20 Jan 2014 07:10
20 January 2014
Etalon Reports 4Q and FY 2013 Operating Results
Etalon Group Limited ("Etalon Group" or the "Company"), one of Russia's largest and longest established residential real estate developers, announces its unaudited operating results for the three months and full year ended 31 December 2013, based on management accounts.
4Q and FY 2013 Operating Highlights:
· Etalon Group successfully delivered 468[1] ths sqm of NSA in 2013, completing 440 ths sqm in the second half of 2013 in line with the Company's construction programme guidance;
· New contract sales amounted to 110 thousand sqm and RUB 9.41 billion, year-on-year increases of 16% and 27%, respectively;
· Average prices increased 9% year-on-year to RUB 86 thousand per sqm for 4Q 2013;
· The average down payment in 4Q 2013 remained at a high level of 75%;
· The number of new contracts increased by 12% y-o-y to 2,122;
· The Moscow Metropolitan Area (MMA) accounted for a 24% share of new contracts in the fourth quarter, compared to 21% in 4Q 2012;
· The share of mortgage contracts in 4Q 2013 was 20%;
· Transfers to customers in the second half of 2013 increased by 45% vs. 2H 2012.
4Q and FY 2013 Operating Results
4Q 2013 | 4Q 2012 | Change, % | FY 2013 | FY 2012 | Change, % | |
New sales, sqm | 109,797 | 94,483 | 16% | 356,075 | 316,466 | 13% |
New sales, mn RUB | 9,406 | 7,415 | 27% | 30,227 | 23,739 | 27% |
Number of contracts | 2,122 | 1,890 | 12% | 6,932 | 5,797 | 20% |
Average price, RUB/sqm | 85,671 | 78,484 | 9% | 84,889 | 75,013 | 13% |
2H and FY 2013 Deliveries
2H 2013 | 2H 2012 | Change | FY 2013 | FY 2012 | Change, % | |
Delivered, NSA ths sqm | 440 | 256 | 72% | 468 | 363 | 29% |
2H and FY 2013 Transfers to Customers
2H 2013 | 2H 2012 | Change, % | FY 2013 | FY 2012 | Change, % | |
Transferred to customers, sqm | 193,226 | 133,017 | 45% | 349,793 | 240,912 | 45% |
Mortgage Contract Developments
4Q 2013 | 4Q 2012 | Change | FY 2013 | FY 2012 | Change | |
Share of mortgages | 20% | 18% | 2 p.p. | 20.50% | 12.75% | 7.75 p.p. |
Quarterly Summary
4Q 2013 | 3Q 2013 | 2Q 2013 | 1Q 2013 | 4Q 2012 | |
New Sales, sqm | 109,797 | 92,755 | 80,042 | 73,481 | 94,483 |
New Sales, mn RUB | 9,406 | 8,152 | 6,746 | 5,923 | 7,415 |
Average Price, RUB/sqm | 85,671 | 87,887 | 84,286 | 80,606 | 78,484 |
FY 2013 Deliveries, by project
Project | NSA delivered in 2013, ths sqm |
Swallow's Nest | 189 |
Emerald Hills | 107 |
Tsar's Capital | 72 |
Letniy | 64 |
House on Tukhachevskogo Street | 25 |
Galant | 11 |
Total | 468 |
Commenting on the 4Q and FY 2013 operating results, Etalon Group President Viacheslav Zarenkov said:
"We successfully delivered on our construction plan in 2013, completing 468 ths sqm of NSA for the year, an increase of 29% compared to 2012 and an all-time record for Etalon Group. While I am extremely pleased with this result, we are already looking ahead to the even more ambitious goals we have set for ourselves for 2014, when we plan to increase deliveries by 24% year-on-year to 582 ths sqm.
"During the last year Etalon delivered a total of 17 buildings containing 7 110 flats at ongoing projects including Tsar's Capital, Swallow's Nest, Galant, and Emerald Hills, as well as at Letniy and House on Tukhachevskogo Street, where we completed construction work. Looking ahead to 2014, we are fully on track to deliver on all of the projects that we have planned for this year.
