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Corporación Inmobiliaria Vesta Reports Second Quarter 2021 Earnings Results

MEXICO CITY, July 21, 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 first quarter ended June 30, 2021. All figures included herein were prepared in accordance with International Financial Reporting Standards (IFRS) and are stated in US dollars unless otherwise noted.

Highlights

  • US $229.2 million in net equity follow-on proceeds related to Vesta’s capital market transaction successfully executed in 1Q were directed towards Vesta’s Level 3 Strategy during the second quarter 2021. The US $350 million sustainability-linked bond paid-down debt and extended the Company’s maturity profile during the quarter, with no significant payments expected until 2026.
  • Leasing reached 1,369,236 sf, net absorption being 804,163 sf, which implies 92.5% total occupancy during the second quarter, a sequential increase from 90.0% in 1Q21.  New client leasing activity included Coppel, The Home Depot and Samsung, reflecting Vesta’s successful marketing during the quarter. The Company also closed a pre-leased development building for Eaton Corporation, currently under construction.
  • Vesta’s US dollar denominated contractual rent increases, indexed to the US CPI, were favorably impacted by inflation during the first half of the year, as the US CPI increased to 5.4% in June from 1.4% in January.
  • Demand from a wide range of international and local companies and sectors strengthened leasing activity during the quarter, with 994,747 sf within the e-commerce and logistics sectors, representing 72.6% of total leasing. This underscores an e-commerce focus as part of Vesta’s Level 3 Strategy, also reflected in the addition of Puebla and Tijuana as new e-commerce markets for the Company. Tijuana and Juarez comprised 41.9% of second quarter leasing activity. We highlight that in the Tijuana market new leasing activity of vacant space achieved a rental increase of 12.6% compared with the previous tenants. 
  • Revenues increased 8.6% during 2Q21 to US$ 39.8 million, from US$ 36.7 million in 2Q20, while NOI and EBITDA increased 10.2% and 9.8%, respectively, and margins reached 94.3% and 84.6%, respectively. This reflects a continued prudent approach to cost and administrative expenses as well as improved collections which reduced the Company’s doubtful accounts reserve.
  • 2Q21 NAV per share increased 4.7% to US$ 2.47, from US$ 2.36 in 2Q20, while pre-tax FFO per share decreased 29.7% year on year, to US$ 0.0252 at the end of 2Q21, from US$ 0.0358 in 2Q20.
  • Vesta was selected for inclusion in the S&P/BMV Total Mexico ESG Index for the second consecutive year with 28 selected BMV-listed companies, based on the S&P’s Corporate Sustainability Assessment.
  • Vesta sold its third plot of improved land within the Querétaro market for US $11.0 million, totaling US $22.3 million year to date, comprised of 23 hectares in total.

Financial Indicators (million)

2Q21

2Q20

Chg. %

Rental Income

39.80

36.65

8.6

NOI

37.54

34.06

10.2

NOI Margin %

94.3%

92.9%

EBITDA

33.69

30.68

9.8

EBITDA Margin %

84.6%

83.7%

EBITDA Per Share

0.0492

0.0537

(8.3)

Total Comprehensive Income

111.28

9.37

na

FFO Pretax

17.25

20.49

(15.8)

FFO Pretax Per Share

0.0252

0.0358

(29.7)

FFO

3.75

17.28

(78.3)

FFO Per Share

0.0055

0.0302

(81.8)

EPS

0.1626

0.0164

na

Shares (average)

684.25

571.58

19.7

  • 2Q21 revenues increased to US$ 39.8 million; an 8.6% year on year increase from $36.65 million in 2Q20, while NOI and EBITDA increased 10.2% and 9.8%, respectively. Second quarter 2021 NOI Margin reached 94.3% with an 84.6% EBITDA margin, reflecting Vesta’s continued prudent approach to cost and expense management
  • 2Q21 pre-tax funds from operations (“pre-tax FFO”) decreased 15.8% to US$ 17.25 million, from US$ 20.49 million for the same period in 2020. Pretax FFO per share was US$ 0.0252 for the second quarter 2021, compared with US$ 0.0358 for the same period in 2020; a 29.7% decrease. 2Q21 after tax FFO was US$ 3.75 million, compared to US$ 17.28 million during 2Q20. This decrease was due to an increase in taxes during 2Q21 and an increase in common shares due to the successful capital market transaction.
  • Total comprehensive gain for 2Q21 was US$ 111.28 million, versus a US$ 9.37 million in the same quarter in 2020. This increase was primarily due to the re-evaluation of investment properties and a benefit in deferred taxes during 2Q21.
  • As of June 30, 2021, the total value of Vesta’s investment property portfolio was US$ 2.23 billion; a 6.1% increase compared to US$ 2.10 billion at the end of December 31, 2020.

For a full version of Corporación Inmobiliaria Vesta Second Quarter 2021 Earnings Release please visit: https://www.vesta.com.mx/investors/financial_information

CONFERENCE CALL INFORMATION:

Vesta will host a conference call on Thursday, July 22, 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 22 until August 5, 2021 and can be accessed by dialing:
US, toll-free: +1 844-512-2921
International, toll: +1 412-317-6671
Replay ID: 13721189

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, 2021, Vesta owned 189 properties located in modern industrial parks in 15 states of Mexico totaling a GLA of 31.6 million ft2 (2.93 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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SOURCE Corporación Inmobiliaria Vesta, S.A.B. de C.V.

Written by Tenner Smith

Tenner Smith - I have experience in financial intelligence and automated intelligence. In industry I have worked on artificial intelligence and machine learning. Tenner Smith is a reporter at DF media.

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