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Corporación Inmobiliaria Vesta Reports Fourth Quarter 2020 Earnings Results

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MEXICO CITY, Feb. 18, 2021 /PRNewswire/ -- Corporación Inmobiliaria Vesta S.A.B. de C.V., ("Vesta", or the "Company") (BMV: VESTA), one of the leading pure-play industrial real estate companies in Mexico, today announced results for the fourth quarter ended December 31, 2020. All figures included herein were prepared in accordance with International Financial Reporting Standards (IFRS) and are stated in US dollars unless otherwise noted.

Highlights

  • Year-end revenues exceeded the high end of Vesta's 2020 revised revenue guidance range to reach US$ 149.9 million; a 3.8% year-on-year increase. Full year 2020 NOI and EBITDA margins also exceeded the Company's revised 2020 guidance, at 94.0% and 84.2%, respectively.

  • As of December 31, 2020, all Vesta tenants had returned to pre-crisis production levels. Further, all 43 of the selected tenant deferral agreements due by year end 2020 have fulfilled their payment obligations to date, with the majority of deferral commitments collected between August and December. Vesta therefore has collected US$ 4.6 million of the US$ 5.5 million deferrals by year-end, with the remaining balance payment expected mostly in 1Q21.

  • Consistent with Vesta´s Level 3 Strategy, 4Q20 NAV per share increased 4.4% to US$ 2.45, from US$ 2.34 in 4Q19, while pre-tax FFO per share increased 16% year on year, to US$ 0.0391 at the end of 4Q20 from US$ 0.0338 in 4Q19.

  • Leasing activity for the quarter reached 1,385,285 ft² (128,697 m²) comprised of 324,948 ft² (30,189 m²) through new contracts with Purina and EP Logistics and 1,060,337 ft² (98,509 m²) in lease renewals. Therefore, fourth quarter 2020 occupancy closed at 90.7% for the total portfolio.

  • During 2020, while the adverse effects of the pandemic delayed clients' decisions and slowed overall leasing activity, Vesta was nevertheless able to attain important leasing agreements within both the Bajío and northern Mexico regions, to achieve 5.5 million ft² in total leasing activity for the year; 48% of which represented new contracts and growth projects and 52% in existing client lease renewals with a positive spread of 0.5% and a weighted average lease time of approximately seven years.

  • Vesta delivered 1 million square feet during 4Q20, with two buildings delivered ahead of schedule: 1) the second phase of Vesta's Mercado Libre project was completed in December 2020; nearly one year ahead of the projected November 2021 delivery date. Mercado Libre is now Vesta´s sixth largest tenant in terms of GLA. This project was also recognized by "Market Analysis Awards 2020" as "The largest transaction by a developer in 2020"; 2) the San Miguel de Allende expansion project scheduled for February 2021 delivery was also completed during the fourth quarter 2020.

  • The Company recently leased a vacant building in Tijuana which was recovered in 3Q20 from a client who had previously filed for bankruptcy. As a result, Vesta has begun the construction of one inventory building of 320,207 ft² (29,748 m²) in Tijuana. Vesta´s 4Q20 development portfolio therefore totaled 1,096,541 ft² (101,872 m²) with a US$ 54.9 million total investment; 23% of which has been leased by year end 2020. Weighted average expected return on cost is 11.3% for Vesta's 4Q20 development projects.

2021 Guidance

Vesta expects revenues to increase between 4.5% to 5.5% in 2021 with a 93% NOI margin and an 83% EBITDA margin, while maintaining the Company's solid performance across key operational metrics.





12 months


Financial Indicators (million)

4Q20

4Q19

Chg. %

2020

2019

Chg. %

Rental Income

38.03

36.31

4.7

149.86

144.37

3.8

NOI

35.97

33.78

6.5

140.93

137.10

2.8

NOI Margin %

94.6%

93.0%


94.0%

95.0%


EBITDA

31.97

29.07

10.0

126.19

121.38

4.0

EBITDA Margin %

84.1%

80.1%


84.2%

84.1%


EBITDA Per Share

0.0559

0.0507

10.3

0.2199

0.2067

6.4

Total Comprehensive Income

43.14

49.45

na

62.06

133.91

na

FFO Pretax

22.34

19.40

15.1

87.14

82.22

6.0

FFO Pretax Per Share

0.0391

0.0338

15.5

0.1518

0.1400

8.4

FFO

7.89

11.57

(31.8)

60.99

44.55

36.9

FFO Per Share

0.0138

0.0202

(31.6)

0.1063

0.0759

40.1

EPS

0.0755

0.0862

na

0.1081

0.2280

na

Shares (average)

571.58

573.45

(0.3)

573.97

587.21

(2.3)

  • Revenues increased 4.7% in 4Q20 to US$ 38.03 million, from US$ 36.31 million in 4Q19. This is primarily due to new revenue-generating contracts closed during the fourth quarter 2020.

