MONTERREY, NUEVO LEON, MEXICO / ACCESSWIRE / October 22, 2018 / Servicios Corporativos Javer S.A.B. de C.V., (BMV: JAVER) ("Javer" or "the Company"), the largest housing development company in Mexico in terms of units sold, announces its financial results for the third quarter ("3Q18") and nine-month ("9M18") periods ended September 30, 2018. All figures presented in this report are expressed in nominal Mexican pesos (Ps.), unless otherwise stated.
- Units sold increased 6.2% to 4,546 units in 3Q18 compared to 4,281 units in 3Q17 and grew 11.1% to 14,622 units in 9M18 compared to 13,165 units sold in 9M17, mainly as a result of the 9 new projects that started titling units during the period, as well as those which started in 4Q17.
- Net Revenues increased 17.3% to Ps. 2,026.9 million in 3Q18 compared to Ps. 1,728.0 million in 3Q17 due to the improvement in the sales mix focused on the middle-income segment and to the growth in the residential segment, as well as to a higher average sale price, which increased 12.0% to Ps. 445.9 thousand in 3Q18. In 9M18, net revenues grew 20.1% to Ps. 6,288.6 million compared to Ps. 5,235.5 million in 9M17, due to the same effects presented in 3Q18, and despite the 91.7% decline in commercial lots sales. The average sale price was Ps. 429.6 thousand in 9M18, up 9.7% compared to 9M17.
- EBITDA grew 30.1% to Ps. 275.7 million in 3Q18, compared to Ps. 212.0 million in 3Q17, and increased 37.3% to Ps. 782.3 million in 9M18 from Ps. 569.8 million in 9M17, as a result of volume growth, better sales mix and higher average sale prices. As result of the same effects, EBITDA margin increased 1.3 percentage points to 13.6% in 3Q18 and 1.6 percentage points to 12.4% in 9M18, which offset the decline in gross profit of commercial lots.
- Net Result was Ps. 82.3 million in 3Q18, compared to Ps. 99.4 million in 3Q17, derived from the adjustment of the effective tax rate in 2017 (to align it with the projection of the year). For the 9M18, net result was Ps. 213.0 million, compared to Ps. 297.8 million reported in 9M17, mainly due to the FX depreciation that resulted in FX losses of Ps. 24.2 million in 9M18, while in 9M17 the Company registered Ps. 272.2 million of FX gains. Earnings per share were Ps. 0.30 in 3Q18 and Ps. 0.77 in 9M18.
- The free cash flow (FCF) in 3Q18 was Ps. (88.7) million, compared to Ps. 29.9 million in 3Q17, mainly due to a greater use of funds for land reserves acquisitions, as part of the Company's operational strategy for the period 2019 - 2020, which was announced at the beginning of the year. In 9M18, FCF ended neutral in Ps. (7.2) million, compared to Ps. 216.0 million in 9M17, due to the land investments realized during the period.
CEO STATEMENT
Mr. René Martínez, CEO of the Company commented, "I'm pleased to present the financial and operational results of the third quarter of 2018, which are within our expectation and well above those obtained during the 9-month period of 2017. Furthermore, regarding the elections in México not only at the federal level but also in most of the states in which we have presence, the democratic process was successful and without any setbacks, therefore our production and commercial processes continued without disruption.
During the quarter, we started to title units in 5 projects, most of them focused on the middle and residential segments, with which we continue to consolidate the improvement in the sales mix. In addition to the above, the 5 projects that we started in the first half were consolidated and the sale price of each prototype was increased, which drove revenues to be higher by 17.3%, despite not having commercial lots sales in the period, while $23.0 million was recognized in 3Q17 for this type of sales.
Additionally, the subsidy program continued operating throughout the quarter, the subsidized units represented 38.4% of the total, 65.6% higher than the 1,053 units that were sold with a subsidy during the same period of 2017. As of today, 68.9% of the annual budget has been consumed and the program is expected to run out during the month of October of this year.
Moreover, the inertia due to the change in product offering aim at maintaining a mix oriented to the middle and residential sectors led to a surplus in gross profit and margin from the sale of homes, as presented in the first two quarters of the year. This operating improvement is reflected in the increase shown in the main financial indicators that have the highest performance in recent years, as observed in the EBITDA, which increased 37.3% to Ps. 782.3 million in the 9M18 This result also influenced the credit enhancement by the rating agency Moody's, from the rating "B2" on a global scale to "B1" with outlook positive.
It is important to mention that at the beginning of the year we announced that during 2018 we would make a strong investment in land reserves for the continuity of the Company's strategy for 2019 and subsequent years, which has caused the free cash flow to be negative by $88.7 million in the third quarter and was practically neutral for the nine-month period ended September 30, 2018.
Regarding our projects, by the end of the year, we will have 8 new projects, 6 of them focused on the middle-income segment and the rest on the residential segment. We will be inaugurating our first two developments in Playa del Carmen, Quintana Roo, which is part of our expansion strategy in the locality, since initially we only had projects in Cancun, and we intend to consolidate and gain market share.
At the end of the third quarter of 2018, our market share in Infonavit's loans for new housing is 9.6%, which represents 9.9% more than the previous year and taking into account loans for used and new housing, our market share is 5.0%.
Regarding the capital structure, we are analyzing different options to refinance our debt, which should allow us to optimize costs and term conditions, of which we will be informing later on.
Finally, we maintain our guidance commented in the conference of the second quarter of an increase of at least 7.5% in EBITDA, coming from 5% to 7.5% confirmed at the beginning of the year, and we reiterate our double-digit growth in revenues while ending free cash flow neutral".
For a full version of this earnings release with financial statements, go to: http://www.javer.com.mx/investors.php
Veronica Lozano, Gerente de Relación con Inversionistas
Tel. +52 (81) 1133-6699 Ext. 6515
vlozano@javer.com.mx
SOURCE: Servicios Corporativos Javer S.A.B. de C.V.
View source version on accesswire.com:
https://www.accesswire.com/526028/Javer-Announces-Growth-in-Volume-Revenues-and-EBITDA-in-3Q18-and-9M18
