CULIACAN, Mexico, July 24 /PRNewswire-FirstCall/ -- Desarrolladora Homex, S.A.B. de C.V. ("Homex" or "the Company") [NYSE: HXM, BMV: HOMEX] today announced results for the second quarter ended June 30, 2007(1).
Highlights
* Total revenues increased 19.6% in the second quarter of 2007 to
Ps.3.6 billion from Ps.3.0 billion in the second quarter of 2006.
* The Company sold 12,289 homes during the second quarter, representing an
increase of 15.9% over the same period of 2006. Affordable entry and
middle-income unit sales increased 15.3% and 22.8%, respectively, during
the quarter.
* EBITDA during the quarter was Ps.853.0 million, an 18.7% increase from
the Ps.718.4 million reported in the second quarter of 2006.
* Net income increased 19.9% in the second quarter of 2007 to
Ps.419.5 million from Ps.349.8 million in the second quarter of 2006.
* Overall operating cycle continued improving to 313 days in the second
quarter of 2007 from the 331 days recorded in the first quarter of 2007.
* Accounts receivable as a percentage of total revenues improved
significantly to 39.4% from the 48.4% reported in June 2006. Accounts
receivable turnover days improved to 142 days as of June 2007 from 174
days reported as of June 2006.
(1) Unless otherwise noted, all monetary figures are in Mexican pesos and restated as of June 30, 2007 in accordance with Mexican GAAP. The symbols "Ps." and "$" refer to Mexican pesos and "US$" refers to U.S. dollars. The second quarter 2007 financial information is unaudited and is subject to adjustment.
"Homex continues to post strong results, meeting our overall targets and continuing to build on our leadership position in the market. I am very excited to be back heading the Company and remain convinced of its bright future," stated Gerardo de Nicolas, Chief Executive Officer of Homex. "The Mexican market remains strong, both in affordable entry-level, where the federal government is increasingly supporting homebuilding and Homex is well positioned to leverage these opportunities, and in middle-income, where the Company continues to expand its presence with better and more attractive products."
FINANCIAL AND OPERATING HIGHLIGHTS SIX MONTHS Thousands of constant pesos as of June 30, 2007, unless otherwise indicated 2Q07 2Q06 % Chg. 2007 2006 % Chg. Volume (Homes) 12,289 10,603 15.9% 22,050 19,173 15.0% Revenues $3,574,733 $2,988,961 19.6% $6,434,364 $5,371,146 19.8% Gross profit $1,133,543 $951,365 19.1% $2,043,566 $1,694,606 20.6% Operating income $778,890 $655,976 18.7% $1,404,269 $1,184,821 18.5% Net Interest Expense $88,771 $109,725 -19.1% $167,573 $213,453 -21.5% Net Income $419,491 $349,811 19.9% $874,701 $592,678 47.6% EBITDA (a) $853,053 $718,393 18.7% $1,686,549 $1,262,834 33.6% Gross Margin 31.7% 31.8% 31.8% 31.6% Operating Margin 21.8% 21.9% 21.8% 22.1% EBITDA Margin 23.9% 24.0% 26.2% 23.5% Earnings per share 1.25 1.04 2.60 1.76 Earnings per ADR presented in US (b) 0.70 0.58 1.45 0.98 Weighted avge. shares outstanding (MM) 335.9 335.9 335.9 335.9 Accounts receivable (as a % of sales) 39.4% 48.4% Accounts receivable (days) period-end 142 174 Inventory turnover (days) period-end 379 224 Inventory (w/o land) turnover (days) period-end 63 59
(a) EBITDA is defined as net income plus depreciation and amortization, net comprehensive financing cost, income tax expense and employee statutory profit sharing expense. Please see Financial Results / EBITDA, which includes a table that sets forth a reconciliation of net income to EBITDA for the second quarter 2007 and 2006.
(b) US$ values estimated using an exchange rate Ps.10.77 per US$1.00. Common share/ADR ratio: 6:1
2007 Guidance: The Company reaffirmed its guidance for 2007 published in December 2006:
2007 COMPANY GUIDANCE
Guidance 2007
Revenues Improvement 17% to 20% real
EBITDA Margin (%) Approx. 24.0%
Free Cash Flow Neutral to Positive
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/, through email distribution or the Company's filings with the SEC and the CNBV.
