19 Jan 2021 07:30
19 January 2021
Etalon Group Reports Record 4Q and FY 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 twelve months and three months ended 31 December 2020, based on management accounts.
FY 2020 operating highlights
· The number of new contracts amounted to 9,725
· New contract sales amounted to 538 ths sqm
· New contract sales in monetary terms increased by 3% year-on-year reaching an all-time high of RUB 79.9 billion
· Cash collections rose by 5% year-on-year to RUB 82.0 billion
· Average price per sqm was RUB 148.5 ths, up by 21% year-on-year
· Average price per sqm of apartments grew by 20% year-on-year to RUB 178.7 ths
FY 2020 operating results
| 2020 | 2019 | Change, % |
New sales, sqm | 538,194 | 630,399 | (15%) |
New sales, mln RUB | 79,922 | 77,627 | 3% |
Number of contracts | 9,725 | 12,040 | (19%) |
Cash collections, mln RUB | 81,985 | 77,713 | 5% |
Average price, RUB/sqm | 148,501 | 123,140 | 21% |
Average price (apartments), RUB/sqm | 178,685 | 148,729 | 20% |
Deliveries, sqm | 540,325 | 621,867 | (13%) |
Regional breakdown
2020 | 2019 | Change, % | ||
Moscow metropolitan area | ||||
New sales, sqm | 272,421 | 302,560 | (10%) | |
New sales, mln RUB | 46,743 | 43,180 | 8% | |
Number of contracts | 4,938 | 5,619 | (12%) | |
Cash collections, mln RUB | 48,673 | 45,656 | 7% | |
Average price, RUB/sqm | 171,585 | 142,717 | 20% | |
Average price (apartments), RUB/sqm | 213,274 | 169,154 | 26% | |
Deliveries, sqm | 193,425 | 353,129 | (45%) | |
St Petersburg | ||||
New sales, sqm | 265,773 | 327,839 | (19%) | |
New sales, mln RUB | 33,179 | 34,447 | (4%) | |
Number of contracts | 4,787 | 6,421 | (25%) | |
Cash collections, mln RUB | 33,312 | 32,057 | 4% | |
Average price, RUB/sqm | 124,839 | 105,073 | 19% | |
Average price (apartments), RUB/sqm | 145,989 | 129,078 | 13% | |
Deliveries, sqm | 346,901 | 268,738 | 29% | |
4Q 2020 operating highlights
· The number of new contracts reached 3,137
· New contract sales amounted to 166.8 ths sqm and RUB 26.4 billion, up by 21% year-on-year in monetary terms
· Cash collections increased by 55% year-on-year to RUB 29.2 billion
· Average price per sqm rose by 25% year-on-year to RUB 158.4 ths
· Average price per sqm of apartments grew by 23% year-on-year to RUB 191.9 ths
· Average down payment reached a record level of 93%
4Q 2020 operating results
| 4Q 2020 | 4Q 2019 | Change, % |
New sales, sqm | 166,788 | 171,530 | (3%) |
New sales, mln RUB | 26,418 | 21,795 | 21% |
Number of contracts | 3,137 | 2,931 | 7% |
Cash collections, mln RUB | 29,203 | 18,791 | 55% |
Average price, RUB/sqm | 158,392 | 127,060 | 25% |
Average price (apartments), RUB/sqm | 191,853 | 156,271 | 23% |
Deliveries, sqm | 347,396 | 308,294 | 13% |
Quarterly operating performance
| 4Q 2020 | 3Q 2020 | 2Q 2020 | 1Q 2020 | 4Q 2019 |
New sales, sqm | 166,788 | 150,451 | 94,984 | 125,971 | 171,530 |
New sales, mln RUB | 26,418 | 23,983 | 11,585 | 17,936 | 21,795 |
Number of contracts | 3,137 | 2,706 | 1,559 | 2,323 | 2,931 |
Cash collections, mln RUB | 29,203 | 21,235 | 13,942 | 17,604 | 18,791 |
Average price, RUB/sqm | 158,392 | 159,405 | 121,971 | 142,384 | 127,060 |
Average price (apartments), RUB/sqm | 191,853 | 186,327 | 159,063 | 165,481 | 156,271 |
Deliveries, sqm | 347,396 | 15,570 | 88,847 | 88,513 | 308,294 |
Regional breakdown
4Q 2020 | 4Q 2019 | Change, % | ||
Moscow metropolitan area | ||||
New sales, sqm | 86,470 | 70,084 | 23% | |
New sales, mln RUB | 15,315 | 10,651 | 44% | |
Number of contracts | 1,715 | 1,167 | 47% | |
Cash collections, mln RUB | 18,436 | 9,888 | 86% | |
Average price, RUB/sqm | 177,110 | 151,971 | 17% | |
Average price (apartments), RUB/sqm | 221,118 | 196,420 | 13% | |
Deliveries, sqm | 73,967 | 102,482 | (28%) | |
St Petersburg | ||||
New sales, sqm | 80,318 | 101,445 | (21%) | |
New sales, mln RUB | 11,103 | 11,144 | (0%) | |
Number of contracts | 1,422 | 1,764 | (19%) | |
Cash collections, mln RUB | 10,767 | 8,903 | 21% | |
Average price, RUB/sqm | 138,241 | 109,850 | 26% | |
Average price (apartments), RUB/sqm | 162,723 | 130,579 | 25% | |
Deliveries, sqm | 273,429 | 205,812 | 33% | |
Mortgage contract developments
| 4Q 2020 | 3Q 2020 | 2Q 2020 | 1Q 2020 | 4Q 2019 | |
