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Homex Reports 2Q13 Earnings Results



                     Homex Reports 2Q13 Earnings Results

PR Newswire

CULIACAN, Mexico, July 26, 2013

CULIACAN, Mexico, July 26, 2013 /PRNewswire/ -- Desarrolladora Homex, S.A.B.
de C.V. ("Homex" or "the Company") [NYSE: HXM, BMV: HOMEX] today announced
financial results for the Second Quarter ended June 30, 2013^^[1].

Financial and Operating Highlights

  o Total revenue for the second quarter of 2013 decreased 84.4 percent to
    Ps.1.1 billion (US$85.6 million) from Ps.7.1 billion (US$548.6 million)
    for the same period in 2012. Housing revenues were Ps.290.4 million
    (US$22.3 million), a decline of 93.4 percent compared to Ps.4.4 billion
    (US$337.5 million) during the second quarter of 2012.
  o During the quarter the Company recognized revenues of Ps.800.9 million
    (US$61.5 million) in relation to building service contracts with state and
    the federal government compared to Ps.1.6 billion (US$127.5 million)
    during the year ago period.
  o During the quarter, the Company effectively closed the transaction with
    IDEAL to sell Homex's interest in the penitentiaries projects for
    approximately Ps.4.5 billion generating an income of Ps.989.4 million
    which was registered as other income in the P&L.
  o The Company recognized a charge of Ps.5.3 billion in Costs of Good Sold
    (COGS) for land and construction-in-progress inventory as per the initial
    viability analysis performed on the Company's housing projects and land
    inventory according to the recently published rules for subsidy
    application from SEDATU.
  o For the quarter, the Company created a Ps.2.1 billion provision registered
    in Selling General and Administrative Expenses (SG&A) for uncollectable
    accounts receivable outstanding for more than 160 days from clients that
    lost their eligibility for subsidies or deteriorated their credit status,
    making collection of those receivables uncertain.
  o As per the cancellation of currency hedges in relation to Homex's Senior
    Notes due 2019 and 2020, the Company registered a loss of Ps.1.2 billion
    in Net Comprehensive Financing Cost.
  o For the six-months accumulated period, as of June 30, 2013, Homex
    generated a consolidated negative Free Cash Flow (FCF) of Ps.3.3 billion
    which was mainly driven by the negative free cash flow of Ps.7.5 billion
    without the penitentiaries projects mainly driven by the Company's
    six-months accumulated negative net income.

FINANCIAL AND OPERATING HIGHLIGHTS                           Six-months
               2Q'13                                         2013
               Thousands    2Q'13                            Thousands
Thousands of   U.S          Thousands of 2Q'12       Chg %   U.S          2013         2012         Chg %
pesos          dollars      pesos                   and bps  Dollars                               and bps
               (Convenience                                  (Convenience
               Translation)                                  Translation)
Volume (Homes) 710          710          11,154     -93.6%   6,130        6,130        19,892      -69.2%
Revenues       $85,564      $1,114,341   $7,144,214 -84.4%   $341,296     $4,444,866   $13,331,507 -66.7%
Housing        $22,297      $290,380     $4,395,960 -93.4%   $192,473     $2,506,666   $8,053,297  -68.9%
revenues
Cost           $825,758     $10,754,255  $5,065,424 112.3%   $1,028,419   $13,393,618  $9,723,088  37.8%
Capitalization
of
Comprehensive  $64,153      $835,498     $269,977   209.5%   $88,052      $1,146,739   $491,547    133.3%
Financing
Costs (CFC) 
Gross profit   -$740,194    -$9,639,914  $2,078,790 -563.7%  -$687,123    -$8,948,752  $3,608,419  -348.0%
Gross profit
adjusted for   -$676,041    -$8,804,416  $2,348,767 -474.9%  -$599,072    -$7,802,013  $4,099,966  -290.3%
capitalization
of CFC
Operating      -$927,058    -$12,073,539 $1,384,683 -971.9%  -$910,558    -$11,858,651 $2,261,645  -624.3%
income
Operating
income
adjusted for   -$862,905    -$11,238,041 $1,654,660 -779.2%  -$822,506    -$10,711,912 $2,753,192  -489.1%
capitalization
of CFC
Interest
expense, net   $76,695      $998,844     $331,928   200.9%   $102,174     $1,330,665   $669,313    98.8%
(a)
Net income     -$779,395    -$10,150,452 $567,957   -1887.2% -$772,109    -$10,055,562 $1,404,865  -815.8%
Adjusted       -$773,280    -$10,070,811 $1,733,990 -680.8%  -$727,229    -$9,471,069  $2,975,043  -418.4%
EBITDA (b)
Gross margin   -865.1%      -865.1%      29.1%      -89,418  -201.3%      -201.3%      27.1%       -22,839
Gross margin
adjusted for   -790.1%      -790.1%      32.9%      -82,298  -175.5%      -175.5%      30.8%       -20,628
capitalization
of CFC
Operating      -1083.5%     -1083.5%     19.4%      -110,285 -266.8%      -266.8%      17.0%       -28,376
margin
Operating
margin
adjusted for   -1008.5%     -1008.5%     23.2%      -103,165 -241.0%      -241.0%      20.7%       -26,165
capitalization
of CFC
Adjusted       -903.7%      -903.7%      24.3%      -92,802  -213.1%      -213.1%      22.3%       -23,539
EBITDA margin
Earnings per                -30.32       1.70       -1887.2%              -30.04       4.20
share in Ps.
Earnings per
ADR presented  -13.97                    0.78       -1887.2% -13.84                    1.93
in US$ (c)
Weighted avg.
shares         334.7        334.7        334.7               334.7        334.7        334.7
outstanding
(MM)
Accounts
receivable                  102          54                               102          54
days (d)
Inventory days              454          691                              454          691
Inventory (w/o              323          455                              323          455
land) days
Accounts                    93           155                              93           155
payable days 
Working
Capital Cycle               463          590                              463          590
(WCC) days (e)