DESARROLLADORA HOMEX CONSOLIDATED BALANCE SHEET COMPARISON OF
JUNE 30, 2007 WITH JUNE 30, 2006
(Figures in thousands of
constant June 30, 2007 Change
pesos) Jun-07 Jun-06 07 / 06
ASSETS
CURRENT ASSETS
Cash and cash equivalents 2,083,639 10.2% 1,803,659 11.3% 15.5%
Accounts receivable, net 5,582,099 27.2% 5,465,409 34.4% 2.1%
Inventories 10,185,091 49.7% 6,161,261 38.7% 65.3%
Other current assets 348,946 1.7% 291,718 1.8% 19.6%
Total current
assets 18,199,775 88.7% 13,722,047 86.3% 32.6%
Property and equipment,
net 868,812 4.2% 609,687 3.8% 42.5%
Goodwill 713,670 3.5% 713,670 4.5% 0.0%
Other assets 726,151 3.5% 860,305 5.4% -15.6%
TOTAL 20,508,408 100.0% 15,905,709 100.0% 28.9%
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to financial
institutions 83,797 0.4% 81,411 0.5% 2.9%
Accounts payable 5,583,146 27.2% 3,317,880 20.9% 68.3%
Advances from customers 316,782 1.5% 314,959 2.0% 0.6%
Taxes payable 229,419 1.1% 338,693 2.1% -32.3%
Total current
liabilities 6,213,144 4,052,943 53.3%
Long-term notes payable to
financial institutions 3,515,707 17.1% 3,502,053 22.0% 0.4%
Labor Obligations 51,845 0.3% 41,090 0.3% 26.2%
DEFERRED INCOME TAXES 2,421,283 11.8% 1,608,825 10.1% 50.5%
Total liabilities 12,201,979 59.5% 9,204,911 57.9% 32.6%
STOCKHOLDERS' EQUITY
Common stock 514,887 2.5% 514,887 3.2% 0.0%
Additional paid-in capital 3,198,690 15.6% 3,198,690 20.1% 0.0%
Retained earnings 4,293,876 20.9% 2,776,003 17.5% 54.7%
Excess in restated
stockholders' equity 324,443 1.6% 329,397 2.1% -1.5%
Cumulative initial effect
of deferred income taxes -154,264 -0.8% -154,264 -1.0% 0.0%
Majority
Stockholders'
Equity 8,177,632 39.9% 6,664,713 41.9% 22.7%
Minority interest 128,797 0.6% 36,085 0.2% 256.9%
TOTAL
STOCKHOLDERS'
EQUITY 8,306,429 40.5% 6,700,798 42.1% 24.0%
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 20,508,408 100.0% 15,905,709 100.0% 28.9%
DESARROLLADORA HOMEX CONSOLIDATED INCOME STATEMENT COMPARISON OF SECOND
QUARTER 2007 WITH SECOND QUARTER 2006
(Figures in thousands of
constant pesos as of June Change
30, 2007) 2Q'07 2Q'06 07 / 06
REVENUES
Affordable-entry level
revenue 2,743,354 76.7% 2,390,387 80.0% 14.8%
Middle income housing
revenue 808,050 22.6% 531,942 17.8% 51.9%
Other revenues 23,329 0.7% 66,632 2.2% -65.0%
TOTAL REVENUES 3,574,733 100.0% 2,988,961 100.0% 19.6%
TOTAL COSTS 2,441,189 68.3% 2,037,596 68.2% 19.8%
GROSS PROFIT 1,133,543 31.7% 951,365 31.8% 19.1%
SELLING AND ADMINISTRATIVE
EXPENSES
Selling and Administrative
Expenses 331,890 9.3% 295,389 9.9% 12.4%
Beta Trademark
Amortization 22,763 0.6% -- 0.0% --
TOTAL SELLING AND
ADMINISTRATIVE EXPENSES 354,654 9.9% 295,389 9.9% 20.1%
OPERATING INCOME 778,890 21.8% 655,976 21.9% 18.7%
OTHER INCOME AND EXPENSES 3,252 0.1% 33,537 1.1% -90.3%
NET COMPREHENSIVE FINANCING
COST
Interest expense and
commissions 116,663 3.3% 140,237 4.7% -16.8%
Interest income -27,893 -0.8% -30,512 -1.0% -8.6%
Foreign exchange (gain)
loss 33,934 0.9% 90,894 3.0% -62.7%
Monetary position loss 2,288 0.1% -18,376 -0.6% --
124,993 3.5% 182,243 6.1% -31.4%
INCOME BEFORE INCOME TAX AND
EMPLOYEE STATUTORY PROFIT
SHARING EXPENSE 657,149 18.4% 507,270 17.0% 29.5%
INCOME TAX EXPENSE 201,285 5.6% 158,018 5.3% 27.4%
NET INCOME 455,864 12.8% 349,252 11.7% 30.5%
MAJORITY INTEREST 419,491 11.7% 349,811 11.7% 19.9%
MINORITY INTEREST 36,372 1.0% -559 0.0% 0.0%
NET INCOME 419,491 11.7% 349,811 11.7% 19.9%
Earnings per share 1.25 0.0% 1.04 0.0% 19.9%
EBITDA 853,053 23.9% 718,393 24.0% 18.7%
DESARROLLADORA HOMEX CONSOLIDATED INCOME STATEMENT COMPARISON OF SIX
MONTHS 2007 WITH SIX MONTHS 2006
Figures in thousands of
constant pesos as of June Change
30, 2007 2007 YTD 2006 YTD 07 / 06
REVENUES
Affordable-entry level
