Market Overview

Javer Announces Growth in Volume, Revenues and EBITDA

Share:

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, today announced financial results for the
first quarter ("1Q18") ended March 31, 2018. All figures presented in
this report are expressed in nominal Mexican pesos (Ps.), unless
otherwise specified.

1Q18 Highlights:

  • Units sold were 4,747 units in 1Q18, up 12.4% compared to 4,224
    units titled in 1Q17, derived from the inertia of the projects that
    started operations in 4Q17, along with 3 new projects launched in 1Q18.
  • Net Revenues increased 19.0% to Ps. 1,985.0 million in 1Q18
    compared to Ps. 1,667.8 million in 1Q17, primarily due to the sales
    mix improvement and a higher average sales price.
  • EBITDA grew 21.6% to Ps. 170.2 million in 1Q18, compared to Ps.
    140.0 million in 1Q17, as a result of volume growth and the
    improvement in sales mix and prices.
  • Net Result was Ps. 58.2 million in 1Q18, compared to Ps. 155.5
    million in 1Q17, as the peso appreciation resulted in FX gains of Ps.
    247.8 million in 1Q17, compared to the Ps. 50.2 million FX gains
    reported in 1Q18. Income per share was 0.21 in 1Q18, compared to 0.56
    in 1Q17.
  • FCF was Ps. (118.2) million in 1Q18. This result was mainly due
    to a greater investment in inventories, higher tax payments and
    interest expense, as well as, the delay in the collection process due
    to the vacation period during the last week of March.

CEO STATEMENT

Mr. René Martínez, Javer's Chief Executive Officer commented, "The
positive inertia shown by the Company in the last quarters of 2017 was
reflected in the improvement of practically all operating indicators,
when comparing this first quarter of 2018 against the same period of the
previous year.

The 12.4% growth in volume was supported by the projects in which we
started operations in the fourth quarter of 2017, as well as in 3 new
projects during 1Q18. Likewise, the enhancements in the sales mix that
boosted the middle income and residential units by more than 80%, and
the increase in the sale prices of each prototype, drove revenues to
increase 19.0%, even though revenues from the sale of commercial lots
decreased by around 80%.

The gross profit from housing sales was favored by the mix-price factor,
growing by 25.0% and improving by 3.1% in relation to sales; this
appreciation in margins will help us absorb the incremental effects in
some of the raw materials prices that have gone up in recent weeks such
as steel, as well as the decrease in the availability of commercial lots
in our active projects.

Likewise, EBITDA increased 21.6% during 1Q18 supported by the growth in
volume and the aforementioned effects. Also, the net result of the
Company was positive as it has been recorded in the last quarters,
however, when compared to 1Q17, a decrease is shown given that during
2017 a significant FX gain was recognized due to the appreciation of the
Mexican peso.

On the other hand, during the fourth quarter call, we commented that
during the first half of 2018 we would use cash for land reserve
acquisitions which will help us support our business strategy for the
years 2019 and 2020; however, in order to maintain our operating
efficiency, the use of cash was not as intensive as we had originally
contemplated.

Regarding Infonavit, Javer continues being the leader in the Institute's
loans market share, both in loans granted for new housing at 10.4%, and
also for total loans granted with a 5.3% market share. Both figures grew
for Javer compared to 1Q17 and we maintained a significant advantage of
more than 2,000 credits against the closest competitor. We will continue
to consolidate our market share in the State of Mexico and Quintana Roo.

As for the subsidy program, as of March 31st, 12.7% of the announced
annual subsidy budget has been consumed. In our case, 27.1% of the units
sold during the quarter were titled using this program, compared to
20.1% in the same period of 2017. This performance continues to reflect
our intention to not leverage our operation in this demand segment, a
move that further strengthens our strategy and business model.

In other areas of the organization, we are pleased to say that following
the recognition of being named one of the Great Places to Work in
Mexico, we were informed that we are among the best 100 companies
nationwide, which commits us to continue working and fostering a
first-class environment for all our employees.

As part of our commitment to remaining a Socially Responsible Company,
we constantly carry out tasks and activities to contribute positively to
the environment. During the month of March, we completed a tree-planting
project at one of our developments in the city of Aguascalientes. In
addition, the 2018 Javer Sustainability contest was launched within the
student community of one of the most recognized universities in Nuevo
Leon; the contest consists of the designing and improvement of a nursery
and vegetable garden in one of our communities, while raising awareness
about the care of the environment.

In summary, we are very satisfied with the results obtained during this
first quarter, which not only reflect a substantial improvement against
the same period of 2017, but also solidify our growth expectations for
the year. This leaves us very confident, therefore we reiterate our
guidance for the year: double digits growth in revenues, between 5.0%
and 7.5% in EBITDA and positive generation of free cash flow."

For a full version of this earnings release with financial statements,
go to: http://www.javer.com.mx/investors.php

SERVICIOS CORPORATIVOS JAVER S.A.B. DE C.V.

Cordially invites you to its

FIRST QUARTER 2018

Conference Call & Webcast Presentation in Spanish

Tuesday, April 24, 2018

11:00 a.m. New York Time

10:00 a.m. Mexico City/Monterrey Time

PRESENTERS

René Martínez Martínez, Chief Executive Officer

Felipe Loera Reyna, Chief Financial Officer

To access the call, please dial:

1(877) 830-2576 from within the U.S.

1(785) 424-1726 from outside the U.S.

Passcode: JAVER

To access the live and archived webcast presentation, visit:

https://www.webcaster4.com/Webcast/Page/1110/25186

A replay will be available on April 24, 2018 at 3:00pm for 7 days

To obtain the replay, please call:

1(844) 488-7474 from within the U.S.

1(862) 902-0129 from outside the U.S.

Passcode: 25132292

About Javer:

Servicios Corporativos Javer S.A.B. de C.V. specializes in the
construction of affordable entry level, middle income and residential
housing and it is the largest housing development company in Mexico in
terms of units sold. The Company began operations in 1973, and it is
headquartered in the city of Monterrey, Nuevo Leon. The Company operates
in the states of, Aguascalientes, Jalisco, Nuevo Leon, Queretaro,
Quintana Roo, State of Mexico and Tamaulipas and had operations in
Mexico City with a residential project in 2016. Javer is the largest
supplier of the Infonavit system in the country, holding a 5.0% market
share in 2017, considering the total amount of loans granted for new and
used housing; and the Company also leads with an 8.9% market share
regarding Infonavit's credits granted only for new housing. In addition,
it is the largest supplier of Infonavit loans for new housing in the
state of Aguascalientes, Nuevo Leon and Queretaro with a 26.5%, 20.0%,
and 19.0% market share in 2017, respectively; and the second largest
supplier of Infonavit loans for new housing in Jalisco, State of Mexico,
and Quintana Roo with a 19.5%, 15.2%, and 10.9% market share,
respectively. During 2017, the Company reported revenues of Ps. 7.6
billion and sold a total of 18,750 units.

View Comments and Join the Discussion!