Page 108 - RusRPTFeb22

regions; Ekaterinburg is the third, after Omsk and Novosibirsk.
· The acquired land plot represents 25% of the existing portfolio, and we see the selling capacity at 100k sqm annually during the stated project timeframe. This broadly corresponds to the company's
announced sales pipeline.
· Etalon has said that regional properties would not dilute profitability
(35% gross margin in our 2021F model), and we believe this is
achievable given a high degree of product standardization.
· Etalon has not disclosed its acquisition price or payment schemes. We note that Knight Frank valued LSR’s Ekaterinburg portfolio at RUB 9.5k/sqm, per the latest update, but that is at a more advanced
development stage.
· For 2022, Etalon plans 3.5mn sqm of land purchases, divided
equally between Moscow and St Petersburg combined and its new regional markets. We view the plan as aggressive and, subject to prices and payment options, think it could pressure cash flows and dividends (we forecast a 10% annualised yield).
LSR released 4Q/FY21 Operating Results.
Contract sales for 4Q21 were the strongest in 2021 at 176,000 sqm (-25% y/y; +42% q/q), amounting to 30% of 2021 sales – mostly supported by sales in St Petersburg (121,000 sqm; -17% y/y; +75% q/q, due to new launches), albeit sales while flat in Moscow at 26,000 sqm in 4Q21 (-52% y/y) and Ekaterinburg at 29,000 sqm (-22% y/y). Sales by region showed broadly the same decline in 2021: 374,000 sqm (-28% y/y) in St Petersburg, 135,000 sqm (-26% y/y) in Moscow and 104,000 sqm (-17% y/y) in Ekaterinburg
In money terms, contract sales were strong at Rb29bn in 4Q21 (+4% y/y; +45% q/q) and Rb96bn in 2021 (+1% y/y), supported by strong price dynamics with average selling price of Rb165,000 in 4Q21 (+39% y/y; +2% q/q) and Rb156,000 in 2021 (+36% y/y) – strong supportive factor for margins. The share of mortgages improved to 67% in 4Q21 vs 61% in 3Q21, despite changes in the subsidy program Building materials volumes in 2021 came broadly in line with 2021 guidance (also amended in August) – crushed granite 6,736,000cm in 2021 (-3% y/y), sand 6,286,000cm (-13% y/y), ready-mix concrete 917,000cm in 2021 (-3% y/y), with stronger volumes in bricks – 308mn units (+4% y/y) – and aerated concrete – 1,985,000 cm (+9% y/y). Volumes were on the decline in 4Q21, which looks seasonal with crushed granite volumes of 1,837,000 cm in 4Q21 (+7% y/y; -16% q/q), sand 1,855,000 cm (+10% y/y; -10% q/q), Ready-mix concrete 205,000 cm (+3% y/y; -24% q/q), bricks volumes 60mn units (-12% y/y; -40% q/q) and aerated concrete 462,000 cm (+13% y/y; -21% q/q).
Samolet Group 4Q21 trading update; fastest in the sector. The highlights of the conference call are as follows.
108 RUSSIA Country Report February 2022 www.intellinews.com