Corporación Inmobiliaria Vesta Reports First Quarter 2020 Earnings Results

MEXICO CITY, April 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 its results for the first quarter ended March 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

• Following our strong corporate governance standards, Vesta's Board of Directors has made the decision to reduce the Board's compensation by 25% during the second half of 2020. This amount will be redirected to the Company´s COVID-19 ESG Program.
• The Vesta COVID-19 ESG program supports scholarships for 200 nurses, purchases critical medical equipment needed at clinics within the State of Mexico, and is funding upgrades for temporary clinics in Mexico City and Tijuana. Vesta is also working with the Mexican Association of Industrial Parks ("AMPIP") to purchase much-needed medical supplies. These programs are in addition to the Company's existing programs established through Vesta´s ESG Committee.
• Leasing activity for the first quarter 2020 reached approximately two million square feet, with 1.7 million square feet in new contracts, of which almost 70% represents leases to logistics operations; 212,616 ft² (19,573 m²) of which represents lease renewals. This drove stabilized occupancy to 93.6% and total occupancy to 92.9%, at the end of 1Q20.
• During the quarter Vesta signed one million square feet for two new BTS projects with 1) an international e-commerce company and 2) a global food and beverage company. For the former company, Vesta will develop in two phases a BTS facility at Vesta Park Guadalajara with a total investment of US$ 39 million. The latter BTS project will be located at Vesta Park Puebla I with a total expected investment of approximately US$ 15 million. Therefore, Vesta's 1Q20 development portfolio totaled 1,762,243 ft² (163,718 m²) with a total expected investment of US$ 93.6 million. Weighted average expected return on cost is 10.5% for 1Q20 development projects.
• Revenues increased nearly 4% during 1Q20 to US$ 37.71 million, from US$ 36.29 million in 1Q19, while NOI and EBITDA margins reached 94.0% and 83.4%, respectively.
• NAV per share increased 10.0% to US$ 2.36 in 1Q20, from US$ 2.14 in 1Q19, while pre-tax FFO per share increased 3.9% year on year, from US$ 0.0368 in 1Q19 to US$ 0.0382 at the end of 1Q20.
• The Company drew down US$ 85 million from an existing US$ 125 million three-year revolving credit facility which matures in August 2022. Under the terms of the credit facility, Vesta pays an interest rate of Libor +185 bps. Total cash at the end of 1Q20 reached US$ 122.84 million.

• Revenues increased 3.9% in 1Q20 to US$ 37.71 million, from US$ 36.29 million in 1Q19. This is primarily due to new revenue-generating contracts during the first quarter 2020.
• Net Operating Income ("NOI") increased 1.4% to US$ 35.44 million in 1Q20, compared to US$ 34.95 million in 1Q19. The first quarter 2020 NOI margin was 94.0%; a 235-basis-point decrease due to increased costs related to rental income generating properties which resulted from an increase in property taxes, maintenance, as well as an increase in the allowance for accounts receivable.
• EBITDA increased 1.1% to US$ 31.46 million in the first quarter 2020, versus US$ 31.11 million in the first quarter of 2019. 1Q20 EBITDA margin was 83.4%; a 229-basis point decrease, due to an increase in administrative expenses during the quarter resulting from higher legal, audit and consulting expenses, as well as the long-term employee incentive increase.
• Pretax funds from operations ("FFO pretax") for 1Q20 increased 1.1% to US$ 22.17 million, from US$ 21.93 million for the same period in 2019. Pretax FFO per share was US$ 0.0382 for the first quarter 2020, compared with US$ 0.0368 for the same period in 2019; a 3.9% increase. FFO after tax for 1Q20 was US$ 20.32 million, compared to US$ 10.76 million during 1Q19. This increase was due to lower current taxes resulting from Mexican peso depreciation.
• Total comprehensive loss for 1Q20 was US$ 25.93 million, versus a US$ 20.98 million gain in the same quarter 2019. This decrease was primarily due to a higher deferred tax in the first quarter of 2020.
• As of March 31, 2020, the total value of Vesta's investment property portfolio was US$ 2.02 billion; a 1.3% increase compared to US$ 1.99 billion at the end of December 31, 2019.

For a full version of Corporación Inmobiliaria Vesta First 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, April 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 April 24 until May 8, 2020 and can be accessed by dialing:
US, toll-free: +1-844-512-2921
International, toll: +1 412-317-6671
Replay ID: 13700033

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 March 31, 2019, Vesta owned 184 properties located in modern industrial parks in 16 states of Mexico totaling a GLA of 29.8 million ft² (2.76 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.