CULIACAN, Mexico, Oct. 24, 2011 /PRNewswire/ -- Desarrolladora Homex, S.A.B. de C.V. ("Homex" or "the Company") [NYSE: HXM, BMV: HOMEX] today announced its financial results for the Third Quarter ended on September 30th, 2011.(1)
Financial Highlights
- Total revenue increased 10.3 percent in the third quarter of 2011 to Ps.5.7 billion (US$423 million) from Ps.5.2 billion (US$384 million) for the same period in 2010. On an accumulated basis for the nine months ended September 30, 2011, total revenue increased 12.5 percent to Ps.15.3 billion (US$1.1 billion) from Ps.13.6 billion (US$1.0 billion) during the same period in 2010.
- In the third quarter of 2011, Homex titled 13,271 homes, an increase of 3.6 percent compared to the third quarter of 2010. During the period, the Company continued with its strategy of focusing on the Affordable Entry-Level (AEL) segment of the housing market, its core business, with a product offering affordable for families who earn between two and eleven times the minimum wage. During the third quarter of 2011, the Affordable Entry-Level Segment represented 95 percent of total Homex volume.
- Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) during the quarter was Ps.1,270.4 million (US$94.4 million), an 11.3 percent increase from Ps.1,140.9 million (US$84.8 million) reported in the third quarter of 2010. Adjusted EBITDA margin was 22.3 percent, slightly above of the Company's yearly guidance of 21 to 22 percent and an increase of 21 basis points from 22.1 percent for the second quarter of 2010. This margin improvement was mainly due to lower SG&A expenses.
- Net income for the third quarter of 2011 was Ps.446.6 million or a 7.8 percent margin compared to Ps.514.6 million, a margin of 10.0 percent reported in the same period of 2010. Net income margin (adjusted by FX effects) was 9.2 percent, an improvement of 41 basis points when compared to 8.8 percent (adjusted by FX effects) for 3Q10.
FINANCIAL AND OPERATING HIGHLIGHTS | NINE MONTHS | |||||||
Thousands of pesos | 3Q'11 | 3Q'11 | 3Q'10 | % Chg. | 2011 | 2010 | % Chg. | |
Volume (Homes) | 13,271 | 13,271 | 12,808 | 3.6% | 35,808 | 34,897 | 2.6% | |
Revenues | $423,514 | $5,699,098 | $5,168,023 | 10.3% | $15,287,133 | $13,587,630 | 12.5% | |
Cost | $320,171 | $4,308,449 | $3,461,885 | 24.5% | $11,029,294 | $9,610,628 | 14.8% | |
Capitalization of CFC | $35,076 | $472,010 | $39,561 | 1093.1% | $857,811 | $532,935 | 61.0% | |
Gross profit | $103,342 | $1,390,649 | $1,706,138 | -18.5% | $4,257,839 | $3,977,002 | 7.1% | |
Gross profit adjusted by capitalization of CFC | $138,419 | $1,862,659 | $1,745,699 | 6.7% | $5,115,650 | $4,509,937 | 13.4% | |
Operating income | $51,806 | $697,137 | $938,460 | -25.7% | $2,182,656 | $2,037,772 | 7.1% | |
Operating income adjusted by capitalization of CFC | $86,882 | $1,169,147 | $978,021 | 19.5% | $3,040,467 | $2,570,707 | 18.3% | |
Interest expense, net (a) | $26,465 | $356,136 | $196,353 | 81.4% | $926,512 | $734,557 | 26.1% | |
Net income | $33,190 | $446,630 | $514,563 | -13.2% | $1,190,491 | $1,168,240 | 1.9% | |
Adjusted EBITDA (b) | $94,408 | $1,270,420 | $1,140,953 | 11.3% | $3,338,458 | $3,004,442 | 11.1% | |
Gross margin | 24.4% | 24.4% | 33.0% | 27.9% | 29.3% | |||
Gross margin adjusted by capitalization of CFC | 32.7% | 32.7% | 33.8% | 33.5% | 33.2% | |||
Operating margin | 12.2% | 12.2% | 18.2% | 14.3% | 15.0% | |||
Operating margin adjusted by capitalization of CFC | 20.5% | 20.5% | 18.9% | 19.9% | 18.9% | |||
Adjusted EBITDA margin | 22.3% | 22.3% | 22.1% | 21.8% | 22.1% | |||
Earnings per share in Ps. | 1.33 | 1.43 | 3.56 | 3.49 | ||||
Earnings per ADR presented in US$ | 0.72 | 0.64 | 1.59 | 1.56 | ||||
Weighted avge. shares outstanding (MM) | 334.7 | 334.7 | 335 | 334.7 | 334.9 | |||
Accounts receivable days | 32 | 21 | ||||||
Inventory days | 742 | 714 | ||||||
Inventory (w/o land) days | 460 | 363 | ||||||
Accounts Payable days | 111 | 101 | ||||||
WCC days | 663 | 633 | ||||||
US$ values calculated using an exchange rate of Ps.13.4567 per US$1.00 as of September 30, 2011.