  • Net Operating Income ("NOI") increased 6.5% to US$ 35.97 million in 4Q20, compared to US$ 33.78 million in 4Q19. The fourth quarter 2020 NOI margin was 94.6%; a 156-basis-point increase due to lower costs related to rental income generating properties.

  • EBITDA increased 10.0% to US$ 31.97 million in the fourth quarter 2020, versus US$ 29.07 million in the fourth quarter of 2019. 4Q20 EBITDA margin was 84.1%; a 401-basis point increase due to 8.2% decrease in administrative expenses during the quarter through budget reviews and expense reduction for the remainder of the year.

  • Pretax funds from operations ("FFO pretax") for 4Q20 increased 15.1% to US$ 22.34 million, from US$ 19.40 million for the same period in 2019. Pretax FFO per share was US$ 0.0391 for the fourth quarter 2020, compared with US$ 0.0338 for the same period in 2019; an 15.5% increase. 4Q20 FFO after tax was US$ 7.89 million, compared to US$ 11.57 million during 4Q19. This decrease was due to increased current taxes in 4Q20.

  • Total comprehensive gain for 4Q20 was US$ 43.14 million, versus a US$ 49.45 million gain in the same quarter 2019. This decrease was primarily due to lower gain on revaluation of investment properties during 4Q20.

  • As of December 31, 2020, the total value of Vesta's investment property portfolio was US$ 2.10 billion; a 5.7% increase compared to US$ 1.99 billion at the end of December 31, 2019.

For a full version of Corporación Inmobiliaria Vesta Fourth Quarter 2020 Earnings Release please visit: https://www.vesta.com.mx/investors/financial_information

CONFERENCE CALL INFORMATION:

Vesta will host a conference call on Friday, February 19, to discuss these results at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time (Mexico City Time).

To access the call, please dial:
US, toll-free: +1 877-705-6003
International, toll: +1 201-493-6725
Mexico, toll-free: +1 800-522-0034

A replay will be available from 1 p.m. on February 19 until March 5, 2021 and can be accessed by dialing:
US, toll-free: +1 844-512-2921
International, toll: +1 412-317-6671
Replay ID: 13715047

About Vesta
Vesta is a best-in-class, fully integrated real estate company that owns, manages, acquires, sells, develops and re-develops industrial properties in Mexico. As of December 31, 2020, Vesta owned 188 properties located in modern industrial parks in 15 states of Mexico totaling a GLA of 31.2 million ft2 (2.90 million m2). The Company has multinational clients, which are focused in industries such as e-commerce/retail, aerospace, automotive, food and beverage, logistics, medical devices, and plastics, among others. For additional information visit: www.vesta.com.mx.

Note on Forward-Looking Statements

This report may contain certain forward-looking statements and information relating to the Company that reflects the current views and/or expectations of the Company and its management with respect to its performance, business and future events. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like "believe," "anticipate," "expect," "envisages," "will likely result," or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. Some of the factors that may affect outcomes and results include, but are not limited to: (i) national, regional and local economic and political climates; (ii) changes in global financial markets, interest rates and foreign currency exchange rates; (iii) increased or unanticipated competition for our properties; (iv) risks associated with acquisitions, dispositions and development of properties; (v) tax structuring and changes in income tax laws and rates; (vi) availability of financing and capital, the levels of debt that we maintain; (vii) environmental uncertainties, including risks of natural disasters; (viii) risks related to the outbreak and spread of COVID-19 and the measures that governments, agencies, law enforcement and/or health authorities implement to address it; and (ix) those additional factors discussed in reports filed with the Bolsa Mexicana de Valores. We caution you that these important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation and in oral statements made by authorized officers of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as may be required by law.

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View original content:http://www.prnewswire.com/news-releases/corporacion-inmobiliaria-vesta-reports-fourth-quarter-2020-earnings-results-301231307.html

SOURCE Corporación Inmobiliaria Vesta, S.A.B. de C.V.