GENTERA S.A.B. DE C.V. (GENTERA OR THE COMPANY) (BMV: GENTERA*) ANNOUNCED
24 Octubre 2017 - 3:05PM
BMV General Information
GENTERAREPORTS 3Q17 RESULTS
MEXICO CITY, MEXICOOCTOBER 24, 2017 GENTERA S.A.B. DE C.V. (GENTERA
OR THE COMPANY) (BMV: GENTERA*) ANNOUNCED TODAY NON-AUDITED
CONSOLIDATED FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED
SEPTEMBER 30, 2017. ALL FIGURES WERE PREPARED IN ACCORDANCE WITH
REQUIREMENTS FROM THE NATIONAL BANKING AND SECURITIES COMMISSION
(CNBV) AND ARE EXPRESSED IN NOMINAL MEXICAN PESOS (PS.)
3Q17 HIGHLIGHTS:
TOTAL LOAN PORTFOLIO REACHEDPS. 31,221 MILLION, A 2.0% CONTRACTION
COMPARED WITH 3Q16. LOAN PORTFOLIO PER SUBSIDIARY WAS DISTRIBUTED
AS FOLLOWS:
BANCO COMPARTAMOS S.A. I.B.M. (MEXICO) (BANCO COMPARTAMOS) REACHED
PS. 22,689 MILLION, A 7.8% CONTRACTION VERSUS THE FIGURE RECORDED
IN 3Q16.
COMPARTAMOS FINANCIERA (PERU) STOOD AT PS. 8,033 MILLION, AN 18.4%
INCREASE VS. 3Q16; AND,
COMPARTAMOS S.A. (GUATEMALA) WAS PS. 499MILLION, 5.0% HIGHER
COMPARED TO 3Q16.
WITH OVER 1.3 MILLION DEBIT ACCOUNTS, DEPOSITS FROM CLIENTS IN
BANCO COMPARTAMOS STOOD AT PS. 1,454 MILLION, WHICH WERE GENERATED
FROM DEMAND AND TIME DEPOSITS, GROWING CLOSE TO 6 TIMES COMPARED TO
THE PS.253 MILLION REACHED AT THE END OF 3Q16.
NET INCOME FOR THE SECOND QUARTER WAS PS. 750 MILLION, AN 18.3%
CONTRACTION COMPARED TO THE NET INCOME OF PS.918 MILLION ACHIEVED
IN 3Q16. EARNINGS PER SHARE (EPS) IN 3Q17 STOOD AT $0.46.NET
INTEREST INCOME FOR 3Q17 WAS PS. 4,909 MILLION, A SLIGHT 0.1%
INCREASE COMPARED TO THE SAME PERIOD LAST YEAR, WHILE NIM STOOD AT
55.1%,COMPARED TO 57.2% IN 3Q16.
ROE STOOD AT 18.2%, COMPARED TO 24.8% DURING 3Q16. FOR THE
NINE-MONTH PERIOD 2017, IT STOOD AT 20.6%.
ROA REACHED 7.3%, COMPARED TO 9.3% IN 3Q16. FOR THE NINE-MONTH
PERIOD2017, IT STOOD AT 8.3%.
NON-PERFORMING LOANS (NPLS) FOR 3Q17 WERE 4.18%, COMPARED TO 3.33%
IN 3Q16. EFFICIENCY RATIO FOR 3Q17 WAS 74.5%, COMPARED TO 68.2%
REPORTED IN 3Q16. FINANCIAL RESULTS AND RATIOS1) 3,193,216 CREDIT
CLIENTS AND 569,263 CLIENTS FROM SAVINGS, REMITTANCES AND INSURANCE
PRODUCTS.
PORTFOLIO AND NET INCOME ARE EXPRESSED IN MILLION (MEXICAN
PESOS)
IN THIS TABLE EMPLOYEES IN BANCO COMPARTAMOS INCLUDE EMPLOYEES FROM
ATERNA, YASTAS AND INTERMEX.
** SOME SERVICE OFFICES IN MEXICO ARE BEING TRANSFORMED INTO
BRANCHES.
COMMENTS FROM MR. ENRIQUE MAJS, GENTERAS CEO:
GENTERA CONCLUDEDTHE THIRD QUARTER OF THE YEAR SERVICING OVER 3.7
MILLION CLIENTS, THROUGH A NETWORK OF 632 SERVICE OFFICES AND 256
BRANCHES, AND WITH A STAFF OF OVER 21 THOUSAND EMPLOYEES
DISTRIBUTED THROUGHOUT MEXICO, PERU AND GUATEMALA, ALL FULLY
COMMITTED TO THE COMPANYS PURPOSE OF ERADICATING FINANCIAL
EXCLUSION.AT THE END OF SEPTEMBER 2017, GENTERAS FINANCIAL
SUBSIDIARIES EXPERIENCED A SLIGHT CONTRACTION IN ITS CREDIT
PORTFOLIO; HOWEVER, OTHER STRATEGIC INITIATIVES SHOWED IMPORTANT
PROGRESS SUCH AS OUR DEPOSIT PROGRAM IN MEXICO WHICH REACHED MORE
THAN 1.3 MILLION DEBIT ACCOUNTS, A KEY ELEMENT IN BANKING MORE
CLIENTS AND BUILDING LONG TERM RELATIONSHIPS. ATERNA, YASTAS AND
INTERMEX CONTINUED TO RECORD SOLID PERFORMANCE. ATERNA CONCLUDED
THE THIRD QUARTER WITH APPROXIMATELY 5 MILLION ACTIVE LIFE
INSURANCE POLICIES; YASTAS RECORDED NEARLY 1.9 MILLION FINANCIAL
TRANSACTIONS, A SOLID GROWTHOF 43% COMPARED TO 3Q16; AND INTERMEX,
PROCESSED OVER 5,700 MILLION PESOS DURING THE QUARTER.
OUR INNOVATION LAB, FIINLAB, CONTINUED ITS FOCUS ON DEVELOPING NEW
TECHNOLOGICAL PLATFORMS AND MAKING ALLIANCES WITH INNOVATION HUBS
THAT SHARE OUR MISSION AND THAT WILL HELP GENTERA TO BETTER SERVE
THE CURRENT AND FUTURE FINANCIAL NEEDS OF OUR CLIENTS.