Share of mortgages (total) | 44% | 47% | 44% | 36% | 35% | |
Share of mortgages (apartments) | 65% | 64% | 63% | 52% | 52% | |
Commenting on the FY 2020 operating results, Etalon Group CEO Gennadiy Shcherbina said:
"I am pleased that in FY 2020, Etalon Group has once again delivered record operating results, which exceeded even our optimistic forecast. The Company sold 538 ths sqm of NSA worth RUB 80 billion during the year. Cash collections reached RUB 82 billion, which is the highest level in Etalon Group's history.
"Sales in the fourth quarter made a significant contribution to our full-year results, thanks to continued sustainable demand for residential real estate and Etalon Group's diverse portfolio of projects. Key performance metrics in the final quarter of 2020 saw double-digit year-on-year growth. New contract sales in monetary terms increased by 21% year-on-year to RUB 26.4 billion. Achievement of such strong results was made possible by the development of new sales technologies like dynamic pricing, which enabled us to respond more precisely and flexibly to market trends and increase the average price for apartments to RUB 192 ths per sqm. Mortgage rates remaining at historic lows and the higher share of business class projects in our portfolio resulted in the average down payment rising to a record level of 93%. The combination of these factors made possible significant conversion of new contract sales into cash collections, which for the first time in Etalon Group's history exceeded RUB 29 billion in one quarter, growing by 55% year-on-year.
"The strong performance in 2020 has laid a solid foundation for future growth of our business and achievement of the strategic goals set out in the fall of last year. Our record operating results mean we can count on solid revenue performance for FY 2020, despite a decline in 1H 2020 that was the result of COVID-19 restrictions. At the same time, strong pricing dynamics give us confidence in a continued rapid recovery in profitability.
"We are convinced that continued implementation of plans announced last year related to digital transformation, product improvement and introduction of new construction technologies will enable Etalon Group to achieve even stronger operating and financial results, which will increase value of the Company for its shareholders and all stakeholders."
Commenting on the FY 2020 operating results, Etalon Group CFO Ilya Kosolapov added:
"Solid cash collections backed by strong sales performance had a positive impact on Etalon Group's cash flow generation. We had RUB 25.9 billion of cash and cash equivalents at the end of 2020, which brought net corporate debt down to RUB 19.6 billion. This means that our net corporate debt to LTM pre-PPA EBITDA ratio was a comfortable 1.8x. In addition, we hold sufficient funds in escrow accounts to enable us to raise project financing at lower rates. Etalon Group's robust financial position and cash flow dynamics mean that we can confidently adhere to our dividend policy, which calls for significant annual dividend payments of at least RUB 12 per GDR."
Conference call and webcast
Etalon Group will host a conference call for investors and analysts today at 14:00 London time (17:00 Moscow; 09:00 New York).
On the call, the Etalon Group management team will present the FY and 4Q 2020 operating results, followed by a question and answer session for participants.
Webcast
https://edge.media-server.com/mmc/p/9wghpz7w
Dial-in numbers:
+44 2071 928338 - Standard International
+44 844 4819 752 - London
+7 495 249 9851 - Moscow
+1 646 741 3167 - New York
Conference ID Code: 9775055
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
T: +44 (0) 20 8123 1328
E: ir@etalongroup.com
EM
Sam VanDerlip
T.: +44 207 002 7859
E: 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 7.5 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 57 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 a 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 2020, Etalon Group's new contract sales totalled 538 ths sqm, or RUB 79.9 billion. Deliveries in 2020 amounted to 540 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.