Etalon Group Limited ETLN Etalon Announces Updated Construction Programme

  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
as planned."

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:

Toll numbers:

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


M: Communications

Sam VanDerlip

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 
thousand sqm.

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 
the sector.

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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