Homex Reports 1Q13 Earnings Results


CULIACAN, Mexico, April 25, 2013 /PRNewswire/ -- Desarrolladora Homex, S.A.B. de C.V. ("Homex" or "the Company") [NYSE: HXM, BMV: HOMEX] today announced financial results for the First Quarter ended March 31, 2013[1].

Financial Highlights

  • Total revenue for the first quarter of 2013 decreased 46.2 percent to Ps.3.3 billion (US$142.6 million) from Ps.6.2 billion (US$216.2 million) for the same period in 2012.  Housing revenues were Ps.2.2 billion (US$179 million), a decline of 39.4 percent compared to Ps.3.6 billion (US$294 million) during the first quarter of 2012 mainly driven by the continued slow collection experienced during the recent quarter in the Company's Mexico Division. Due to the low level of collections during the quarter, Homex's ability to complete homes under construction was also affected, impacting its capacity to restore its pipeline of new homes to be collected.
  • In accordance with IFRS since 4Q12, the Company decided not to consolidate results of its penitentiary project located in Chiapas accordingly the Company is only recognizing revenues from the Morelos penitentiary project.  For the quarter, the Company registered revenues of Ps.336.4 million from the penitentiary project located at Morelos. 
  • As recently announced, the Company has signed an agreement with Grupo Financiero Inbursa and Ideal for the sale of its interest in the Federal Penitentiaries located at Morelos and Chiapas. After the completion of this transaction, the Company will no longer consolidate the Federal Penitentiary projects in its financial statements as effectively, both, assets and liabilities, associated to the projects will be transferred to the acquiring party.  No additional capital investment from Homex is expected for the completion of the projects.
  • Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) during the quarter were Ps.599.7 million (US$48.5 million), a 51.7 percent decrease from the Ps.1.2 billion (US$100.4 million) during the same period in 2012. Adjusted EBITDA margin for the recent quarter was 18.0 percent compared to 20.1 percent during the same period of 2012. Adjusted EBITDA margin for housing was 20.2 percent during the first quarter of 2013 compared to 24.2 percent during the same period of 2012.
  • As of March 31, 2013, and as a result of the accumulative FX gain of the Peso against the US dollar, the Company's changes in financial position (which the Company has historically presented as Free Cash Flow), reflect the booking of non-cash items. As of March 31, 2013 and on a consolidated basis, Homex generated negative FCF of Ps.3.2 billion which was driven by the increase in the construction in progress from Mexico's housing division and to a lesser extent  from the recognition of the construction in progress (as AR) from the penitentiary project of Morelos.  Homex FCF without the Federal Penitentiary and adjusted for FX was negative at Ps.3.0 billion.

[1] Unless otherwise noted, all monetary figures in the tables are presented in thousands of Mexican pesos and in accordance with International Financial Reporting Standards (IFRS). First quarter 2013 and 2012 figures are presented without recognizing the effects of inflation per the application of IAS-29 "Effects of inflation." The symbols "Ps." and "$" refer to Mexican pesos and "US$" refers to U.S. dollars. U.S. dollar figures in this release are presented only for the convenience of the reader and are estimated, using an exchange rate of Ps.12.3546 per US$1.00. First quarter 2013 and 2012 financial information is unaudited and subject to adjustments.

Percentage of change expressed in basis points are provided for the convenience of the reader. Basis points figures may not match, due to rounding.

FINANCIAL AND OPERATING HIGHLIGHTS





Thousands of pesos

1Q'13
Thousands U.S
dollars
(Convenience
Translation)

1Q'13
Thousands of
pesos

1Q'12

 Chg % and bps

Volume (Homes)

5,420

5,420

8,738

-38.0%

Revenues

$269,578

$3,330,525

$6,187,293

-46.2%

Housing revenues

$179,390

$2,216,287

$3,657,337

-39.4%

Cost

$213,634

$2,639,363

$4,657,664

-43.3%

   Capitalization of Comprehensive Financing Costs (CFC)

$25,192

$311,241

$221,570

40.5%

Gross profit

$55,944

$691,162

$1,529,629

-54.8%

Gross profit adjusted for capitalization of CFC

$81,136

$1,002,403

$1,751,199

-42.8%

Operating income

$17,393

$214,888

$876,962

-75.5%

Operating income adjusted for capitalization of CFC

$42,586

$526,129

$1,098,532

-52.1%

Interest expense, net (a)

$26,858

$331,821

$337,385

-1.6%

Net income

$7,681

$94,890

$836,908

-88.7%

Net Income adjusted for FX

$5,882

$72,669

$477,017

-84.8%

Adjusted EBITDA (b)

$48,544

$599,742

$1,241,053

-51.7%

Gross margin

20.8%

20.8%

24.7%

-397

Gross margin adjusted for capitalization of CFC

30.1%

30.1%

28.3%

179

Operating margin

6.5%

6.5%

14.2%

-772

Operating margin adjusted for capitalization of CFC

15.8%

15.8%

17.8%

-196

Adjusted EBITDA margin

18.0%

18.0%

20.1%

-205

Adjusted EBITDA margin Homebuilding (c)

20.2%

20.2%

24.2%

-405

Net Income margin adjusted for FX

2.2%

2.2%

7.7%

-553

Earnings per share in Ps.


