Etalon 2016 Portfolio Value up 33% to USD 1.9 bln

13 March 2017

Etalon 2016 Portfolio Value up 33% to USD 1.9 bln

Etalon Group Limited ("Etalon Group" or "the Company"), one of Russia's largest and longest-established development and construction companies, announces its updated portfolio valuation as of 31 December 2016, conducted by JLL.

The updated valuation puts the open market value of Etalon Group's portfolio at USD 1.9 bln, a 33% year-on-year increase. The open market value per share/GDR grew from USD 4.9 to USD 6.5. The Company's landbank included 2.82 million sqm of NSA as of 31 December 2016. Details of the updated valuation are available on Etalon Group's website:

http://www.etalongroup.com/investors/presentations

Etalon Group President and CEO Viacheslav Zarenkov said:

"The stabilisation of the Russian macro environment, new acquisitions and progress made during the year on existing projects contributed to the 33% year-on-year increase in the open market value of Etalon Group's portfolio in 2016. Strong sales performance at our current projects also supports a positive outlook for future cash flows.

"In 2016, we acquired eight new residential real estate projects in St. Petersburg and the Moscow Metropolitan Area with a total NSA of 682 ths sqm. We have already started sales at two of these projects on Obruchevykh street and Kosmonavtov prospect in St. Petersburg. These and other launches, including our new landmark projects in Moscow (Summer Garden) and St. Petersburg (Galactica), have helped to further diversify our sales portfolio. We have seen a very successful start of sales at Galactica, which was launched in late October 2016, and had 123 new contracts signed in the fourth quarter.

"We have also successfully optimised our inventory of completed apartments: during 2016 we sold nearly 50% of the inventory held as of the end of 2015, signing contracts on 155 ths sqm of the 321 ths sqm of inventory on our books as of 31 December 2015. Balanced by additions from new deliveries in 2016, the total inventory of completed apartments declined by 77 ths sqm, and amounted to 244 ths sqm as of 31 December 2016. JLL estimates the potential income from sales of these properties at USD 422 million.

"Looking ahead to 2017, we plan to launch several new projects, including Silver Fountain and Normandy in Moscow, and the house on Krapivniy pereulok in St. Petersburg, in addition to ramping up sales at existing projects. With several new acquisitions planned for 2017, we are in an excellent position to deliver yet another year of growth."

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 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.

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