Etalon Group sings 6,530 contracts
LONDON: Etalon Group, one of Russia's largest and longest-established development and construction companies, set another new contract sales record in 1H 2019 ended June 30, 2019 signing 6,530 contracts during the period, which is 28% higher year-on-year.
New sales in monetary and volume terms increased by 41% and 23% year-on-year, to RUB 38.7 billion and 322 ths sqm, respectively in 1H 2019. This means that Etalon already achieved 48% of 2019 target in monetary terms and 46% in square metres.
Furthermore, the strong sales performance and high average down payment of 85%, combined with active work on refinancing legacy installment plans, have enabled Etalon Group to report cash collections of RUB 42.8 billion in 1H 2019, which represents 57% of our RUB 75 billion guidance for FY 2019.
Etalon Group Chief Executive Officer Gennadiy Shcherbina said: "Etalon Group's 2Q 2019 operating performance made a significant contribution to the first-half result. Real estate sales in monetary terms, including the contribution from Leader-Invest, increased by 35% year-on-year to RUB 18.8 billion. At the same time, sales in the Moscow metropolitan area amounted to RUB 10.9 billion, an increase of 63% year-on-year. The continued growth in the share of the greater Moscow area in our overall results confirms that we made the right choice in focusing on this geography as the most promising area to develop our business in the years ahead.
"In line with our expectations, the pace of sales at Leader-Invest projects accelerated significantly after they were integrated into our sales network. In 2Q 2019, new contract sales rose by 33% year-on-year to RUB 3.8 billion, and by 27% year-on-year to 21.8 ths sqm. The pace of deliveries at Leader-Invest projects has also supported its new contract sales performance, as has construction progress achieved by bringing in Etalon Group's general contractors and subcontracting companies at Leader-Invest sites. We expect that the transition to the Etalon Group brand in the second half of 2019 will further strengthen the Company's position in Moscow and will provide more support for operational performance. On this basis, I am confident that Etalon Group will achieve the guidance we announced for 2019."
Etalon Group Chief Financial Officer Kirill Bagachenko said: "Significant positive free cash flow generation in 1H 2019 enabled Etalon Group to keep net debt at a comfortable level of less than RUB 4 billion as of 30 June 2019, despite the largest-ever increase in the Company's project portfolio that we completed during the first half of the year. This started in February with the acquisition of a controlling stake in Leader-Invest and continued in June when we consolidated 100% of the ZIL-Yug project. At the same time, we have actively increased the pace of construction at all projects, which has made it possible to receive exemptions to new regulatory requirements that came into force on 1 July 2019 for the majority of our projects."