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  land balances, that are  subsequently
charged to cost of sales and ii) income tax expense and employee statutory
profit-sharing expense. See "Adjusted EBITDA" for  a reconciliation of net
income to Adjusted EBITDA for the second quarter and six-months period of 2013
and 2012.
c)   US$ values estimated using an exchange rate of Ps.13.0235 per US$1.00 the
rate in effect as of June 30, 2013.  Common share/ADR ratio: 6:1.
d)   Accounts receivable not including receivables from the penitentiary
construction projects.
e)   WCC computation based on LTM COGS under IFRS and not including COGS and
revenues from the penitentiary construction projects.

 

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

"The second quarter of 2013 reflects the industry's structural and policies
changes which have affected Homex' operations since year end 2012.  Despite 
the complexity of the challenges that we had been facing which have translated
in legal and liquidity implications affecting our operations, we continue to
feel positive about our future prospects and more importantly we continue to
work diligently to solve Homex' current situation. The housing industry in
Mexico continues to be very attractive and we trust in the Federal
government's commitment and support for a solid and active future for the
industry and for our company.

During the quarter, we have dedicated a lot of time and effort to evaluate
Homex' financial alternatives as well as to restructure and resize our
operations to reflect current conditions with the objective of reactivating
our operations to improve our financial position.

During the quarter, we also successfully closed the transaction with IDEAL to
sell Homex' interest in the penitentiaries projects. This key operation
brought resources to Homex to reduce its liabilities.

We will continue to dedicate our efforts on progressively reactivating our
housing projects in Mexico; we have made important advances during the second
quarter of 2013 which should enable us to achieve better performance during
the following months."

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.
SECOND QUARTER 2013 RESULTS
CONFERENCE CALL NOTICE

DATE:    Friday, July 26, 2013
TIME:    9:00 AM Central Time (Mexico City)
         10:00 AM Eastern Time (New York)                 
         Gerardo de Nicolas, Chief Executive Officer
HOSTS:   Carlos Moctezuma, Vice President of Finance and Planning and Chief
         Financial Officer
         Vania Fueyo, Investor Relations Officer
         International: 706-643-5124
DIAL-IN: U.S.: 866- 887-3678
         Passcode: 13278101

Please call 10 minutes prior to start time and request the Homex call.  During
this quarter the Company will not host a Q&A session.

[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). Second quarter 2013 and 2012 figures are presented
without recognizing the effects of inflation as 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.13.0235 per US$1.00, the rate of exchange in effect on
June 30, 2013. Second quarter and first half 2013 and 2012 financial
information is unaudited and subject to adjustments.

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

Investor  Contacts

investor.relations@homex.com.mx

 

Vania Fueyo

Head of Investor Relations

+5266-7758-5838

vfueyo@homex.com.mx

 

Erika Hernandez

Investor Relations Manager

+5266-7758-5800 ext.5852

erika.hernandez@homex.com.mx

 

 

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

Website: http://www.homex.com.mx
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