JAVER REPORTS SOLID GROWTH IN REVENUES AND FCF GENERATION FOR 4Q16 AND FY16
16 Febrero 2017 - 3:32PM
BMV General Information
MONTERREY, NUEVO LEON, MEXICO - FEBRUARY 16, 2017 - SERVICIOS
CORPORATIVOS JAVER S.A.B. DE C.V., (BMV: JAVER) ("JAVER" OR "THE
COMPANY"), ONE OF THE LARGEST HOUSING DEVELOPMENT COMPANIES IN
MEXICO, TODAY ANNOUNCED FINANCIAL RESULTS FOR THE FOURTH QUARTER
("4Q16") AND FULL YEAR ("FY16") PERIODS ENDED DECEMBER 31, 2016.
ALL FIGURES PRESENTED IN THIS REPORT ARE EXPRESSED IN NOMINAL
MEXICAN PESOS (PS.), UNLESS OTHERWISE SPECIFIED.
4Q16 AND FY16 HIGHLIGHTS:- UNITS SOLD DECREASED 1.5% TO 4,801 UNITS
IN 4Q16, COMPARED TO 4,874 UNITS IN 4Q15. A TOTAL OF 18,352 UNITS
WERE SOLD IN FY16, A 1.1% DECLINE COMPARED TO 18,565 UNITS IN FY15.
THE DECLINE WAS MOSTLY DRIVEN BY PERMITTING DELAYS FOR PROJECTS IN
NUEVO LEON, JALISCO AND QUINTANA ROO, WHICH HAD BEEN EXPECTED TO
DELIVER UNITS DURING THE SECOND HALF OF 2016.
- NET REVENUES INCREASED 3.2% TO PS.1,932.3 MILLION IN 4Q16 FROM
PS. 1,872.5 MILLION IN 4Q15 AND ROSE 9.2% TO 7,051.9 MILLION IN
FY16 FROM PS. 6,458.9 MILLION IN FY15. THE GROWTH IN BOTH PERIODSIS
EXPLAINED BY A HIGHER AVERAGE SALES PRICE (UP 4.7% TO PS. 380
THOUSAND IN 4Q16 AND 11.3% TO PS. 374 THOUSAND IN FY16) RESULTING
FROM A SALES MIX FOCUSED IN MIDDLE INCOME AND A HIGHER PROPORTION
OF RESIDENTIAL REVENUES.
- EBITDA DECREASED 26.3% TO PS. 271.0 MILLION IN4Q16 FROM PS. 367.8
MILLION IN 4Q15 AND DECLINED 1.8% TO PS. 920.2 MILLION IN FY16 FROM
PS. 937.5 MILLION IN FY15; PRIMARILY AFFECTED BY THE ABSENCE OF ANY
LARGE BULK SALES OF COMMERCIAL LOTS DURING THE PERIOD AS COMPARED
TO 4Q15.
- NET RESULT WAS PS. (114.9) MILLION IN 4Q16 COMPARED TOPS. 222.0
MILLION IN 4Q15, AS A RESULT OF A PS. 175.9 NON-CASH CHARGE FOR FX
LOSSES REGISTERED DURING THE QUARTER. FOR FY16, NET RESULT WAS PS.
(464.1) MILLIONCOMPARED TO PS. (306.3) MILLION IN FY15, PRIMARILY
DUE TO THE PS. 376.8 IN COSTS INCURRED FROM THE TENDER OFFER FOR
THE COMPANY'S 2021 NOTES EXECUTED IN 1Q16;ALONG WITH PS. 392.8
MILLION IN FX LOSSES, AS THE PESO DEPRECIATED 19.2% YOY. NET INCOME
(LOSS) PER SHARE WAS PS. (1.69) AS OF DECEMBER 31, 2016 COMPARED TO
PS.(1.67) AS OF DECEMBER 31, 2015.
- POSITIVE FCF OF PS. 143.3 MILLION WAS POSTED IN 4Q16, A DOUBLE
DIGIT GROWTH OF 79.0%, COMPARED TO PS. 80.0 MILLION REGISTERED IN
4Q15. THE COMPANY MORE THAN DOUBLED ITS FCF GENERATION IN FY16 TO
PS. 527.9 MILLION FROM PS. 230.3 MILLION IN FY15. THIS GROWTH WAS
DRIVEN BY THE COMPANY'S INVENTORY CONTROL STRATEGY, ENHANCED
COLLECTION PROCESSES AND LOWER INTEREST EXPENSES DUE TO THE
DE-LEVERAGING OF ITS BALANCE SHEET WITH THE IPO PROCEEDS.
