Page 147 - RusRPTOct20

and provide support for the stock. In 1H20, revenues totalled R30.9bn (down 22% y/y), while EBITDA came in at R3.0bn (down 39%), for a 10% margin (versus 14% in 1H19). Pre-PPA EBITDA was R4.4bn (down 20%), with a 14% margin (flat compared to 1H19). Etalon posted a net loss of R1.8bn (versus R1.1bn net income in 1H19). The management said that revenues would have been R9bn higher had it not been for a drop in the number of construction completion certificates signed, slowing sales and a temporary ban on construction in Moscow due to Covid-19. OCF came in at negative R3.4bn (versus R9.0bn in 1H19). Cash collections in escrow accounts reached R8.8bn as of June 30; adjusted for that, OCF stood at more than R5bn. Net debt was R22.7bn, giving a net debt/pre-PPA EBITDA ratio of 2.1. These numbers were already disclosed in the 2Q20 operating results. The company will present the numbers and 3Q20 operating results during an investor and analyst conference call scheduled for mid-October.
One of Russia's top three listed real estate developers​ ​LSR Group​ (LSR) reported 3% year-on-year revenue growth under IFRS in 1H20 to RUB48bn ($651mn), broadly in line with expectations, ​with the revenues from development and construction services comprising the largest share of RUB40bn. However, with 17% growth in Ebitda, net profit of only RUB2.5bn missed expectations due to a 40% surge in financing expenses, BCS Global Markets commented on August 31. Despite the miss on the bottom line, the board of LSR recommended a RUB20 per share dividend for 1H20, or RUB2.1bn in total, beating expectations of a RUB1.5bn-2bn payout for the period, and making an 80% payout ratio and 2.6% dividend yield. Despite the miss on net profit and unexpected declines in margins in some regions such as Moscow and Ekaterinburg, BCS GM sees the results coupled with the dividend surprise as moderately positive for the name and has maintained a Buy recommendation with RUB1,000 per share target price. Sberbank CIB on August 31 also argued that the dividend recommended for 1H20, as well as the switch to semi-annual payment, was positive for LSR's investment case. Overall, the investment bank sees the 1H20 number as positive, "given the operational environment" in the period. Previously LSR had cut ​the dividend payout for 2019​, but proposed a share buyback as a way to redistribute cash to shareholders.
LSR Group has received the rights for land reclamation at, and the further development of, Vasilievsky island in St Petersburg​. The company plans to construct 700,000sqm of residential housing, while the commercial premises and other integrated areas will reach close to 260,000sqm. The announced project is an expansion of the existing property on Vasilievsky island that started in March 2019 and offered 500,000sqm to the market. It is one of the most premium projects in LSR’s portfolio in St Petersburg and current prices of some RUB 180,000/sqm are 40% above the blended price for the city. The announced area implies an increase of 13% on the existing portfolio of 7.6mn sqm and is the third largest project. As a result, it is of a long-term nature, with reclamation works until 2026 and sales to be completed by 2034. Thus, we see limited pressure on medium-term cash flows and anticipate greater
147 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com