Homex Posts Second-Quarter Loss on Property Write-Off
(Corrects size of loss in first paragraph in story that ran July 26.)
Desarrolladora Homex SAB (HOMEX*), Mexico’s biggest homebuilder by 2012 revenue, posted a 10.2 billion peso ($809 million) quarterly loss as sales plunged and the company wrote down properties whose value fell after changes in government housing policy.
The loss for the second quarter compared with a profit of 568 million pesos a year earlier, Culiacan, Mexico-based Homex said in a filing after markets closed yesterday. The average estimate of four analysts in a Bloomberg survey was for a loss of 29 million pesos. Revenue fell 84 percent to 1.1 billion pesos.
The company took a charge of 5.3 billion pesos in the quarter after carrying out an “initial feasibility analysis” of housing developments and land reserves based on new government rules.
Homex and competitors Corp. Geo SAB (GEOB) and Urbi Desarrollos Urbanos SAB (URBI*) have hired advisers to restructure debt as they face losses on land reserves far from city centers. The government shifted housing subsidies to favor apartment construction in urban areas.
The results were “materially weak,” Deutsche Bank AG analysts Esteban Polidura and Daniela Najar wrote in a note to clients. The analysts said the earnings report showed “complete distress” and boost the chances the company will seek bankruptcy protection or a moratorium with creditors.
Homex investor relations official Vania Fueyo declined to comment on the Deutsche Bank report.
Gerardo de Nicolas, Homex’s chief executive officer, said in the filing that the results reflect “the industry’s regulatory and structural changes.”
Geo and Urbi said yesterday they would miss the stock exchange’s scheduled deadline this week for reporting second-quarter results.
To contact the editor responsible for this story: David Papadopoulos at firstname.lastname@example.org