"During 2013 we launched sales at Tsar's Capital and Galant, both of which are located in very appealing regions of St. Petersburg, as well as at Etalon City, which is our first project in the city of Moscow. Together with projects launched in 2012, we have significantly diversified our portfolio, which is reflected in our robust new contract sales and price per square metre."
Etalon Group CFO Anton Evdokimov said:
"Our strong 2013 operating performance was also reflected in our cash collections for the year, which increased 25% to RUB 26,073 million. Etalon Group has historically maintained a strong financial position, and this continues to be the case, with net debt as of 31 December 2013 of RUB 794 million, based on current management estimates."
Conference call and webcast
Etalon Group will host a conference call for investors and analysts today at 14:00 London time (18:00 Moscow; 09:00 New York).
On the call, Etalon Group President Viacheslav Zarenkov, CFO Anton Evdokimov and Head of Corporate Investments and Investor Relations Kirill Bagachenko will present the FY 2013 operating results, followed by a question and answer session for participants.
The dial-in and online viewing details are below:
Webcast-Link:
http://www.media-server.com/m/p/djo7i9ro
Toll numbers:
+44 20 3037 9374 - London
+7 499 272 4337 - Moscow
+1 646 843 4608 - New York
Toll free numbers:
8 10 8002 4902044 - Russia (from Moscow only)
0808 109 0700 - UK
1 866 966 5335 - USA
Conference Call Password: Etalon
Etalon Group IR Team
T: +44 20 8123 1328
E: info@etalongroup.com
EM
Sam VanDerlip
T: +44 7554 993 032
T: +7 916 306 6112
vanderlip@em-comms.com
About Etalon Group
History and Overview
Founded in 1987 by Viacheslav Zarenkov, Etalon Group has become one of Russia's largest residential real estate developers. With a more than 25-year history, the Company has one of the longest and most successful track records in the Russian real estate industry.
Today Etalon Group is a leading player in Russia's "Golden Triangle" - St Petersburg, Moscow and the greater Moscow area, with a dominant position in the "comfort class" segment. The Company's strong foothold in these markets is reinforced further by its unique nationwide sales network covering 14 of the 15 wealthiest regions of Russia, and spanning 36 cities in total. The sales network generates up to 36% of Etalon Group's revenue, and has been an important source of stable demand even throughout the crisis.
Etalon Group is one of the only truly vertically integrated businesses in the Russian real estate sector. The Company does everything from acquiring land to sales and cash collections from its customers, which enables it to maximise margins throughout the value chain, and reduces exposure to cost inflation from external service providers. Etalon Group is a company of scale, with a total of 40 business units that employ over 4,000 people, two strong management companies, five general contractors, 16 subcontractors, a crane company, a brick factory and a nationwide sales network.
Etalon Group's strong financial position is driven by its effective pre-sales business model. The Company aims to pre-sell 70-90% of all residential space before a building is delivered. It also targets an average down payment of 50%. This allows Etalon Group to finance the construction process using money from customers, as opposed to using the loans or funding from shareholders.
In addition to homebuilding, Etalon Group's long history and superior quality offering has helped it to become a trusted industrial construction partner for clients like General Motors, Toyota, Ford Motors, Bosch, Siemens, Nissan, Suzuki and Gazprom in northwest Russia.
Since 20 April 2011, Etalon Group Limited has had its GDRs traded on the Main Market of the London Stock Exchange.
Operational and Financial Highlights
As of 31 December 2012, Etalon Group's portfolio comprised 35 projects, with a total of 3.58 million sqm of unsold net sellable area ("NSA") in the St. Petersburg and Moscow Metropolitan Areas. Jones Lang LaSalle valued this portfolio at USD 2,369 million, a 38% increase in the market value from YE 2011.
For the year ended 31 December 2013, Etalon Group's new contract sales totalled 356,075 sqm, or RUB 30,227 million. Deliveries in 2013 totalled 468 thousand sqm.
The Company recorded revenues of RUB 26.9 billion and EBITDA of RUB 6.9 billion, with an EBITDA margin of 26% for the year ended 31 December 2012, making it one of the most profitable players in the sector.
Etalon Group's net cash position at 31 December 2012 was RUB 890 million, leaving it well positioned to fund continued dynamic growth.
[1] FY 2013 deliveries were corrected upwards, from 467 ths sqm reported on 9 January 2014