AT GENTERA WE ARE STRONGLY MOTIVATED AND ENTHUSIASTICIN WHAT THE
FUTURE WILL BRING FOR OUR CLIENTS AND FOR THE COMPANY; IN COMING
YEARS WE WILL CONTINUE OUR TRAJECTORY OF GROWTH AND DISCIPLINE IN
ORDER TO SUCCESSFULLY ACHIEVE OUR LONG-TERM ASPIRATION OF SERVICING
MORE THAN 10 MILLION CLIENTS BY 2025. WE DEEPLY BELIEVE THAT BY
CREATING VALUE FOR THE CUSTOMERS WE WILL CREATE SHARED VALUE FOR
THE DIFFERENT STAKEHOLDERS.
3Q17 ANALYSIS & RESULTS OF OPERATIONS* PORTFOLIO AND NET INCOME
ARE EXPRESSED IN MILLION (MEXICAN PESOS)
** IN THIS TABLE EMPLOYEES IN BANCO COMPARTAMOS INCLUDE EMPLOYEES
FROM ATERNA, YASTAS AND INTERMEX.COMPARTAMOS FINANCIERA (PERU) IS
REPORTED UNDER MEXICAN GAAP (ALL FIGURES IN MILLION PESOS).INCOME
STATEMENT
THE FOLLOWING FINANCIAL RESULTS ANALYSIS IS DONE WITH CONSOLIDATED
FIGURES. THE PERCENTAGE COMPARISONS ARE CALCULATED FOR THE THIRD
QUARTER 2017 VERSUS THE THIRD QUARTER 2016, UNLESS OTHERWISE
SPECIFIED. THE READER MUST TAKE INTO CONSIDERATION THE FX MOVEMENTS
IN THE COMPARISON PERIODS.
INTEREST INCOME IN 3Q17 WAS PS. 5,291 MILLION A 1.5% INCREASE
COMPARED TO 3Q16, DRIVEN BYTHE REPRICING INITIATIVE OF ITS CREDIT
PRODUCTS WHICH STARTED DURING THE FIRST QUARTER OF 2017 AND IS NOW
CAPTURING MORE BENEFITS OF THIS INITIATIVE. THE INTEREST INCOME
GENERATED YEAR TO DATE WAS PS. 15,632, 6.6% HIGHER THAN THE
INTEREST INCOME GENERATED IN THE SAME PERIOD OF 2016.BANCO
COMPARTAMOS REPRESENTS MOST OF GENTERAS CURRENT PORTFOLIO AND
INTEREST INCOME, WITH 72.7% AND 84.7%, RESPECTIVELY.
GENTERAS THREE MAIN SUBSIDIARIES GRANT LOANS WITH DIFFERENT AVERAGE
OUTSTANDING BALANCES PER CLIENT (PS.8,532 FOR BANCO COMPARTAMOS,
PS. 17,994 FOR COMPARTAMOS FINANCIERA AND PS. 5,695 FOR COMPARTAMOS
GUATEMALA). THESE VARIATIONS IN TICKET SIZE ARE RELATED TO THESHARE
OF THE GROUP LENDING OR INDIVIDUAL LENDING PRODUCTS IN THEIR
RESPECTIVE PORTFOLIO. THE YIELD FOR GENTERAS PORTFOLIO STOOD AT
67.8%.GENTERAS INTEREST EXPENSE INCREASED TO PS. 382 MILLION, OR
24.0%, COMPARED TO 3Q16. THIS INCREASE REFLECTS THE EFFECTOF THE
REFERENCE INTEREST RATE ADJUSTMENT IN MEXICO, WHICH HAS INCREASED
325 BPS TO 7.0% FROM JUNE 2016 TO SEPTEMBER 2017.THE FUNDING COST
OF BANCO COMPARTAMOS IN MEXICO, WHICH INCLUDES WHOLESALE FUNDING
AND DEPOSITS, STOOD AT 7.21% IN 3Q17 COMPARED TO 4.94% IN 3Q16.
INTEREST EXPENSES AT THIS SUBSIDIARY ROSE 31.1% TO PS. 278 MILLION,
COMPARED TO PS. 212 MILLION IN 3Q16. AT THE END OF THE QUARTER
45.6%OF BANCO COMPARTAMOS LIABILITIES (CONSIDERING INTERBANK
LIABILITIES AND LONG-TERM DEBT ISSUANCES) WERE CONTRACTED AT A
FIXED RATE.COMPARTAMOS FINANCIERA IN PERU INCREASED ITS INTEREST
EXPENSES BY 14.5% TO PS. 110 MILLION VERSUS 3Q16, WHICH IMPLIES A
SMALLER GROWTHCOMPARED TO THE 23.9% GROWTH MARK IN THE LIABILITIES
USED TO FUND THE PORTFOLIO. THIS WAS POSSIBLE THANKS TO BETTER
TERMS AND CONDITIONS IN CREDIT LINES AND IMPROVEMENTS IN THE
REFERENCE INTEREST RATE, WHICH IS NOW MOVING AT 3.5% COMPARED TO
4.25% AT THE END OF SEPTEMBER 2016. COST OF FUNDING, IT STOOD AT
6.2% COMPARED TO 7.0% IN 3Q16.
GENTERAS NET INTEREST MARGIN (NIM) FOR THE THIRD QUARTER 2017
REACHED 55.1%, AN IMPROVEMENT COMPARED TO THE 54.0% ACHIEVED IN
2Q17, AND 2.1 POINTS BEHIND THE 57.2% REACHED IN 3Q16.PROVISIONS
FOR LOAN LOSSES REACHED PS. 861 MILLION DURING THE QUARTER. THIS
AMOUNT WAS PS. 14 MILLION, OR 1.7% HIGHER COMPARED TO 3Q16. THIS
EFFECT IS IN LINE WITH THE EVOLUTION OF THE PORTFOLIO MIX WHICH IS
COMPRISED OF DIFFERENT RISK PROFILE PRODUCTS. PROVISIONS ARE IN
ACCORDANCE WITH NEW CNBV REGULATIONS AND METHODOLOGIES, REFLECTING
THE LEVEL REQUIRED FOR EACH PRODUCT.