0.28

2.50

-88.7%

Earnings per share in Ps. adjusted for FX


0.22

1.43

-84.8%

Earnings per ADR presented in US$ (d)

0.14


1.21

-88.7%

Earnings per ADR presented in US$ adjusted for FX

0.11


0.69

-84.8%

Weighted avg. shares outstanding (MM)

334.7

334.7

334.7


Accounts receivable days (e)


92

33


Inventory days


730

668


Inventory (w/o land) days


528

428


Accounts payable days ( f)


94

80


Working Capital Cycle (WCC) days (g)


727

621


a)   Including interest expense recognized in Cost of Goods Sold  ( COGS ) and Comprehensive Financing Costs (CFC); not including interest expense from the penitentiary construction projects.   

b)   Adjusted EBITDA is not a financial measure computed under IFRS. Adjusted EBITDA as derived from IFRS financial information means net income, plus (i) depreciation and amortization; (ii) net comprehensive financing costs ("CFC") (comprised of net interest expense (income), foreign exchange gain or loss, including CFC, capitalized to land balances, that is subsequently charged to cost of sales and (iii) income tax expense and employee statutory profit-sharing expense. See "Adjusted EBITDA" for  a reconciliation of net income to Adjusted EBITDA for the first quarter 2013 and 2012.

c)   Adjusted EBITDA Margin Homebuilding only considering Mexico Division and International Division.

d)   US$ values estimated using an exchange rate of Ps.12.3546 per US$1.00 as of March 31, 2013.  Common share/ADR ratio: 6:1.

e)   Accounts receivable not including receivables from the penitentiary construction projects.

f)    Due to the Company's decision since 4Q12 not to consolidate the Chiapas Penitentiary Project the Company is also not recognizing the previously recognized Account Payable of  Ps. 1.1 billion in relation to the acquisition of the equity stake at that federal penitentiary.

g)   WCC computation based on LTM COGS under IFRS and not including COGS and revenues from the penitentiary construction projects.

Commenting on first quarter results, Gerardo de Nicolas, Chief Executive Officer of Homex, said:

"As we anticipated and shared with you in February during our fourth quarter and full year 2012 earnings call, the first quarter of the year was expected to be very challenging, and of course, this has been reflected in our reported first quarter results and liquidity position. Nonetheless, we feel positive in relation to our performance during 2013, as we believe our financial position will show improvement through the resources that we will obtain during the following months as a result of the sale of the penitentiaries that we just announced last Friday. From a total of Ps.4.0 billion, Ps.2.0 billion are intended to be invested in working capital to complete homes under construction, thus enabling us to generate operating cash flow.  We will also use Ps.2.0 billion to reduce our indebtness level.

Moreover, we are also demonstrating the effectiveness of our strategy to diversify our operations into other attractive segments, such as infrastructure in Mexico, a division that we will continue to explore and expand in the short term future.

At the same time, we will continue to work diligently with authorities, financial institutions and most importantly, inside the company to successfully navigate the challenges during this period. We remain confident in the prospects of the Mexican housing industry, as the National Housing Plan, which is a six-year plan, denotes the importance of housing in the country and the large number of Mexican families that continue to drive the demand for housing and infrastructure. In the short term, the environment will continue to be challenging, nonetheless we trust in our experience, quality product offering and our management team to accelerate our operations throughout the year in our Mexico Division, taking advantage of a stronger financial position as a result of the monetization of the prisons and the resources that we will have available to us.  We believe that we will be the first company with the ability to offer new homes as per the dramatic reduction of new homes offered in the country."

Detailed Financial Reports

The Company produces a detailed earnings report that provides information regarding Operating and Financial results. This detailed information is considered part of this earnings announcement and is available in full with this earnings release via the Company's website at http://www.homex.com.mx/ri/index.htm through email distribution or the Company's filings with the SEC and the CNBV.



DESARROLLADORA HOMEX, S.A.B de C.V.
FIRST QUARTER 2013 RESULTS
CONFERENCE CALL NOTICE


 

DATE:    

Friday, April 26, 2013



TIME:  

9:00 AM Central Time (Mexico City)




10:00 AM Eastern Time (New York)



HOSTS:        

Gerardo de Nicolas, Chief Executive Officer




Carlos Moctezuma, Vice President of Finance and Planning and Chief Financial Officer




Vania Fueyo, Investor Relations Officer



DIAL-IN:  

International: 706-643-5124




U.S.: 866- 887-3678




Passcode: 33087655




Please call 10 minutes prior to start time and request the Homex call

SOURCE Desarrolladora Homex, S.A.B. de C.V.

Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here