Page 150 - RusRPTSept21

9.2.4 Construction & Real estate corporate news
Etalon Group announced on August 16 that it had acquired a 35% stake in QB Technology, an innovative private UK-based modular construction company. The company provides a full range of services for the design, installation and finishing of residential and commercial modular buildings. The transaction also includes an option for Etalon Group to increase its stake in QB Technology.
PIK Group has reported strong 1H21 IFRS results. Revenues were up 37% y/y to RUB189bn on the back of growing residential volumes (+9% y/y) and a surge in prices (29% y/y).
Such a strong environment was largely attributable to the subsidised mortgage programme, modified after 1 July on less favourable terms. Adjusted EBITDA was up 40% y/y on the back of a 1.9pp y/y improvement in SG&A as a%age of revenue, with margins having stayed at a comparable level (19%), while adjusted net income reached RUB23.6bn (+52% y/y). NOCF was negative RUB113bn, mostly pressured by RUB68bn from land acquisitions and advances. Total debt was RUB337.5bn as of June (80% project financing), while net debt of RUB122bn implied 1.2x net debt / LTM EBITDA (vs. 0.9x a year ago). Overall, we note that 2H21 might face demand risks associated with the modification of the subsidised mortgage programme, noting that family mortgages might not be able to fully compensate this. For 2021F, we expect 35% y/y revenue growth (RUB514bn), with a 24% EBITDA margin (RUB98bn). In our view, the next important milestone is the CMD on 10 September.
· Revenues were up 37% y/y at RUB189bn, with the strength being uniform across the key businesses. The development segment saw revenues surge 32% y/y to RUB141bn (74% of the total), mainly supported by the 29% y/y growth in prices (RUB174k/sqm), as well as the greater progress on building the pipeline. Construction services booked RUB26.7bn vs. RUB15.6bn a year ago (14% of total, +3pp y/y), driven by greater participation in the fee development and renovation programme in Moscow. The utility services (7% of total) provided RUB13bn, staying flat y/y, while the industrial and proptech segments have surged 2.1x-4.1x y/y (although their share in the overall business remains relatively small at 4%).
· EBITDA, adjusted for the effect of the revaluation of financial
150 RUSSIA Country Report September 2021 www.intellinews.com