NII AFTER PROVISIONS ROSE TO PS. 4,048 MILLION, A SLIGHT
CONTRACTION OF 0.2% COMPARED TO PS. 4,058 MILLION IN 3Q16. AS
PREVIOUSLY MENTIONED, THE MEXICAN SUBSIDIARY, BANCO COMPARTAMOS,
IMPLEMENTED A GROWTH CONTROL STRATEGY WITH THE PURPOSE OF
STABILIZING ASSET QUALITY. THIS STRATEGY HAS IMPACTED THE POTENTIAL
GROWTH OF THE PORTFOLIO AND, THUS, THE GENERATION OF INTEREST
INCOME TO A GREATER EXTENT.NIM AFTER PROVISIONS (NII AFTER
PROVISIONS FOR LOSSES / AVERAGE YIELDING ASSETS) FOR 3Q17 WAS
45.5%, COMPARED TO 47.3% IN 3Q16. THE MARGIN CONTRACTION IN 4Q16
AND 1Q17 IS DUE TO: I) THE HIGHER FUNDING COST; AND II) HIGHER COST
OF RISK. THESE IMPACTS HAVE NOWBEEN MITIGATED BY THE RE-PRICING
INITIATIVE THAT BANCO COMPARTAMOS STARTED IN ITS CREDIT PRODUCTS
DURING THE FIRST QUARTER.
THE NET EFFECT BETWEEN COMMISSIONS CHARGED AND COMMISSIONS PAID IN
3Q17 REACHED A TOTAL OF PS. 246 MILLION, AN INCREASE OF PS. 59
MILLION, OR 31.6%, COMPARED TO THE NET EFFECT OBTAINED IN 3Q16 OF
PS.187 MILLION, AND IS EXPLAINED AS FOLLOWS:
COMMISSIONS AND FEE INCOME DURING THEQUARTER CONTRACTED 5.2% TO PS.
346 MILLION, COMPARED TO 3Q16. THIS LINE ITEM MAINLY REFLECTED: I)
LATE PAYMENT FEES CHARGED TO CLIENTS WITH DELINQUENT LOANS ATBANCO
COMPARTAMOS; II) FEES GENERATED AT YASTAS, ATERNA AND INTERMEX; AND
III) COMMISSIONS GENERATED AT COMPARTAMOS FINANCIERA. THE FOLLOWING
TABLE SHOWS CONSOLIDATED NUMBERS OF THE DIFFERENT
SUBSIDIARIES.COMMISSIONS AND FEE EXPENSES DURING THE QUARTER
CONTRACTED 43.8%, OR PS. 78 MILLION, TO PS. 100 MILLION COMPARED TO
3Q16. THE MAINREASON FOR THIS CONTRACTION IN EXPENSES HAS TO DO
WITH THE FACT THAT A GREATER NUMBER OF BANCO COMPARTAMOS
DISBURSEMENTS AND COLLECTION OPERATIONS OF ITS CREDITS ARE BEING
EXECUTED IN GENTERAS CHANNELS, REPRESENTING, AT THE END OF
SEPTEMBER 17, 79% AND 47% RESPECTIVELY. THIS LINE ITEM INCLUDED: I)
FEES CHARGED BY THIRDPARTIES TO BANCO COMPARTAMOS FOR THE USE OF
THEIR NETWORKS; AS WELL AS, II) FEES RELATED TO THE OPERATION OF
YASTAS AND INTERMEX. THE FOLLOWING TABLE SHOWS CONSOLIDATED NUMBERS
OF THE DIFFERENT SUBSIDIARIES.TRADING GAINS/LOSSES RECORDED A
PROFIT OF PS. 3 MILLION DURING THE QUARTER. THIS LINE ITEM
REPRESENTED THE FX PROFITS IN THE INTERMEX-BANCO
COMPARTAMOSBRANCHES.
OTHER OPERATING INCOME/EXPENSES DURING 3Q17 REPRESENTED AN EXPENSE
OF PS. (50) MILLION. THIS ITEM REFLECTED NON-RECURRING INCOME OR
EXPENSES, WHICH FOR THE THIRD QUARTER WERE PRIMARILY DRIVEN BY A
PROVISION LINKED TO THE FEES OF DELINQUENT ACCOUNTS AND BY
DONATIONS.
OPERATING EXPENSES REACHED PS. 3,164 MILLION, A 16.1% INCREASE
VERSUS THE PS. 2,725 MILLION REACHED IN 3Q16.
GENTERAS SUBSIDIARIES JOINTLY TOTALED 21,860 EMPLOYEES, AN INCREASE
OF 2.9% COMPARED TO 3Q16, DUE TO THE GROWTH IN NUMBER OF EMPLOYEES
IN THE PERUVIAN AND GUATEMALAN SUBSIDIARIES. THE NEW HIRES ARE
REQUIRED TO SERVE CURRENT AND FUTURE CUSTOMERS.SALARIES AND
BENEFITS REPRESENTED APPROXIMATELY PS. 1,973 MILLION, OR 62.4% OF
TOTAL OPERATINGEXPENSES.
DURING 3Q17, GENTERA HAD 493 SERVICE OFFICES AND 256 BRANCHES IN
MEXICO, 79 SERVICE OFFICES IN PERUAND 60 IN GUATEMALA FOR A TOTAL
OF 632 SERVICE OFFICES AND 256 BRANCHES. TOGETHER, THESE SERVICE
OFFICES AND BRANCHES (SO&B) REPRESENTED PS. 540 MILLION, OR
17.1% OF OPERATING EXPENSES. THE CURRENT NUMBER OF SERVICE OFFICES
AND BRANCHES WAS 11.1% LARGER THAN THE 799 SERVICE OFFICES AND
BRANCHES REPORTED IN 3Q16, TOTALING 888.
OTHER STRATEGIC INITIATIVES AND ADVISORY SERVICES, SUCH AS: I) THE
SAP PLATFORM AND THE ERP; II) THE DEPOSIT PILOT PROJECTS; AND, III)
YASTAS, AMONG OTHER INITIATIVES, JOINTLY REPRESENTED PS. 428
MILLION OR 13.5% OF OPERATING EXPENSES DURING 3Q17.MARKETING
CAMPAIGNS REPRESENTED PS. 223 MILLION, OR 7.1% OF OPERATING
EXPENSES, DURING THE SECOND QUARTER, INCLUDING THE INVESTMENT
ASSOCIATED WITH THE LOYALTY PROGRAM IN BANCO COMPARTAMOS WHICH
TOTALED PS. 142.3 MILLION THIS QUARTER.PARTICIPATION IN NET INCOME
FROM NON-CONSOLIDATED SUBSIDIARIES REPRESENTED A PS. (16) MILLION
LOSS DURING THE QUARTER, COMPARED TO A PS. (17) MILLION LOSS IN
3Q16. THIS LINE ITEM REFLECTS GENTERAS MINORITY CONTRIBUTION IN
COMPANIES IN WHICH IT HAS BEEN INVESTING.FOR THE THIRD QUARTER OF
2017, NET INCOME AMOUNTED TO PS. 750 MILLION, WHICH REPRESENTS AN
18.3% CONTRACTION COMPARED TO THE PS. 918 MILLION NET INCOME
RECORDED IN 3Q16. FOR THIS THIRD QUARTER BANCO COMPARTAMOS
REPRESENTED 83.1% OF GENTERAS TOTAL NET INCOME, WHEREAS COMPARTAMOS
FINANCIERA IN PERUREPRESENTED 9.2%, AND THE OTHER SUBSIDIARIES
GENERATED THE REMAINING 7.7%.
