Etalon boosts IFRS revenue 10% to 88.8 bln rubles in 2023

ST. PETERSBURG. March 25 (Interfax) - Etalon Group boosted revenue to International Financial Reporting Standards 10% to 88.8 billion rubles in 2023, the developer said in a statement.

At the same time, the developer posted a net loss of 3.370 billion rubles compared with a net profit of 13 billion rubles a year earlier.

EBITDA grew by 10% to 18.1 billion rubles, while consolidated gross profit increased by 6% to 30 billion rubles.

The group's net corporate debt in 2023 amounted to 37 billion rubles compared with 14.5 billion rubles in 2022.

"We have entered an investment phase in our development associated with the rapid expansion of our geographic footprint and the consolidation of our leading positions in regional markets. We launched projects in all our new regions in 2023, becoming a genuine nationwide player. Aggressive business growth is contingent on substantial capital investments; amid high interest rates, this puts temporary pressure on net profit. At the same time, we expect regional expansion to enable us to increase business volumes severalfold in the coming years and to gain a leading position in regional markets, while lower rates in the medium term together with reduced overhead costs and increased efficiency will enable us to achieve higher profitability," Etalon Group's Chief Executive Officer Gennadiy Shcherbina was cited as saying in the statement.

Analysts at Sinara investment bank expected the developer's revenue to grow by 6% year-on-year to 85.763 billion rubles and EBITDA to grow by 10% to 18.078 billion rubles. The company was expected to earn a net profit of 1.676 billion rubles by the end of the year.

"With the reduction in operating costs, the decline in gross profit margin is likely to translate into a decrease in EBITDA margin by about 1 p.p. compared to H2 2022. Even a small net profit would be a success after the 2 billion loss recorded in H1 2023. "While building up debt, Etalon Group invests a lot in new projects, especially in the regions, which should increase the company's value in the long term," the Sinara review said.

Etalon Group focuses on residential real estate for the middle class.

According to the group's consolidated financial statements for 2023, the largest shareholder of Etalon Group was Sistema JSFC (48.8%). Mubadala Investment Company owned 6.3%, Kopernik Global Investors - 5%, Prosperity Capital - 4.1%. Another 0.6% was owned by Etalon Group management, while the free float is 35.2%.