Corporación Inmobiliaria Vesta Reports Second Quarter 2020 Earnings Results

MEXICO CITY, July 23, 2020 /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 the results for the second quarter ended June 30, 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

• Vesta's 2Q20 results were in-line with previously announced expectations, however, given the unusually wide range of potential outcomes as a result of volatile and uncertain outlook related to COVID-19, Vesta's management has adjusted the company´s Full Year 2020 revenue guidance. Based on adjusted guidance, Full Year 2020 revenue is expected to increase between 1 to 2%, with NOI and EBITDA margins of 92% an 83%, respectively.
• Vesta was included within the S&P/BMV IPC Index and the S&P/BMV Total Mexico ESG Index
• At the close of June 30, 2020, Vesta signed 42 deferral agreements with selected tenants for approximately US$ 4.0 million or 3%, of Vesta's total annual income, to be collected primarily between August and December.
• Vesta´s second quarter 2020 rent collections reached 95%, 90% and 90% during April, May and June, respectively. April through June collections would have reached 100%, 100%, 90%, respectively, excluding deferrals.
• Leasing activity for the second quarter 2020 exceeded expectations, reaching approximately 1.5 million square feet, with 345,681 ft² (32,115 m²) in new contracts, with current and new clients; 1,132,642 ft² (105,226 m²) of which represents lease renewals. This drove maturities to 2.6% and 7.0%, for 2020 and 2021, respectively.
• During the quarter Vesta signed two new expansion projects with current clients in the Bajio and Central region, for 135,390 ft² (12,578 m²) with a total investment of around US$ 6 million. Therefore, Vesta's 2Q20 development portfolio totaled 1,540,467 ft² (143,114 m²) with a total expected investment of US$ 81.7 million. Weighted average expected return on cost is 10.6% for 2Q20 development projects.
• Consistent with Vesta´s Level 3 Strategy goals, 2Q20 NAV per share increased 4% to US$ 2.36, from US$ 2.27 in 2Q19, while pre-tax FFO per share increased 12% year on year, from US$ 0.0321 in 2Q19 to US$ 0.0358 at the end of 2Q20.
• Revenues increased 2% during 2Q20 to US$ 36.65 million, from US$ 35.94 million in 2Q19, while NOI and EBITDA margins reached 92.9% and 83.7%, respectively.
• During the quarter, Fitch Ratings maintained Vesta's BBB- rating with a stable view.
• The Company drew down the remaining US$ 40 million from its existing US$ 125 million three-year revolving credit facility. Total cash at the end of 2Q20 reached US$ 144.6 million.

• Revenues increased 2.0% in 2Q20 to US$ 36.65 million, from US$ 35.94 million in 2Q19. This is primarily due to new revenue-generating contracts during the second quarter 2020.
• Net Operating Income ("NOI") decreased 0.6% to US$ 34.06 million in 2Q20, compared to US$ 34.25 million in 2Q19. The second quarter 2020 NOI margin was 92.9%; a 237-basis-point decrease due to increased costs related to rental income generating properties which resulted from an increase in in the allowance for accounts receivable.
• EBITDA increased 1.4% to US$ 30.68 million in the second quarter 2020, versus US$ 30.26 million in the second quarter of 2019. 2Q20 EBITDA margin was 83.7%; a 49-basis point decrease due to a lower gross profit, however, as administrative expenses during the quarter decreased by 13.8% as a result of budget reviews and adjustments to reduce expenses for the remainder of the year.
• Pretax funds from operations ("FFO pretax") for 2Q20 increased 7.5% to US$ 20.49 million, from US$ 19.05 million for the same period in 2019. Pretax FFO per share was US$ 0.0358 for the second quarter 2020, compared with US$ 0.0321 for the same period in 2019; an 11.8% increase. FFO after tax for 2Q20 was US$ 17.28 million, compared to US$ 6.78 million during 2Q19. This increase was due to lower taxes resulting from Mexican peso depreciation.
• Total comprehensive gain for 2Q20 was US$ 9.37 million, versus a US$ 51.41 million gain in the same quarter 2019. This decrease was primarily due to the portfolio sale and higher gains in revaluation of investment properties during 2Q19.
• As of June 30, 2020, the total value of Vesta's investment property portfolio was US$ 2.04 billion; a 2.3% increase compared to US$ 1.99 billion at the end of December 31, 2019.

For a full version of Corporación Inmobiliaria Vesta Second 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, July 24, 2020, 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 July 24 until August 7, 2020 and can be accessed by dialing:
US, toll-free: +1 844-512-2921
International, toll: +1 412-317-6671
Replay ID: 13705579

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 June 30, 2020, Vesta owned 187 properties located in modern industrial parks in 15 states of Mexico totaling a GLA of 30.2 million ft² (2.80 million m²). The Company has multinational clients, which are focused in industries such as 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. We caution you that a number of 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.

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