GENTERA CONCLUDED THIS NINE-MONTH PERIOD WITH AN ACCUMULATED NET
INCOME OF PS. 2,562 MILLION, REPRESENTING A 10.7% CONTRACTION
COMPARED TO THE ACCUMULATED NET INCOME AT THE END OF SEPTEMBER
2016, WHEN IT STOOD AT PS. 2,870 MILLION. BALANCE SHEET
CASH AND OTHER INVESTMENTS STOOD AT PS. 5,292 MILLION DURING THE
THIRD QUARTER OF 2017. THIS LEVEL OF LIQUIDITY ENABLES US TO COVER
OPERATING EXPENSE GROWTH, DEBT AMORTIZATIONS AND EXPECTED PORTFOLIO
GROWTH FOR THE FOLLOWING 30 DAYS. IT IS IMPORTANT TO NOTE THAT
48.5% OF THE CASH ON THE BALANCE SHEET CORRESPONDED TO BANCO
COMPARTAMOS, WITH PS. 2,569 MILLION HELD IN HIGHLY LIQUID ASSETS.
THE REMAINDER IS HELD IN GENTERA ACCOUNTS IN ITS VARIOUS
SUBSIDIARIES.
TOTAL LOAN PORTFOLIO REACHED PS. 31,221 MILLION IN 3Q17, A 2.0%
CONTRACTION COMPARED TO THE FIGURE REPORTED IN 3Q16. THE LOAN
PORTFOLIO WAS DISTRIBUTED AS FOLLOWS: 72.7%AT BANCO COMPARTAMOS,
25.7% AT COMPARTAMOS FINANCIERA IN PERU AND 1.6% AT COMPARTAMOS IN
GUATEMALA.
CREDIT QUALITY (NON-PERFORMING LOANS / TOTAL PORTFOLIO)
CONSOLIDATED NON-PERFORMING LOANS REACHED 4.18% IN 3Q17,
REPRESENTING A SLIGHT DETERIORATION WHEN COMPARED TO THE 3.95%
RECORDED IN 2Q17 AND A DETERIORATION COMPARED TO 3.33% IN 3Q16,
RESPECTIVELY, DUE TO DIFFERENT RISK PROFILE PRODUCTS IN THE
PORTFOLIO AND TO THE EFFECTS OF COMPETITION EXPERIENCED IN CERTAIN
REGIONS OF MEXICO. IT IS IMPORTANT TO MENTION THAT BANCO
COMPARTAMOS POLICY IS TO WRITE-OFF LOANS THAT ARE PAST DUE AFTER
180 DAYS.
PERFORMANCE RATIOS AND METRICSTHE 3Q17 COVERAGE RATIO WAS 148.9%,
WHICH IS IN ACCORDANCE WITH THE PORTFOLIO MIX AND MEXICAN FINANCIAL
REGULATIONS.
GOODWILL AMOUNTED TO PS. 892 MILLION AND WAS RELATED TO THE
ACQUISITION OF COMPARTAMOS FINANCIERA AND INTERMEX, WHICH WAS
RECORDED AS AN ASSET.
ROAE/ROAADURING 3Q17, GENTERA REACHED A RETURN ON AVERAGE EQUITY
(ROAE) OF 18.2%, COMPARED TO 24.8% IN 3Q16. RETURN ON AVERAGE
ASSETS (ROAA) FOR 3Q17 WAS 7.3%, COMPARED TO 9.3% IN 3Q16.
ROAE FOR THE NINE-MONTH PERIOD 2017 WAS 20.6%, AND ROAA FOR THE
SAME PERIOD WAS 8.3%
OTHER 3Q17 HIGHLIGHTS:YASTAS RECORDED APPROXIMATELY 1.9 MILLION
FINANCIAL TRANSACTIONS DURING THE QUARTER, 42.9% HIGHER THAN THOSE
EXECUTED IN 3Q16.ATERNA ENDED THE QUARTER WITH CLOSE TO 5 MILLION
ACTIVE LIFE INSURANCE POLICIES THROUGHOUT ITS OPERATIONS IN MEXICO,
PERU AND GUATEMALA.INTERMEX WITH MORE THAN 2 THOUSAND AFFILIATES
PROCESSED MORE THAN PS. 5,700 MILLION IN REMITTANCES
PAYMENTS.ACCORDING TO THE DIVIDEND APPROVED ON APRIL 20, 2017, AT
THE COMPANYS ANNUAL SHAREHOLDERS MEETING, THE SECOND AND FINAL
PAYMENT EQUIVALENT TO PS. 0.38 WILL BE PAID ON DECEMBER 1ST,
2017.
ON AUGUST 9, 2017, FITCH RATINGS AFFIRMED BANCO COMPARTAMOS
VIABILITY RATING (VR) AT BBB, AS WELL AS ITS FOREIGN- AND
LOCAL-CURRENCY LONG- AND SHORT-TERM ISSUER DEFAULT RATINGS (IDRS)
AT BBB AND F2, RESPECTIVELY. THE RATING OUTLOOK ONTHE LONG-TERM
IDRS WAS UPDATED TO STABLE FROM NEGATIVE. ITS NATIONAL SCALE LONG-
AND SHORT-TERM RATINGS WERE ALSO AFFIRMED AT AA+(MEX) AND
F1+(MEX).
AT THE END OF THE THIRD QUARTER, GENTERA REPURCHASED 1,215,000
SHARES THROUGH THE COMPANYS STOCK BUYBACK PROGRAM ESTABLISHED ON
APRIL 20, 2017. SHARES OUTSTANDING ASOF SEPTEMBER 30, 2017 AMOUNTED
TO 1,623,336,415.
