RNS Number : 8293Z
Etalon Group PLC
16 January 2024

16 January 2024

Record Sales in 2023: Regional Expansion Underpins Strong Double-digit Growth

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 fourth quarter and twelve months ended 31 December 2023, based on management accounts.

FY 2023 operating highlights

· New contract sales increased by 87% year-on-year to 547.2 ths sqm

· The value of new contract sales increased by 80% year-on-year to RUB 106 billion

· Sales at projects in regional markets increased 274% year-on-year to 188.4 ths sqm, while the value of new contract sales in the same markets increased 339% to RUB 24 billion

· Projects in regional markets accounted for 34% of sales in terms of floor space and 23% of sales in monetary terms

· Cash collections increased by 36% to RUB 82 billion

· The average price per sqm was RUB 192.9 thousand, and the average price per sqm of residential property was RUB 232.7 thousand

FY 2023 operating results


2022

2023

Change, %

New sales, sqm

292,396

547,235

87%

Moscow and the Moscow region

121,371

210,652

74%

St Petersburg

120,619

148,232

23%

Other regions

50,405

188,350

274%

New sales, RUB mln

58,652

105,564

80%

Moscow and the Moscow region

32,296

58,068

80%

St Petersburg

20,944

23,739

13%

Other regions

5,412

23,756

339%

Number of contracts

6,457

11,689

81%

Moscow and the Moscow region

2,645

4,269

61%

St Petersburg

2,609

3,456

32%

Other regions

1,203

3,964

230%

Cash collections, RUB mln

60,386

82,108

36%

Moscow and the Moscow region

31,501

41,954

33%

St Petersburg

24,206

20,423

(16%)

Other regions

4,679

19,731

322%

Average price, RUB/sqm

200,591

192,904

(4%)

Moscow and the Moscow region

266,096

275,659

4%

St Petersburg

173,634

160,149

(8%)

Other regions

107,369

126,129

17%

Average price (apartments), RUB/sqm

261,721

232,675

(11%)

Moscow and the Moscow region

344,131

347,803

1%

St Petersburg

250,674

245,578

(2%)

Other regions

119,428

129,574

8%

4Q 2023 operating highlights

· New contract sales increased 152% year-on-year to RUB 206.6 ths sqm

· In monetary terms, new contract sales increased 152% to RUB 40 billion

· Sales at projects in regional markets increased 161% to 72.7 sqm; the value of new contract sales in the same markets rose 211% to RUB 10 billion

· Projects in regional markets accounted for 35% of sales in terms of floor space and 25% of sales in monetary terms

· Cash collections increased by 76% to RUB 29 billion

· The average price per sqm was RUB 195.5 thousand, while the average price per sqm of residential property increased by 5% to RUB 250 thousand

4Q 2023 operating results


4Q 2022

4Q 2023

Change, %

New sales, sqm

81,934

206,617

152%

Moscow and the Moscow region

28,493

79,231

178%

St Petersburg

25,534

54,667

114%

Other regions

27,907

72,720

161%

New sales, RUB mln

16,004

40,392

152%

Moscow and the Moscow region

7,683

22,411

192%

St Petersburg

5,039

7,761

54%

Other regions

3,282

10,221

211%

Number of contracts

1,770

4,526

156%

Moscow and the Moscow region

618

1,607

160%

St Petersburg

533

1,396

162%

Other regions

619

1,523

146%

Cash collections, RUB mln

16,579

29,214

76%

Moscow and the Moscow region

7,687

15,068

96%

St Petersburg

5,921

6,305

6%

Other regions

2,970

7,841

164%

Average price, RUB/sqm

195,324

195,493

0%

Moscow and the Moscow region

269,655

282,856

5%

St Petersburg

197,335

141,961

(28%)

Other regions

117,593

140,550

20%

Average price (apartments), RUB/sqm

229,297

240,952

5%

Moscow and the Moscow region

328,379

361,370

10%

St Petersburg

261,911

241,931

(8%)

Other regions

123,573

143,608

16%

Quarterly operating performance


4Q 2022

1Q 2023

2Q 2023

3Q 2023

4Q 2023

New sales, sqm

81,934

73,633

110,635

156,295

206,617

New sales, RUB mln

16,004

13,436

20,566

31,169

40,392

Number of contracts

1,770

1,555

2,265

3,343

4,526

Cash collections, RUB mln

16,579

12,001

16,209

24,684

29,214

Average price, RUB/sqm

195,324

182,478

185,892

199,424

195,493

Average price (apartments), RUB/sqm

229,297

219,541

223,389

234,170

240,952

Share of mortgages (total)

58%

47%

50%

49%

51%

Share of mortgages (apartments)

79%

70%

71%

72%

77%

Commenting on the Company's operating results in 4Q and FY 2023, Etalon Group CEO Gennadiy Shcherbina said:

"Last year was the best year in the Company's history in terms of sales. New contract sales for the year amounted to RUB 106 billion, which was an 80% increase from 2022 and a 25% increase from 2021. Sales were especially robust from October to December: the last quarter was the strongest in our history when it comes to sales, both in terms of floor space and in monetary terms.

"The main reason for our rapid growth in 2023 was the expansion of our regional operations. We put new space on the market at nine regional projects during the year, resulting in a nearly fourfold increase in sales in regional markets, accounting for 35% of our total property sales, while prices rose 16% by the end of the year.

"Despite an increase in the key rate, we see excellent potential for further growth this year: an increase in market mortgage rates will encourage buyers to purchase property in the primary market, and, with the continuation of preferential mortgage programmes in regional markets, we will be able to count on stable demand in those cities where we are increasing our supply. Further expansion into new regions will help us reach more customers. At the same time, there is unmet demand for quality affordable housing in regional markets, and we believe that our experience and competencies when it comes to building a project portfolio with extensive regional diversification gives us an advantage over players that are new to these markets."

This and other 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

E: etalon@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. In 2021, the Company began a regional expansion programme and has already launched new projects in Omsk, the Novosibirsk region, Ekaterinburg, Tyumen and Kazan. With a 35-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 delivered 9.0 mln sqm of real estate.

Thanks to its integrated business model, Etalon Group is able to create added value for customers and shareholders at every stage of development, from land plot analysis and acquisition to the operation and maintenance of existing properties. Etalon Group employs more than 5,800 people, and its nationwide sales network covers 35 regions of Russia.

Etalon Group's assets comprise 38 projects at the design and construction stages, unsold inventory at completed residential complexes and commercial properties, with total unsold NSA of 6.4 mln sqm, as well as a construction and maintenance division. According to Nikoliers, the value of Etalon Group assets as of 31 December 2022 was RUB 288 billion.

In 2023, Etalon Group's new contract sales totalled 547 ths sqm, or RUB 105.6 billion.

The Company's revenue in 2022 amounted to RUB 80.6 billion, with EBITDA of RUB 16.5 billion.

Etalon Group's GDRs were listed on the Main Market of the London Stock Exchange on 20 April 2011 and have been included in the Level 1 quotation list of Moscow Exchange since 31 January 2020 under the ticker ETLN. In July 2023, the Company completed the process of changing the basis for its listing on Moscow Exchange.

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