just started to research Homex today based on some recommendations ; don't know much yet but company looks good and solid ; might buy some ; anybody know anything about Homex or would like to help me do some DD ?
Its a Mexican housing company, its been sued by most of the banks as it has stopped paying interests.
Barclays earing report says:
2Q13 Results: Cash burn continues as operations come to a virtual halt
HOMEX reported 2Q13 results well below our forecast. Cash burn from its housing division (adjusted for the favorable FX effect) came in at negative P$4.4 bn in 2Q13 (P$7.5 bn in 1H13), as operations came to a virtual halt. The company titled 710 homes in the quarter, generating P$298 mn in revenues, or 27% of total revenues, which reached P$1.1 bn, decreasing 84% YoY. The infrastructure division contributed the balance of the revenues. For 1H13 Homex posted a consolidated P$3.3bn cash burn offsetting the P$4.2 bn cash inflow from the sale of the penitentiaries project.
The Company recognized a charge of P$5.3 bn, writing down land and construction in-progress inventory that do not qualify for the recently published rules for subsidy application from the government. Moreover, the company created a P$2.1 bn provision for uncollectable accounts receivable from clients that lost their eligibility for subsidies or deteriorated their credit status. Lastly, the company recorded a Ps.1.2 billion loss related to the cancellation of currency hedges.
Adjusted EBITDA for 2Q13 was negative Ps10.1 bn, from a positive P$1.7 bn in 2Q12. EPS for 2Q13 decreased to negative P$30.3 as compared to P$1.7 reported for the 2Q12. Finally, as of June 2013, the company posted a YoY decline of 96% in its cash position, which now reached a level of P$147mn.
We reiterate our Underweight rating on Homex, as the lack of operational and financial visibility, coupled with a continued high level of cash burn, prevent us from becoming more constructive on its shares.
Living in Mexico and reading what is being said about them in the newspaper I would not touch it as it may be suspended from the stock exchange like URBI and GEO were last week as they are facing BK. That's my 2 cents.