DURING 3Q17 GENTERA'S STAFF PARTICIPATED IN 227 VOLUNTEER
ACTIVITIES AND PROGRAMS IN DIFFERENT COMMUNITIES, DEVOTING MORE
THAN 16 THOUSAND HOURS AND BENEFITING MORE THAN 21 THOUSAND PEOPLE.
IN 3Q17, GENTERA INVESTED MORE THAN PS. 40 MILLION PESOS IN
CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES FOCUSED ON EDUCATION,
VOLUNTEERING AND SUPPORT IN CONTINGENCIES. DURING SEPTEMBER 2017,
THE CORPORATE AND SOCIAL RESPONSIBILITY DEPARTMENT, THROUGH
FUNDACIN GENTERA, IMPLEMENTED A SUPPORT PROGRAM FOR THOSE AFFECTED
BY THE EARTHQUAKES IN MEXICO THROUGH A CAMPAIGN OF DONATION
OFRESOURCES, ACTIVATION OF COLLECTION CENTER IN MEXICO CITY AND
SENDING TIMELY ASSISTANCE TO AFFECTED AREAS.
GENTERACONSOLIDATED INCOME STATEMENT
FOR THE THREE AND NINE MONTHS ENDEDSEPTEMBER 30, 2017 AND 2016
(IN MILLIONS OF MEXICAN PESOS)GENTERA
CONSOLIDATED BALANCE SHEETAS OF SEPTEMBER 30, 2017 AND 2016
(IN MILLIONS OF MEXICAN PESOS)THE FOLLOWING SECTION SETS FORTH THE
NON-AUDITED FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2017 (3Q17)
FOR BANCO COMPARTAMOS, S.A. I.B.M. (BANCO COMPARTAMOS OR THE BANK),
WHICH IS GENTERAS MAIN SUBSIDIARY AND IS LOCATED IN MEXICO. ALL
FIGURES ARE EXPRESSED IN MEXICAN PESOS IN ACCORDANCE WITHTHE CNBV
REGULATIONS APPLICABLE TO CREDIT INSTITUTIONS AND MAY VARY DUE TO
ROUNDING.
FINANCIAL HIGHLIGHTSPORTFOLIO AND NET INCOME ARE EXPRESSEDIN
MILLIONS OF MEXICAN PESOS. * SOME OF THE SERVICE OFFICES
TRANSFORMED INTO BRANCHES. 3Q17 HIGHLIGHTS:TOTAL LOAN PORTFOLIO
REACHED PS. 22,689 MILLION, A 7.8% CONTRACTION COMPARED TO THE LOAN
PORTFOLIO REACHED IN 3Q16.NON-PERFORMING LOANS STOOD AT 4.37% IN
3Q17, COMPARED TO 3.21% IN 3Q16.NET INCOME FOR 3Q17 REACHED PS. 623
MILLION, A CONTRACTION COMPARED TO THE PS. 919 MILLION IN 3Q16.
CAPITALIZATION RATIO STOOD AT 37.23%.
ROA WAS 8.9%, COMPARED TO 13.0% IN 3Q16, WHILE ROE WAS 20.8%,
COMPARED TO 36.9% IN 3Q16.
RESULTS OF OPERATIONS
INTEREST INCOME REACHED PS. 4,482 MILLION IN 3Q17, 1.2% LESS THAN
3Q16, HOWEVER, NOT IMPACTED IN THE SAME PROPORTION AS THE
CONTRACTION IN THE LOAN PORTFOLIO. THIS LINE ITEMBENEFITED FROM THE
RE-PRICING INITIATIVE THAT BANCO COMPARTAMOS STARTED IN FEBRUARY OF
THIS YEAR.
THE FUNDING COST, WHICH INCLUDES LIABILITIES AND DEPOSITS FROM THE
PUBLIC, STOOD AT 7.21% IN 3Q17 COMPARED TO 4.94% IN 3Q16. INTEREST
EXPENSES ROSE 31.1% TO PS. 278 MILLION, COMPARED TO PS. 212 MILLION
IN 3Q16. THIS GROWTH IS EXPLAINED BY THE INCREASE IN THE REFERENCE
INTEREST RATE.
AS PREVIOUSLY MENTIONED, THECOST OF FUNDS INCREASED DURING 3Q17.
HOWEVER, IT WAS RELATIVELY STABLE CONSIDERING THAT THE CENTRAL BANK
RAISED INTEREST RATES BY 325 BPS OR MORE THAN 86% TAKING INTO
ACCOUNT THAT IN JUNE 2016, THE REFERENCE INTEREST RATE WAS AT 3.75%
AND AT THE END OF SEPTEMBER 2017 IT STOOD AT 7.00%. IT IS WORTH
HIGHLIGHTING THAT ATTHE END OF THE QUARTER, 45.6% OF THE COMPANYS
LIABILITIES WERE CONTRACTED AT FIXED RATE.
AS A RESULT OF THE AFOREMENTIONED, BANCOCOMPARTAMOS REPORTED A NET
INTEREST INCOME OF PS. 4,204 MILLION, A 2.8% CONTRACTION COMPARED
TO 3Q16.
PROVISIONS FOR LOAN LOSSES WERE PS. 745 MILLION, DRIVEN BY THE
CONTRIBUTION OF CREDITO COMERCIANTE; CREDITO CRECE Y MEJORA AND
CREDITO INDIVIDUAL PRODUCTS IN THE PORTFOLIO DURING 3Q17, WHICH
ACCOUNTED FOR49.5% OF THE PORTFOLIO. NII AFTER PROVISIONS ROSE TO
PS. 3,459 MILLION, A 3.5% CONTRACTION COMPARED TO PS. 3,584 MILLION
IN 3Q16.NIM (NET INTEREST MARGIN) AFTER PROVISIONS (NII AFTER
PROVISIONS FOR LOSSES / AVERAGE YIELDING ASSETS) FOR 3Q17 WAS
56.0%, COMPARED TO56.4% IN 3Q16. THIS RATIO SHOWED AN IMPROVEMENT
WHEN COMPARED TO THE 52.8% REACHED IN 2Q17. THE MARGIN CONTRACTIONS
THAT THE BANK HAD DURING 1Q17 AND 4Q16, WEREATTRIBUTED TO: I)
HIGHER FUNDING COSTS; AND, II) HIGHER COST OF RISK. HOWEVER, WITH
THE REPRICING STRATEGY THAT STARTED IN 1Q17, THE MARGINS HAVE
IMPROVED TOSIMILAR LEVELS AS THOSE OBSERVED IN 2016.
