Etalon Group Limited (ETLN) - Etalon Announces Updated Construction
RNS Number : 7648R
Etalon Group Limited
22 November 2012
22 November 2012
Etalon Group Announces Updated Construction Programme
St. Petersburg - Etalon Group Limited ("Etalon Group" or the "Company"), one
of Russia's largest and long-established residential real estate developers,
today announces its updated construction programme for the period 2013-2015.
The updated deliveries plan is set out below:
Annual Deliveries Plan
2013 2014 2015
Planned Net Sellable Area ("NSA") Deliveries, ths sqm 467 582 707
Quarterly Delivery Plan
2012 2013 2014
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Planned Net Sellable Area ("NSA") - 107 146 111 - 28 - 439 42 40 211 289
Deliveries, ths sqm
As is public knowledge the city administrations in both Moscow and St.
Petersburg have changed in the last 18 months. This has led to sector-wide
delays in the residential development process and issuance of necessary
In connection with these sector-wide delays, a significant amount of NSA that
Etalon Group had expected to transfer to customers in 2012 in the original
construction programme is now expected to be transferred to customers in
2013. Similarly, the majority of NSA that Etalon Group expected to transfer
to customers in 2013 is now expected to be transferred to customers in 2014.
For the same reason the launches of sales of Tsar's Capital and Etalon City
have been moved from late 2012 into 2013.
This shift is not expected to have a material impact on Etalon Group's
expected cash collections for 2012, but is likely to have a modest impact on
new contract sales for the year. The Company continues to see strong consumer
demand, which is driving contract sales and cash generation performance,
having collected c.US$ 575 million from residential pre-sales to date in 2012
(based on unaudited management accounts).
Etalon believes that the situation with issuance of construction-related
permits in Moscow and St. Petersburg has now stabilized and is confident in
its updated construction programme.
Commenting on the revised construction programme, Etalon Group President
Viacheslav Zarenkov said:
"Our updated programme reflects shifts in project timetables related to delays
affecting the entire sector. This situation is something that we believe the
market has been aware of, and is largely due to the recent changes in both the
Moscow and St. Petersburg governments. We believe that this situation has
stabilised, and are therefore fully confident that our updated construction
programme is measured and achievable.
"We see good performance with the recently-launched sales at Letniy, and we
have also received the master plan for the second land plot at Lastochkino
Gnezdo in St. Petersburg, enabling us to move ahead with this landmark project
Etalon Group CFO Anton Evdokimov added:
"We completed our post-IPO acquisition programme this summer, while
maintaining a very strong cash position due to successful pre-sales. This puts
us in an excellent position as we review a number of acquisitions both in
Moscow and St. Petersburg to further expand our land bank and operations.
"We remain very optimistic about the fundamentals of comfort class residential
real estate, which represents a great opportunity for a respected and well
financed business like Etalon as demand for our product remains strong and
consumers are increasingly ready and able to spend."
Webcast and Conference Call
Etalon Group will hold a webcast and conference call at 18:00 Moscow time
(14:00 London / 09:00 New York) to discuss its updated 2013-2015 construction
programme. Management will briefly present the updated programme and then
answer questions from analysts and investors. The call will be held in
Conference call dial-ins:
London: +44 (0) 20 3003 2666
Moscow: +7499 272 4337
New York: +1 646 843 4608
Toll free numbers:
Russia: 8 10 8002 4902044 (from Moscow only)
UK: 0808 109 0700
USA: 1 866 966 5335
Conference Call Password: Etalon
Other recent announcements are available on the Etalon Group website:
Etalon Group IR Team
T: +44 (0) 20 8123 1328
T: +7 495 363 2845
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 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 9 of the
10 wealthiest regions of Russia, and spanning 30 cities in total. The sales
network generates up to 30% 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 2011, Etalon Group's portfolio comprised 31 projects, with a
total of 3.25 million sqm of unsold net sellable area ("NSA") in the St.
Petersburg and Moscow Metropolitan Areas. Jones Lang LaSalle valued this
portfolio at USD 1,714 million, a 20% increase in the market value from YE
For the year ended 31 December 2011, Etalon Group's new contract sales
totalled 270,012 sqm, or RUR 18,306 million. Deliveries in 2011 totalled 328
The Company recorded revenues of RUB 22.7 billion (USD 774 million) and EBITDA
of RUB 8.2 billion (USD 279 million), with an EBITDA margin of 36% for the
year ended 31 December 2011, making it one of the most profitable players in
Etalon Group's net cash position at 31 December 2011 was USD 167 million,
leaving it well positioned to fund continued dynamic growth.
This information is provided by RNS
The company news service from the London Stock Exchange
TSTMMMZMNZGGZZG -0- Nov/22/2012 07:13 GMT
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