Homex Reports 1Q13 Earnings Results PR Newswire CULIACAN, Mexico, April 25, 2013 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. Financial Highlights oTotal 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. oIn 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. oAs 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. oAdjusted 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$100.4 million) during the same period in 2012. Adjusted EBITDA margin for the recent quarter was 18.0 percent compared to 20.1 percent during the same period of 2012. Adjusted EBITDA margin for housing was 20.2 percent during the first quarter of 2013 compared to 24.2 percent during the same period of 2012. oAs of March 31, 2013, and as a result of the accumulative FX gain of the Peso against the US dollar, the Company's changes in financial position (which the Company has historically presented as Free Cash Flow), reflect the booking of non-cash items. As of March 31, 2013 and on a consolidated basis, Homex generated negative FCF of Ps.3.2 billion which was driven by the increase in the construction in progress from Mexico's housing division and to a lesser extent from the recognition of the construction in progress (as AR) from the penitentiary project of Morelos. Homex FCF without the Federal Penitentiary and adjusted for FX was negative at Ps.3.0 billion.  Unless otherwise noted, all monetary figures in the tables are presented in thousands of Mexican pesos and in accordance with International Financial Reporting Standards (IFRS). First quarter 2013 and 2012 figures are presented without recognizing the effects of inflation per the application of IAS-29 "Effects of inflation." The symbols "Ps." and "$" 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 1Q'13 Thousands U.S 1Q'13 Chg % and Thousands of pesos dollars Thousands of 1Q'12 bps (Convenience pesos Translation) 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 $25,192 $311,241 $221,570 40.5% (CFC) Gross profit $55,944 $691,162 $1,529,629 -54.8% Gross profit adjusted for $81,136 $1,002,403 $1,751,199 -42.8% capitalization of CFC Operating income $17,393 $214,888 $876,962 -75.5% Operating income adjusted for $42,586 $526,129 $1,098,532 -52.1% capitalization of CFC 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 $1,241,053 -51.7% Gross margin 20.8% 20.8% 24.7% -397 Gross margin adjusted for 30.1% 30.1% 28.3% 179 capitalization of CFC Operating margin 6.5% 6.5% 14.2% -772 Operating margin adjusted for 15.8% 15.8% 17.8% -196 capitalization of CFC Adjusted EBITDA margin 18.0% 18.0% 20.1% -205 Adjusted EBITDA margin 20.2% 20.2% 24.2% -405 Homebuilding (c) Net Income margin adjusted 2.2% 2.2% 7.7% -553 for FX Earnings per share in Ps. 0.28 2.50 -88.7% Earnings per share in Ps. 0.22 1.43 -84.8% adjusted for FX Earnings per ADR presented in 0.14 1.21 -88.7% US$ (d) Earnings per ADR presented in 0.11 0.69 -84.8% US$ adjusted for FX Weighted avg. shares 334.7 334.7 334.7 outstanding (MM) 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) 727 621 days (g) 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 andChief 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. Website: http://www.homex.com.mx/ri/index.htm Contact: INVESTOR CONTACTS, firstname.lastname@example.org; Vania Fueyo, Head of Investor Relations, +5266-7758-5838, email@example.com, or Erika Hernandez, Investor Relations Manager, +5266-7758-5800 ext.5852, firstname.lastname@example.org
Homex Reports 1Q13 Earnings Results
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