NET OPERATING INCOMECOMMISSIONS AND FEE INCOME REACHED PS. 250
MILLION, A 7.3% INCREASE VERSUS 3Q16. THIS LINE ITEM WAS MAINLY
DRIVEN BY COLLECTION FEES AND PENALTIES CHARGED TO CLIENTS WITH
DELINQUENT ACCOUNTS, REPRESENTING 37.4% OF FEE INCOME, AS WELL AS
SALES COMMISSIONS FOR VOLUNTARY LIFE INSURANCE POLICIES, WHICH
ACCOUNTEDFOR 57.3%. THE REMAINING 5.3% WAS RELATED TO OTHER
CONCEPTS AND FEES.
COMMISSIONS AND FEE EXPENSES TOTALED PS. 119 MILLION, REPRESENTING
A 23.7% DECREASE WHEN COMPARED TO 3Q16. THIS LINE ITEM MAINLY
REFLECTED: I) 27.0% COLLECTION AND DISBURSEMENT FEE COSTS; II)
31.8% FOR ALTERNATIVE LOCATIONS TO PAY AND WITHDRAW LOANS FROM
BANCO COMPARTAMOS; III) 11.5% FOR THE FREE VOLUNTARY LIFE INSURANCE
COVERAGE INCLUDED IN THE CREDITO MUJER PRODUCT; AND IV) 29.7% FEES
PAID TO YASTAS AND OTHER FEES.
TRADING GAINS/LOSSES STOOD WITH A PROFIT OF PS. 3 MILLION DURING
THE QUARTER DUE TO FX EXPOSURE DURING THIS THIRD QUARTER.
OTHER INCOME/EXPENSES REACHED A PS. (48) MILLION LOSS. THIS ITEM
REFLECTED NON-RECURRING INCOMEOR EXPENSES, WHICH FOR THE THIRD
QUARTER WERE PRIMARILY DRIVEN BY A PROVISION LINKED TO THE FEES OF
DELINQUENT ACCOUNTS AND BY DONATIONS.OPERATING EXPENSES FOR 3Q17
ROSE 14.7% TO PS. 2,683 WHEN COMPARED TO 3Q16, PRIMARILY
ATTRIBUTABLE TO: I) THE CONVERSION OF SERVICE OFFICES INTO NEW
BRANCHES; AND II) THE EXECUTION OF STRATEGIC INITIATIVES.
NET INCOMEBANCO COMPARTAMOS REPORTED A NET INCOME OF PS. 623
MILLION, REPRESENTING A CONTRACTION OF 32.2% VERSUS 3Q16.
ACCUMULATED NET INCOME AS OF SEPTEMBER 30, 2017 TOTALED PS. 2,130
MILLION, A 17.2% CONTRACTION COMPARED TO THE SAME PERIOD LAST
YEAR.BALANCE SHEET
CASH AND OTHER INVESTMENTS INCREASED BY 10.4% TO PS. 2,569 MILLION,
COMPARED TO PS. 2,327 MILLION IN 3Q16. THIS AMOUNT REPRESENTS THE
FUNDS REQUIRED BY BANCO COMPARTAMOS TO COVER OPERATING EXPENSES,
DEBTMATURITIES AND LOAN PORTFOLIO GROWTH FOR THE FOLLOWING 30 DAYS.
CASH AND OTHER INVESTMENTS ARE PLACED IN SHORT-TERM INSTRUMENTS
WHERE THE COUNTERPARTY RISK ISAPPROVED BY THE BOARDS RISK
COMMITTEE.
TOTAL LOAN PORTFOLIOLOAN PORTFOLIO (PS. MILLION)THE LOAN PORTFOLIO
REACHED PS. 22,689 MILLION, A 7.8% CONTRACTION COMPARED TO THE PS.
24,604 MILLION REPORTED IN 3Q16. THIS PERFORMANCE IS EXPLAINED BY
THE CONTROL PHASE STRATEGY STARTED IN LATE 2016 WITH THE OBJECTIVE
OF STABILIZING ASSET QUALITY; HOWEVER, THIS HAS IMPACTED THE
POTENTIAL GROWTH OF THE BANK DURING 2017 AND PARTICULARLY IN THE
THIRD QUARTER.
THE AVERAGE OUTSTANDING BALANCE PER CLIENT IN 3Q17 WAS PS. 8,532,
1.3%ABOVE THE PS. 8,423 REPORTED IN 3Q16.
LOAN PRODUCTS & CREDIT QUALITYTHE LOAN PRODUCTS OFFERED BY
BANCO COMPARTAMOS ARE DISTRIBUTED UNDER TWO MAIN CATEGORIES (GROUP
AND INDIVIDUAL METHODOLOGIES):
1. GROUP LENDING METHODOLOGY: MERCHANT CREDIT (CREDITO COMERCIANTE)
AND WOMEN CREDIT (CREDITO MUJER) REPRESENTED 73.7% OF THE TOTAL
LOAN PORTFOLIO IN 3Q17, WHICH COMBINED PRESENTED AN NPL OF 3.88%
FOR THIS 3Q17, COMPARED TO 2.75% IN 3Q16.
2. INDIVIDUAL LENDING METHODOLOGY: IMPROVEMENT LOANS (CRECE Y
MEJORA), ADDITIONAL LOANS (CREDITO ADICIONAL) AND PERSONAL LOANS
(CREDITO INDIVIDUAL) REPRESENTED A 26.3%SHARE OF THE TOTAL LOANS
PORTFOLIO IN 3Q17, WITH A CONSOLIDATED NPL OF 5.73% IN 3Q17,
COMPARED TO 4.47% ONE YEAR AGO.
DURING 3Q17 TOTALNPLS REACHED 4.37%, A DETERIORATION WHEN COMPARED
TO THE 3.21% RECORDED IN 3Q16, AND ALSO A SLIGHT DETERIORATION VS.
THE 4.17% REPORTED IN 2Q17.BANCO COMPARTAMOS POLICY IS TO WRITE-OFF
LOANS THAT ARE PAST DUE AFTER 180 DAYS. DURING THE THIRD QUARTER,
THIS FIGURE REACHED PS. 758 MILLION, OR 25.7% MORE THAN THAT
RECORDED IN 3Q16.