- DIVIDENDS: ON APRIL 29, 2016, OUR GENERAL SHAREHOLDERS' MEETING
APPROVED A DIVIDEND PAYMENT OF PS. 1.7053 PER SHARE, IN ACCORDANCE
WITH THE PARAMETERS OF THE COMPANY'S DIVIDEND POLICY. THE DIVIDEND
WAS PAID IN 4 INSTALLMENTS FOR A TOTAL OF PS. 475 MILLION. THE
FIRST THREE INSTALLMENTS, EACH EQUIVALENT TO PS. 0.26 PER SHARE,
WERE PAID ON MAY 18, JULY 19 AND OCTOBER 18 OF LAST YEAR. THE
FOURTH INSTALLMENT OF PS. 0.9253 PER SHARE WAS PAID ON JANUARY 23,
2017. ALL DIVIDEND PAYMENTS WERE TOTALLY FUNDED WITH THE COMPANY'S
FREE CASH FLOW GENERATION.CEO STATEMENT
MR. RENE MARTINEZ, JAVER'S CHIEF EXECUTIVE OFFICER COMMENTED, "OUR
HOUSING BUSINESS CONTINUED TO PERFORM WELL DURING THE 4TH QUARTER
DESPITE THE CONTINUED HEADWINDS OF A STOP-AND-GO SUBSIDY
DISBURSEMENT MECHANISM AND LITTLE VISIBILITY WITH REGARDS TO
OVERALL POLICY FOR 2017. NOTWITHSTANDING THESE EFFECTS, AND THE
PERMITTING DELAYS IN 3 DEVELOPMENTS, WHICH SHOULD HAVE DELIVERED
UNITS BY THE SECOND HALF OF 2016, THE HOUSING BUSINESS FOR THE FULL
YEAR DELIVERED MORE THAN 10% GROWTH IN GROSS PROFIT, DRIVEN
PRIMARILY BY OUR DELIBERATE CHANGE IN SALES MIX TOWARDS THE MIDDLE
INCOME SEGMENT. EBITDA FOR THE QUARTER WAS AFFECTED BY THE ABSENCE
OF ANY SIGNIFICANT BULK SALES OF COMMERCIAL LOTS AS THE MARKET
ADJUSTS TO THE NEW NORMAL IN CAP RATES DERIVED FROM THE RECENT
MOVES IN GLOBAL INTEREST RATES. THE UNCHARACTERISTICALLY LOW MARGIN
ON COMMERCIAL LOT SALES FOR THE 4Q IS MAINLY EXPLAINED BY A LAND
SWAP MADE WITH A THIRD PARTY, WHERE WE PAID FOR A NEW LAND RESERVE
WITH EXCESS LAND FROM AN EXISTING RESERVE AT LITTLE TO NO MARGIN.
FINALLY, OUR CONTINUED EMPHASIS ON WORKING CAPITAL CONTROLS ALLOWED
US TO FINISH THE YEAR WITH A VERY STRONG FREE CASH FLOW GENERATION
OF OVER PS. 527 MILLION, WHICH WAS MORE THAN ENOUGH TO FUND OUR
SUBSTANTIAL DIVIDEND PAYMENT EVEN AFTER THE REPLENISHMENT AND
UPGRADING OF OUR LAND RESERVES.
ON THE HOUSING POLICY SIDE, THERE WERE SEVERAL DEVELOPMENTS DURING
THE LAST MONTHS OF THE YEAR. FIRST OF ALL, THE 2017 SUBSIDY BUDGET
WAS SET AT PS. 6.5 BILLION WITH AN EXPECTED TARGET OF PS. 4.8
BILLION FOR NEW HOUSING,A DECLINE OF APPROXIMATELY 33% COMPARED TO
THE 2016 BUDGET. THE FORMAL OPERATING RULES FOR 2017 WERE ANNOUNCED
LAST WEEK. WITH THESE NEW RULES. SUBSIDIES WILLNOW BE FOCUSED MORE
INTENSIVELY ON THE LOWER END OF THE SALARY SCALE (