com/investor-relations/investor-news/.
Contact information
Etalon Group
IR Team
+44 (0) 20 8123 1328
Email: ir@etalongroup.com
EM
E-mail: etalon@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 and has already launched new projects in Omsk, the Novosibirsk region as well as Ekaterinburg and Tyumen. 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 commissioned 7.9 mln 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 assets comprise 27 projects at the design and construction stages, unsold inventory at completed residential complexes and commercial properties, with total unsold NSA of 6.0 mln sqm, as well as a construction and maintenance division. Colliers International valued the Company's total assets at RUB 270 billion as of 31 December 2021.
In 2021, Etalon Group's new contract sales totalled 446 ths sqm, or RUB 84.4 billion. The Company's revenue in 2021 amounted to RUB 87.1 billion, with EBITDA of RUB 17.9 billion.
Etalon Group's GDRs have traded on the Main Market of the London Stock Exchange since 20 April 2011 and in the Level 1 quotation list of Moscow Exchange since 31 January 2020 under the ticker ETLN.