FOR 3Q17, THE COVERAGE RATIO(ALLOWANCE FOR LOAN LOSSES /
NON-PERFORMING LOANS) WAS 143.4% COMPARED TO 175.3% IN 3Q16.
ALLOWANCE FOR LOAN LOSSES IS BASED ON THE METHODOLOGY ESTABLISHED
BY THE CNBV, WHICH REQUIRES SPECIFIC RESERVE COVERAGE FOR EACH
ORIGINATED LOAN: GROUP LOANS WITH A SOLIDARITY FIGURE AND A
DIFFERENT COVERAGE FOR INDIVIDUAL LOANS.IT IS IMPORTANT TO
HIGHLIGHT THAT OUR METHODOLOGY FOLLOWS THE RULES THAT APPLY TO THE
PERSONAL CREDIT CATEGORY INSTEAD OF THE CONSUMER LOANS, NOT
REVOLVING, OTHERS CATEGORY, AS DESCRIBED PREVIOUSLY.
THE ALLOWANCE FOR LOAN LOSSES BY QUALIFICATION WAS DISTRIBUTED AS
FOLLOWS:
CLASSIFICATION FOR ALLOWANCE FOR LOAN LOSSES IS IN ACCORDANCE WITH
CNBV REGULATIONS (SECTION V, ARTICLE 129, AND PARAGRAPH II)
APPLICABLE TO CREDIT INSTITUTIONS SINCE JULY 2013 . ALLOWANCE FOR
LOAN LOSSES CONTINUED TO SUFFICIENTLY COVER NON-PERFORMING LOANS.
THE RATINGS AND THE ALLOWANCE REPORTED FOR THE THIRD QUARTER 2017
IS THE ONE CORRESPONDING AS OF JUNE 2017, CONSIDERING THE
MODIFICATIONS TO THE GENERAL PROVISIONS FOR CREDIT INSTITUTIONS
PUBLISHED IN THE DOF (DIARIO OFICIAL FEDERACIN) ON JANUARY 6, 2017;
AND FOR WHICHITS INITIAL EFFECT MAY BE CONSTITUTED OVER A PERIOD OF
TWELVE MONTHS ACCORDING TO THE APPLICABLE REGULATION.TOTAL
LIABILITIES
DURING 3Q17, TOTAL LIABILITIES REACHED PS. 15,297 MILLION, 16.4%
BELOW THE PS. 18,294 MILLION RECORDED DURING 3Q16. ALL OF BANCO
COMPARTAMOS CURRENT LIABILITIES ARE FULLY PESO-DENOMINATED;
THEREFORE, THERE IS NO FX EXPOSURE.BANCO COMPARTAMOS MAINTAINS A
WELL-DIVERSIFIED FUNDING MIX WITH DIFFERENT SOURCES:I) LONG-TERM
DEBT ISSUANCES: BANCO COMPARTAMOS IS A FREQUENT ISSUER IN THE
MEXICAN DEBT CAPITAL MARKET. AS OF SEPTEMBER 30, 2017, IT HAD PS.
8,580 MILLION OUTSTANDING IN CERTIFICADOS BURSTILES BANCARIOS (BANK
BONDS).
II) STRONG CAPITAL BASE: 44.6% OF TOTAL ASSETS WERE FUNDED WITH
EQUITY.
III) CREDIT LINES WITH BANKS AND OTHER INSTITUTIONS: BANCO
COMPARTAMOS HAD PS. 3,570 MILLION IN CREDIT LINES AMONG VARIOUS
BANKING CREDITORS (DEVELOPMENT BANKS AND COMMERCIAL BANKS).
IV) DEPOSITS: FOR 3Q17, DEPOSITS FROM CLIENTS STOOD AT PS. 1,454
MILLION, WHICH WERE GENERATED WITH OVER 1.3 MILLION DEBIT ACCOUNTS
AND FROM THE TERM INVESTMENT PRODUCT, WHILE PS. 520 MILLION
REPRESENTED DEPOSITS FROM GENTERAS SUBSIDIARIES.TOTAL STOCKHOLDERS
EQUITY
THE CAPITALIZATION RATIO WAS 37.23% COMPARED TO 26.8% REPORTED IN
3Q16. THE CURRENT RATIO CONTINUES TO REFLECT THE BANKS STRENGTH IN
ACCORDANCE WITH LEVELS REQUIRED BY BASEL III, ANDIS WELL ABOVE THE
MEXICAN BANKING SYSTEM STANDARDS. BANCO COMPARTAMOS REPORTED PS.
10,657.7 MILLION IN TIER I CAPITAL AND RISK-WEIGHTED ASSETS OF PS.
28,623.3 MILLION.
BANCO COMPARTAMOS, S.A., INSTITUCIN DE BANCA MLTIPLE
INCOME STATEMENTFOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2017 AND 2016
(IN MILLIONS OF MEXICAN PESOS)BANCO COMPARTAMOS, S.A., INSTITUCIN
DE BANCA MLTIPLE
BALANCE SHEET
AS OF SEPTEMBER 30, 2017 AND 2016(IN MILLIONS OF MEXICAN
PESOS)COMPARTAMOS FINANCIERA (PERU)THE FOLLOWING SECTION SETS FORTH
THE NON-AUDITED FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2017
(3Q17) FOR COMPARTAMOS FINANCIERA, GENTERAS PERUVIAN SUBSIDIARY.
ALL FIGURES ARE IN MEXICAN PESOS AND MAY VARY DUE TO ROUNDING. THE
READER MUST TAKE INTO CONSIDERATION THE FX MOVEMENTS IN THE
COMPARISON PERIODS. NOTE: IT IS IMPORTANT TO HIGHLIGHT THAT THE
ANALYSIS AND FIGURES ARE EXPRESSED IN ACCORDANCE WITH MEXICAN
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND CNBV (NATIONAL BANKING
AND SECURITIES COMMISSION) REGULATIONS. THESE FIGURES ARE NOT
COMPARABLE TO THE FINANCIAL STATEMENTS SUBMITTED TO THE PERUVIAN
SUPERINTENDENCIA DE BANCA, SEGUROS Y AFP (PERUVIAN BANKING,
INSURANCE AND PENSION FUND COMMISSION).FINANCIAL
HIGHLIGHTSCOMPARTAMOS FINANCIERAS FIGURES ARE REPORTED UNDER
MEXICAN GAAP.
