Financial reviewAll financial results are based on the audited consolidated financial statements of JSC INTECO and its subsidiaries for 2020 and 2021.
In 2021, the Company took full advantage of tailwinds in the market, significantly bolstering contract sales (+19% in value terms).
Revenue exceeded RUB 60.4 billion, an increase of more than 2.2x year-on-year. The robust performance was driven by growing average prices and contract sales, as well as by further physical progress of the Westerdam and
EBITDA exceeded RUB 21.7 billion, up 2.4x, and EBITDA margin stood at 36%, up 2 p.p.
Metric | 2019 | 2020 | 2021 | 2021 vs 2020 change, % |
---|---|---|---|---|
Revenue | 30,685 | 26,882 | 60,432 | 2.2x growth |
Cost | -2,232 | -15,074 | -34,564 | 2.3x growth |
Gross profit | 9,453 | 11,808 | 25,868 | 2.2x growth |
Gain / loss from changes in fair value of investment property | -44 | 22 | -31 | 2.4x decrease |
Selling expenses | -528 | -789 | -1,461 | 85 |
General and administrative expenses | -1,967 | -2,131 | -2,254 | 6 |
Reversal / charge of impairment of accounts receivable | -113 | 35 | 77 | 2.2x growth |
Other income | 4,240 | 487 | 194 | -60 |
Other expenses | -158 | -281 | -580 | 2.1x growth |
Total operating profit for the year | 10,883 | 9,151 | 21,813 | 2.4x growth |
Net finance expenses | -4,660 | -3,308 | -5,649 | 6 |
Finance income | 124 | 522 | 554 | 62 |
Finance expenses | -4,784 | -3,830 | -6,203 | 71 |
Profit before tax | 6,223 | 5,843 | 16,164 | 2.8x growth |
Income tax | -58 | -1,264 | -1,732 | 37 |
Total net profit for the year from continuing operations | 6,165 | 4,579 | 14,432 | 3.2x growth |
Profit after tax for the period from discontinued operations | 3,699 | 57 | — | — |
Total net profit for the year | 9,864 | 4,636 | 14,432 | 3.1x growth |
The Company managed to maintain a solid gross margin with a 2.2x increase in revenue.
Metric | 2019 | 2020 | 2021 | 2021 vs 2020 change |
---|---|---|---|---|
Total gross margin | 31 | 44 | 43 | -1 p.p. |
EBITDA grew faster than revenue in 2021.
Metric | 2019 | 2020 | 2021 | 2021 vs 2020 change, % |
---|---|---|---|---|
EBITDA | 8,736 | 9,138 | 21,711 | 2.4x growth |
Profit before tax | 6,223 | 5,843 | 16,164 | 2.8x growth |
Depreciation of fixed assets in costs | 381 | — | — | — |
Depreciation of property, plant and equipment and amortization of intangible assets in general, administrative and selling expenses | 63 | 68 | 100 | 47 |
Finance expenses | 4,784 | 3,830 | 6,203 | 62 |
Finance income | -124 | -522 | -554 | 6 |
Gain / loss from changes in fair value of investment property | 44 | 22 | -31 | 2.4x decrease |
Reversal / charge of impairment of accounts receivable | 113 | 35 | 77 | 2.2x growth |
Income from disposal of a subsidiary | -2,758 | — | — | — |
Revaluation of property, plant and equipment | 10 | 24 | 156 | 6.5x growth |
In August 2021, the Company also acquired 100% stakes in companies in the Rostov Region engaged in local construction or apartment building management. The entities were purchased from a company under common control of the shareholder.
