October 16, 2017 / 4:57 PM / a month ago

UPDATE 1-Russian homebuilder Etalon lowers 2017 sales forecast

* Sees new contract sales rising more than 10 pct

* Previously targeted 20 pct growth

* Trims outlook due to skewed sales launches

* Says development and dividend plans intact (Adds CEO quotes, background)

MOSCOW, Oct 16 (Reuters) - Russian homebuilder Etalon is unlikely to meet its forecast for 20 percent growth of new contract sales in 2017 because of delays in offering new apartments for sale, Chief Executive Officer Vyacheslav Zarenkov said on Monday.

Sales of apartments in the company’s new projects began later than originally planned, with most skewed towards the second half of 2017 from the first half year, Zarenkov said on a conference call with analysts.

“Taking into account the redistribution of launches of new properties into the market, we accept that the expectations of a 20 percent growth rate look overly optimistic,” he said.

One reason for the delays, Zarenkov said, was difficulty in getting new offerings approved.

The market itself looks healthy. Homebuilder PIK said this month its new sales contracts to customers doubled in the third quarter, helped by new launches. Both PIK and Etalon are focused on building affordable housing in Moscow and St Petersburg.

Etalon’s sales were now expected to rise by slightly more than 10 percent, but the downgrade would not hurt the company’s development plans and dividend payments, Zarenkov said.

The company’s net operating cash flow should be sufficient to cover the development pipeline, land acquisitions and dividends, said Maria Kolbina, an analyst at VTB Capital.

Etalon said in May it would raise its dividend payout range to 40 to 70 percent of net income from 30 to 50 percent .

Etalon’s new sales were flat year-on-year in January through September at 33.6 billion roubles ($586 million). Cash collections rose 10 percent to 31.4 billion roubles.

In the fourth quarter, sales growth is expected to pick up compared with the third quarter’s 13 percent rate, Zarenkov said, as Etalon plans to begin sales of 426,000 square metres of new housing against 133,000 sq m in July-September. ($1 = 57.3105 roubles) (Reporting by Maria Kiselyova and Olga Sichkar, editing by Larry King)

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