PORTFOLIO AND NET INCOME ARE EXPRESSED IN MEXICAN PESOS (MILLIONS)
AND WITH THEIR CORRESPONDING FX FOR THE QUARTER.
3Q17 HIGHLIGHTS:
TOTAL LOAN PORTFOLIO REACHED PS. 8,033 MILLION, 18.4% HIGHER THAN
THAT OF 3Q16.
NON-PERFORMING LOANS STOOD AT 3.56% IN 3Q17, COMPARED TO 3.66% IN
3Q16.
ACTIVE CLIENTS REACHED 446,401, A 27.0% INCREASE COMPARED TO
3Q16.
O GROUP LOANS (CREDITO MUJER) PRODUCT REPRESENTED 66.4% OF THE
CLIENTS SERVED IN PERU, ENDING THE PERIOD WITH 296,394 CLIENTS,
44.8% MORE CLIENTS THAN IN 3Q16.COMPARTAMOS FINANCIERA REACHED A
TOTAL OF 79 SERVICE OFFICES, 8 MORE OFFICES THAN IN 3Q16.ON OCTOBER
17, 2017, COMPARTAMOS FINANCIERA ISSUED S/. 70 MILLION IN THE
PERUVIAN DEBT MARKET. THE TENOROF THIS ISSUANCE IS ONE YEAR WITH AN
INTEREST RATE OF 4.92% AND WAS OVERSUBSCRIBED BY 3.1 TIMES. THIS
ISSUANCE BECAME THE MOST SUCCESSFUL ONE IN TERMS OF SIZE AND
INTEREST RATE.
COMPARTAMOS, S.A. (GUATEMALA)THE FOLLOWING SECTION SETS FORTH THE
NON-AUDITED FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2017 (3Q17)
FOR COMPARTAMOSS.A., THE COMPANYS GUATEMALAN SUBSIDIARY. ALL
FIGURES ARE EXPRESSED IN MEXICAN PESOS IN ACCORDANCE WITH MEXICAN
ACCOUNTING PRINCIPLES AND REGULATIONS, AND MAYVARY DUE TO ROUNDING.
THE READER MUST TAKE INTO CONSIDERATION THE FX MOVEMENTS IN THE
COMPARISON PERIODS.FIGURES ARE EXPRESSED IN MEXICAN PESOS WITH ITS
CORRESPONDING FX.
EXCHANGE RATE AS OF SEPTEMBER 30, 2017, FROM QUETZALES TO USD:
7.344
EXCHANGE RATE AS OF SEPTEMBER 30, 2017, FROM USD TO MXP: 18.159
PORTFOLIO AND NET INCOME ARE EXPRESSED IN MEXICAN PESOS (MILLIONS)
AND WITH THEIR CORRESPONDING FX FOR THE QUARTER.
SOURCE: BANCO DE GUATEMALA AND BANCO DE MEXICO.3Q17 HIGHLIGHTS:
TOTAL LOAN PORTFOLIO REACHED PS. 499 MILLION, 5.0% HIGHER
WHENCOMPARED TO 3Q16.
NET INCOME FOR 3Q17 STOOD AT PS. 7.2 MILLION COMPARED TO PS. 14.3
MILLION IN 3Q16.
NON-PERFORMING LOANS STOOD AT 5.48% IN 3Q17, COMPARED TO 4.73% IN
3Q16.ACTIVE CLIENTS REACHED 87,670, A 9.5% INCREASE COMPARED TO
3Q16.
FIGURES ARE EXPRESSED IN MEXICAN PESOS (MILLIONS) WITH THEIR
CORRESPONDING FXFOR THE QUARTER.
***
ABOUT GENTERA
GENTERA, S.A.B. DE C.V. (FORMERLY COMPARTAMOS, S.A.B. DE C.V.) IS A
HOLDING COMPANY WHOSE PRIMARY OBJECTIVE IS TO PROMOTE, ORGANIZE AND
MANAGE COMPANIES, DOMESTIC AND INTERNATIONAL, THAT ARE SUBJECT TO
ITS INVESTMENT POLICIES. GENTERA WAS ESTABLISHED IN 2010 AND IS
HEADQUARTERED IN MEXICO. ITS STOCK BEGAN TRADING ON THE MEXICAN
STOCK EXCHANGE ON DECEMBER 24, 2010 UNDER THE TICKER SYMBOL
COMPARC*. ON JANUARY 2, 2014, THE TICKER SYMBOL WAS CHANGED TO
GENTERA*. NOTE ON FORWARD-LOOKING STATEMENTS
THIS PRESS RELEASEMAY CONTAIN FORWARD-LOOKING STATEMENTS. THESE
STATEMENTS ARE STATEMENTS THAT ARE NOT HISTORICAL FACTS, AND ARE
BASED ON MANAGEMENTS CURRENT VIEW AND ESTIMATES OF FUTURE ECONOMIC
CIRCUMSTANCES, INDUSTRY CONDITIONS, COMPANY PERFORMANCE AND
FINANCIAL RESULTS. THE WORDS ANTICIPATES, BELIEVES, ESTIMATES,
EXPECTS, PLANS ANDSIMILAR EXPRESSIONS, AS THEY RELATE TO THE
COMPANY, ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
STATEMENTS REGARDING THE DECLARATION OR PAYMENT OF DIVIDENDS, THE
IMPLEMENTATION OF PRINCIPAL OPERATING AND FINANCING STRATEGIES AND
CAPITAL EXPENDITURE PLANS, THE DIRECTION OF FUTURE OPERATIONS AND
THE FACTORS ORTRENDS AFFECTING FINANCIAL CONDITION, LIQUIDITY OR
RESULTS OF OPERATIONS ARE EXAMPLES OF FORWARD-LOOKING STATEMENTS.
SUCH STATEMENTS REFLECT THE CURRENT VIEWS OF MANAGEMENT AND ARE
SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES. THERE IS NO
GUARANTEE THAT THE EXPECTED EVENTS, TRENDS OR RESULTS WILL ACTUALLY
OCCUR. THESTATEMENTS ARE BASED ON MANY ASSUMPTIONS AND FACTORS,
INCLUDING GENERAL ECONOMIC AND MARKET CONDITIONS, INDUSTRY
CONDITIONS, AND OPERATING FACTORS. ANY CHANGESIN SUCH ASSUMPTIONS
OR FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
CURRENT EXPECTATIONS.