Metric | 2019 | 2020 | 2021 | 2021 vs 2020 change |
---|---|---|---|---|
Cash flows from operating activities | -1,962 | -12,244 | 1,524 | 9x growth |
Cash used in operating activities | 17,414 | 15,044 | 28,864 | 92 |
Proceeds from sale of real estate | 15,305 | 13,825 | 27,735 | 2x growth |
Other proceeds | 2,109 | 1,219 | 1,129 | -7 |
Cash flows from operating activities | -19,376 | -27,288 | -27,340 | 0 |
Payments to suppliers (contractors) for raw and other materials,works and services | -12,490 | -22,302 | -21,264 | -5 |
Payments related to general employee compensation | -2,879 | -2,594 | -2,487 | -4 |
Payments of selling expenses | -773 | -853 | -1,051 | 23 |
Payments of general and administrative expenses | -1,663 | -711 | -908 | 28 |
VAT paid to budget | -949 | -597 | -931 | 56 |
Other payments | -622 | -231 | -699 | 3x growth |
Interest paid | -2,106 | -990 | -2,249 | 2.3x growth |
Income tax payments | -671 | -96 | -383 | 4x growth |
Net cash flows used in operating activities | -4,739 | -13,330 | -1,108 | -92 |
Net cash flows from investing activities | 2,168 | 358 | -25,452 | 72x decrease |
Сash used in investing activities | -2,189 | -2,145 | -26,006 | 12.1x growth |
Loans issued | -2,140 | -2 | — | — |
Investments in property, plant and equipment | -48 | -155 | -281 | 81 |
Acquisition of subsidiaries less cash acquired | — | — | 2,041 | — |
Acquisition of land plots for construction | — | — | -28,311 | — |
Net cash inflow / outflow from disposal of subsidiaries | -1 | -1,985 | 703 | 3.8x growth |
Additional contributions in associates | — | — | -158 | — |
Payments on other investing activities | — | -3 | — | — |
Cash from investing activities | 4,357 | 2,503 | 554 | -78 |
Repayment of loans issued | 2,500 | 2,135 | 2 | -100 |
Interest received | 1,388 | 91 | 220 | 2.4x growth |
Proceeds from other investment activities | 469 | 277 | 332 | 20 |
Net cash flows from financing activities | 3,315 | 13,897 | 31,490 | 2.3x growth |
Cash used in financing activities | -10,601 | -10,273 | -22,889 | 2.2x growth |
Repayment of loans and borrowings | -10,601 | -10,273 | -22,889 | 2.2x growth |
Cash flows from financing activities | 13,916 | 24,170 | 54,379 | 2.2x growth |
Proceeds from loans and borrowings | 13,916 | 24,170 | 54,379 | 2.2x growth |
Cash and cash equivalents at the beginning of the year | 2,196 | 2,940 | 3,865 | 31 |
Cash and cash equivalents at the end of the year | 2,940 | 3,865 | 8,795 | 2.3x growth |
Net increase in cash and cash equivalents | 744 | 925 | 4,930 | 5.3x growth |
Leverage
In 2021, the Company’s loans and borrowings increased 2.4x to RUB 72.4 billion. This growth ensued from new financing provided by partner banks, with whom we cooperate strictly on an arm’s length basis.
Project financing totalled RUB 31.2 billion in 2021. Money in escrow accounts cover the amount of funds raised by as much as 1.3x.
INTECO is raising new debt on comfortable terms: as at the end of 2021, the weighted average interest rate was 4.93%. The loan portfolio’s low interest rate mostly results from substantial cash accumulated in escrow accounts, which translates into lower interest rates on project financing.
Loans with floating interest rates accounted for 39% of INTECO’s total loan portfolio (RUB 28.5 billion) as at 31 December 2021. To mitigate the risks associated with rate growth following key rate hikes by the Bank of Russia, the Company plans to sign addenda for certain loans to fix the interest rate.
For project-related loans, the following interest rate reduction measures may be taken.
- Launching sales for ONEST and Ilyinka and accumulating more funds in escrow accounts, which will bring about a significant rate reduction for the portion covered by escrow accounts.
- Using the government programme of subsidised loans for developersIn accordance with the Russian Government’s Decree No. 534 dated 31 March 2022. On Amending the Russian Government’s Decree No. 629 dated 30 April 2020..
- Repaying a portion of loans using INTECO’s funds, including the money released from escrow accounts.
Category | As at 31 December 2019 | As at 31 December 2020 | As at 31 December 2021 | 2021 vs 2020 change, % |
---|---|---|---|---|
Long-term | ||||
Promissory notes | 400 | 35 | — | — |
Unsecured bank loans and other loans received | 1,986 | 1,235 | 7,929 | 6.4x growth |
Project financing | 3,185 | 13,481 | 18,462 | 37 |
Secured bank loans | — | 13,805 | 23,259 | 68 |
Total | 5,571 | 28,556 | 49,650 | 74 |
Short-term | ||||
Promissory notes | 634 | — | 35 | — |
Unsecured bank loans and other loans received | 2,690 | 1,756 | 430 | -76 |
Project financing | 2,839 | 56 | 12,745 | 227.6x growth |
Secured bank loans | 15,867 | 211 | 9,550 | 45.3x growth |
Total | 22,030 | 2,023 | 22,760 | 11.3x growth |
Total loans and borrowings | 27,601 | 30,579 | 72,410 | 2.4x growth |
INTECO’s net debt (adjusted for escrow accounts) increased 5.6x to RUB 23.5 billion in 2021 due to a larger loan portfolio. Net debt / EBITDA grew to 1.08x in 2021 from 0.46x in 2020.
Metric | 2019 | 2020 | 2021 | 2021 vs 2020 change, % |
---|---|---|---|---|
Net debt (adjusted for escrow accounts) | -18,027 | -4,173 | -23,490 | 5.6x growth |
Cash and cash equivalents | 2,940 | 3,865 | 8,795 | 2.3x growth |
Escrow accounts | 6,634 | 22,541 | 40,125 | 78 |
Long-term borrowings | -5,571 | -28,556 | -49,650 | 74 |
Short-term borrowings | -22,030 | -2,023 | -22,760 | 11.3x growth |