MONTERREY, NUEVO LEON, MEXICO / ACCESSWIRE / February 7, 2019 / 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 fourth quarter ('4Q18') and twelve-month ('12M18') periods ended December 31, 2018. All figures presented in this report are expressed in nominal Mexican pesos (Ps.), unless otherwise stated.
- Units sold increased 1.1% to 18,962 units in 12M18 from 18,750 units in 12M17. In 4Q18, units sold decreased 22.3% to 4,340 units compared to 5,585 units in 4Q17, since the number of units sold in the projects that started operations during 4Q17 was higher than the units titled in the projects that opened during 4Q18.
- Net Revenues increased 10.0% to Ps. 8,321.1 million in 12M18 compared to Ps. 7,563.0 million in 12M17 mainly due to improvements in the product mix and the increase in the average sales price. In 4Q18, net revenues were Ps. 2,032.5 million, 12.7% below the Ps. 2,327.5 million reported in 4Q17, as a result of the decline in volume.
- EBITDA grew 11.0% to Ps. 1,061.7 million in 12M18 compared to Ps. 956.1 million in 12M17, derived from a better sales mix, volume growth and higher prices. EBITDA decreased 27.7% to Ps. 279.3 million in 4Q18 from Ps. 386.3 million in 4Q17 mainly due to the volume contraction, higher expenses for personnel severance due to workforce reductions that were made to prepare the Company for 2019 according to the market conditions, as well as expenses incurred in Javer's ongoing debt refinancing process.
- Net Result was Ps. 230.6 million in 12M18 compared to Ps. 441.6 million in 12M17, due to the FX gain of Ps. 243.4 million recorded in 12M17. In 4Q18, the net result was Ps. 17.6 million compared to Ps. 143.8 million in 4Q17, mainly due to the decrease in volume and Ps. 67.2 million in FX losses. Earnings per share reached Ps. 0.06 in 4Q18 and Ps. 0.83 in 12M18.
- The free cash flow (FCF) was Ps. (263.2) million in 12M18 compared to Ps. 470.9 million in 12M17, mainly from greater disbursements made for the acquisition of land reserves and for the use of additional working capital to start operations in the acquired properties. The same effect was presented in 4Q18 with a FCF of Ps. (256.0) million compared to Ps. 255.0 million in 4Q17.
CEO STATEMENT
Mr. René Martínez, CEO of the Company commented, "As always, we are very pleased to have this opportunity to connect with you and present the 2018 financial and operational results, which were higher than our guidance provided at the beginning of the year and with respect to 2017. Our revenues grew 10.0%, while our gross margin from the sale of homes and EBITDA increased 13.0% and 11.0%, respectively, despite a decrease in commercial lot sales.
In the twelve-month period ended December 31, 2018, 17 projects were opened, 10 of them focusing on the middle-income segment and 7 of them in the residential segment, which helped us to consolidate the improvement in the sales mix and achieve favorable results. At the end of 2018, our market share in the INFONAVIT loans system for new housing was 9.3%, which represents 4.9% more than in 2017; taking into account the loans for the acquisition of new and used housing, our market share reached 4.8% nationwide.
As projected in previous quarterly reports, land reserve acquisitions in 2018 totaled an investment of more than Ps. 1.0 billion, 34.2% more than the disbursements made during 2017. This investment is only exceeded by the one made in 2014, when we decided to change our product mix strategy and migrate our land reserves to properties oriented towards the middle-income and residential segments. This strategy has been paying off ever since, reflected in increases across practically all our annual financial figures.
The year 2019 will undoubtedly bring many changes and challenges. Our industry is not the exception which is why we have initiated an austerity and expense reduction plan that will help us maintain an optimal structure according to market conditions. The first two quarters of 2019 will be the most affected in terms of units sold, since the subsidy program will no longer be available. We will also see the effects on working capital due to the start-up of 23 new projects in the land reserves that were acquired during 2018; 17 of them during the first half of 2019 and the remaining 6 projects during the third and fourth quarters. These effects will be reversed in the second half of the year as we will begin to title units in these projects.
Furthermore, it is also important to point out that Infonavit recently announced it is working on implementing measures to increase the total number of loans for workers with a monthly wage up to 2.8 UMAs to offset the effect of the lack of subsidies and support those who need the funding most.
On the other hand, we continue analyzing different options for refinancing the Company's debt, with the goal of optimizing costs and terms. In order to maintain the financial prudence that has distinguished us, in the first days of January of 2019 we decided to expand our hedging strategy, including 100% of the principal and 100% of the following three coupon payments, which leaves us without exposure to fluctuations in the Mexican peso against the dollar.
In closing, our goal for 2019 will be to maintain a level of revenues consistent with those registered in 2018, albeit with lower unit volume while improving our sales mix, with growth between 2.5% to 5.0% in EBITDA, and positive free cash flow."
For a full version of this earnings release with financial statements, go to: http://www.javer.com.mx/investors.php.
Contact:
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.
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