revenue 4,912,998 76.4% 4,311,528 80.3% 14.0%
Middle income housing
revenue 1,458,272 22.7% 959,824 17.9% 51.9%
Other revenues 63,094 1.0% 99,794 1.9% -36.8%
TOTAL REVENUES 6,434,364 100.0% 5,371,146 100.0% 19.8%
TOTAL COSTS 4,390,798 68.2% 3,676,540 68.4% 19.4%
GROSS PROFIT 2,043,566 31.8% 1,694,606 31.6% 20.6%
SELLING AND ADMINISTRATIVE
EXPENSES
Selling and Administrative
Expenses 593,646 9.2% 509,785 9.5% 16.5%
Beta Trademark
Amortization 45,651 0.7% -- 0.0% --
TOTAL SELLING AND
ADMINISTRATIVE EXPENSES 639,297 9.9% 509,785 9.5% 25.4%
OPERATING INCOME 1,404,269 21.8% 1,184,821 22.1% 18.5%
OTHER INCOME 152,584 2.4% 39,729 0.7% 284.1%
NET COMPREHENSIVE FINANCING
COST
Interest expense and
commissions 233,591 3.6% 262,782 4.9% -11.1%
Interest income -66,018 -1.0% -49,329 -0.9% 33.8%
Foreign exchange (gain)
loss 37,220 0.6% 144,612 2.7% -74.3%
Monetary position loss 38,480 0.6% 6,872 0.1% 460.0%
243,273 3.8% 364,937 6.8% -33.3%
INCOME BEFORE INCOME TAX AND
EMPLOYEE STATUTORY PROFIT
SHARING EXPENSE 1,313,580 20.4% 859,613 16.0% 52.8%
INCOME TAX EXPENSE 398,698 6.2% 270,300 5.0% 47.5%
NET INCOME 914,882 14.2% 589,313 11.0% 55.2%
MAJORITY INTEREST 874,701 13.6% 592,678 11.0% 47.6%
MINORITY INTEREST 40,181 0.6% -3,365 -0.1% --
NET INCOME 874,701 13.6% 592,678 11.0% 47.6%
Earnings per share 2.60 1.76 47.6%
EBITDA 1,686,549 26.2% 1,262,834 23.5% 33.6%
DESARROLLADORA HOMEX CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL
POSITION FOR SIX MONTHS ENDED JUNE 30, 2007
Figures in thousands of constant
pesos as of June 30, 2007
Net Income 874,701
Non Cash items:
Depreciation 84,045
Minority Interest 42,270
Beta Trademark Amortization 45,651
Deferred income taxes 371,806
1,418,473
(Increase) decrease in:
Trade accounts receivable -227,879
Inventories (w/land) -1,025,538
Trade accounts payable 116,104
Other A&L, net (1) -242,754
Changes in operating assets and
liabilities -1,380,067
Operating Cash Flow 38,405
Capex -300,393
Free Cash Flow -261,988
Net Financing Activities -13,526
Net increase (decrease) cash -275,514
Balance at beginning 2,359,153
Balance at end 2,083,639
(1) Includes adjustments of goodwill and others
About Homex
Desarrolladora Homex, S.A.B. de C.V. [NYSE: HXM, BMV: HOMEX] is a leading, vertically-integrated home development company focused on affordable entry- level and middle-income housing in Mexico. It is one of the most geographically diverse homebuilders in the country. Homex has a leading position in the top four markets in Mexico and is the largest homebuilder in Mexico, based on the number of homes sold and net income.
For additional corporate information, please visit the Company's web site at: http://www.homex.com.mx/
Desarrolladora Homex, S.A.B. de C.V. quarterly reports and all other written materials may from time to time contain statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors can cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include economic and political conditions and government policies in Mexico or elsewhere, including changes in housing and mortgage policies, inflation rates, exchange rates, regulatory developments, customer demand and competition. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Discussion of factors that may affect future results is contained in our filings with the Securities and Exchange Commission.
Attached are the unaudited Consolidated Financial Information Data of Desarrolladora Homex, S.A.B. de C.V. for the three-month period ended June 30, 2007 and 2006, the Consolidated Statement of Changes in Financial Position for the three-month period ended June 30, 2007 and 2006 and the Consolidated Balance Sheet of Desarrolladora Homex, S.A.B. de C.V. as of June 30, 2007 and 2006.