(a) Net interest expense includes capitalized interest in cost of goods sold during the period.
(b) Adjusted EBITDA is not a financial measure computed under Mexican Financial Reporting Standards (MFRS). Adjusted EBITDA as derived from our MFRS financial information is net income, excluding (i) depreciation and amortization; (ii) net comprehensive financing costs ("CFC") (comprised of net interest expense (income), foreign exchange gain or loss, valuation effects of derivative instruments and monetary position 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 of 2011 and 2010.
Common share/ADR ratio: 6:1
Commenting on third quarter results, Gerardo de Nicolas, Chief Executive Officer of Homex, noted: "We are generally pleased with our quarterly results, as they reflect the effects of our cost containment program, continued gains in operating efficiencies and, importantly, the positive performance and contribution from each of our Mexico, Government and International divisions. Overall, these three divisions delivered 10.3 percent revenue growth, which is good, but still lower than our expectations for the quarter. This was mainly driven by continued, slower collections in both Mexico and Brazil. In Mexico, our operations were impacted particularly by delays with the "2X1 Subsidy Program," while in Brazil, we have continued to experience the administrative growing pains that the CAIXA is facing, as it expands its capacity under the government's subsidized housing program.
"More positively, our results do show improved profitability resulting from our ongoing administrative restructuring effort, reflected in our EBITDA margin of 22.3 percent, which is slightly above our yearly guidance of 21 to 22 percent.
"In line with the transitional trends of the Mexican housing industry, supported and promoted by the main mortgage institutions in the country (INFONAVIT and FOVISSSTE) and by the federal Housing Commission (CONAVI), we have continued to increase our participation in vertical housing construction, which today represents 38 percent of our total units under construction. Thus, we are strategically positioned to continue to benefit from the various incentive programs the Federal Government has underway to benefit homebuilders who are committed to building better planned communities.
"Finally, our results were over-shadowed by non-cash effects of the depreciation of the Mexican peso against the U.S. dollar, which had a dramatic effect on our Statement of Changes in our Financial Position, which pursuant to Mexican Financial Reporting Standards, has been historically presented as free cash flow. (see attached schedule, page 21)
"As we move into the final quarter of the year, we continue to feel confident about our performance; nonetheless, we believe it is prudent to adjust our revenue guidance for the year downward slightly to 12 to 14 percent, anticipating that it could take additional time to solve our experienced collection delays to our satisfaction."
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 2011 Results Conference Call Notice | ||
DATE: | Tuesday, October 25, 2011 | |
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: 15447927 | ||
(1) Unless otherwise noted, all monetary figures are presented in thousands of Mexican pesos and in accordance with Mexican Financial Reporting Standards (MFRS). Unless otherwise stated, figures are presented without recognizing the effects of inflation, per the application of MFRS B-10 "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, using an exchange rate of Ps. 13.4567 per US$1.00. Third quarter 2011 and 2010 financial information is unaudited and subject to adjustments.
Comparisons expressed in basis points are provided for the convenience of the reader. Basis points figures may not match, due to rounding.
CONTACTS
investor.relations@homex.com.mx
Vania Fueyo
Head of Investor Relations
+5266-7758-5838
vfueyo@homex.com.mx
SOURCE Desarrolladora Homex, S.A.B. de C.V.
