Record 2023 sales: regional expansion shows growth

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

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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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