Total Revenues Increased 31.4 % and Mexican Housing Revenues Increased 17.6 % Q-O-Q: Adjusted EBITDA Gains 34.4 %; Quarterly Positive Free Cash Flow, Net of Penitentiary Project Payments and FX, Ps.361 million or US$ 28 million
CULIACAN, Mexico, Oct. 23, 2012 /PRNewswire/ -- Desarrolladora Homex, S.A.B. de C.V. ("Homex" or "the Company") [NYSE: HXM, BMV: HOMEX] today announced financial results for the Third Quarter ended September 30, 2012
Pursuant to Article 78 of the General Provisions Applicable to Securities Issuers and Other Participants in the Securities Market (Disposiciones de Caracter General Aplicables a las Emisoras de Valores y a Otros Participantes del Mercado de Valores), beginning in 2012, the Company has adopted IFRS as issued by the International Accounting Standards Boards ("IASB"). Please refer to page 18 for a detailed description of the transition.
- Total revenue for the third quarter of 2012 increased 31.4 percent to Ps.7.5 billion (US$583 million) from Ps.5.7 billion (US$443 million) for the same period in 2011. During the third quarter, the Company recognized Ps.2.0 billion (US$159 million) of revenues from its penitentiary construction projects with the federal government. Mexico housing revenues were Ps.5.1 billion, up 17.6 percent when compared to Ps.4.4 billion registered during the second quarter of 2012.
- Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) during the quarter was Ps.1,759 million (US$137 million), a 34.4 percent increase from the Ps.1,309 million (US$102 million) reported in the third quarter of 2011. Adjusted EBITDA margin increased 53 basis points to 23.5 percent in the third quarter of 2012 from 23.0 percent in the third quarter of 2011.
- Net income (adjusted for non-cash, foreign exchange (FX) effects) for the third quarter of 2012 was Ps.577 million (US$45 million) reflecting a 7.7 percent margin in the third quarter of 2012 compared to Ps.559 million (US$44 million) and a margin of 9.8 percent reported in the same period in 2011. Earnings per Share adjusted for non-cash foreign exchange (FX) effects during the third quarter of 2012 increased 3.1 percent to Ps.1.72 compared to Ps.1.67 during the third quarter of 2011.
- Average selling price for all homes in Mexico during the third quarter of 2012 increased by 3.7 percent to Ps.409 thousand when compared to Ps.394 thousand during the same period a year ago. Home prices in Brazil increased by 16.7 percent to Ps.646 thousand as of the third quarter of 2012 from Ps.553 thousand during the third quarter of 2011.
- As of September 30, 2012, on a consolidated basis and including the penitentiary construction projects, Homex generated a negative free cash flow of Ps.5.3 billion (US$409 million) primarily because construction in progress at these projects is required by IFRS to be recognized as accounts receivable. Homex' free cash flow (FCF) generation without including the penitentiary projects and adjusted for non-cash items and the recognition of the partnership acquisition from one of the penitentiary projects was negative at Ps.522 million (US$41 million). On a quarterly basis, Homex generated positive FCF of Ps. 361 million( US$28 million), from a negative balance of Ps.883 million (US$69 million) registered on June 30, 2012.
FINANCIAL AND OPERATING HIGHLIGHTS
Thousands of pesos
Thousands U.S dollars (Convenience Translation)
Thousands of pesos
Chg % and bps
Thousands U.S Dollars (Convenience Translation)
Chg % and bps
Capitalization of Comprehensive Financing Costs (CFC)
Gross profit adjusted for capitalization of CFC
Operating income adjusted for capitalization of CFC
Interest expense, net (a)
Net Income adjusted for FX
Adjusted EBITDA (b)
Gross margin adjusted for capitalization of CFC
Operating margin adjusted for capitalization of CFC
Adjusted EBITDA margin
Net Income margin adjusted for FX
Earnings per share in Ps.
Earnings per share in Ps. adjusted for FX
Earnings per ADR presented in US$ (c)
Earnings per ADR presented in US$ adjusted for FX
Weighted avg. shares outstanding (MM)
Accounts receivable days (d)
Housing Accounts receivable days
Accounts payable days ( e)
Working Capital Cycle (WCC) days (f)
a.) Including interest expense recognized in Cost of Good 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, excluding (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 third quarter and nine-months accumulated of 2012 and 2011.
c.) US$ values estimated using an exchange rate of Ps.12.8521 per US$1.00 as of September 30, 2012. Common share/ADR ratio: 6:1.
d.) Accounts receivable not including receivables from the penitentiary construction projects.
e.) Accounts payable not including payables related to the penitentiary construction projects.
f.) WCC computation based on LTM COGS under IFRS and not including COGS and revenues from the penitentiary construction projects.
Commenting on third quarter results, Gerardo de Nicolas, Chief Executive Officer of Homex, said:
"During the third quarter of 2012, we saw an important improvement at our Mexican operations, as we started to witness a more accelerated rhythm of collections, leaving behind the administrative delays that we faced during the first half of the year in relation to the Registro Unico de Vivienda (RUV) and compliance with the new sustainability regulations among other requirements that were integrated into the mortgage approval process, principally with INFONAVIT. During the quarter, in México, we titled 12,517 homes, an increase of 13.1 percent when compared to the 11,070 units that we titled during the second quarter of 2012. This quarterly positive result gives us confidence in our ability to meet our 2012 adjusted guidance for Mexico."
"At our infrastructure division, on an accumulated basis as of September 30, 2012, we have recognized Ps.6.0 billion, which represents an advance of approximately 68 percent of completion of these projects. The delivery of both projects is on target and still scheduled for the fourth quarter of this year, as technology, equipment and finishing will be installed during this last stage of construction."
"In Brazil, we continue to face a challenging environment mainly in relation to the administrative procedures with notary publics. As a result of this, we have continued to reduce our investments in construction in progress, resulting in a lower level of operations, but importantly also reducing our rate of investment in the country."
"As a result of a recovery from the administrative delays that we faced during the first half of the year in Mexico, and based on our third quarter performance and continued cost containment efforts, we do expect a strong fourth quarter, and we remain confident that we have made the right strategic decisions to meet our revenue growth, EBITDA and Cash Flow Guidance," he concluded.
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.
THIRD QUARTER 2012 RESULTS CONFERENCE CALL NOTICE
Wednesday, October 24, 2012
9:00 AM Central Time (Mexico City)
10:00 AM Eastern Time (New York)
Gerardo de Nicolas, Chief Executive Officer
Carlos Moctezuma, Vice President of Finance and Planning and Chief Financial Officer
Vania Fueyo, Investor Relations Officer
U.S.: 866- 887-3678
Please call 10 minutes prior to start time and request the Homex call
Head of Investor Relations
Investor Relations Manager
SOURCE Desarrolladora Homex, S.A. de C.V.