Corporación Inmobiliaria Vesta Reports First Quarter 2019 Earnings Results

MEXICO CITY, April 25, 2019 /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, 2019. 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 announced on April 22, 2019 that it has entered into a definitive agreement to sell a property portfolio totaling 1.6 million square-feet for a total of US$ 109.3 million, this reflects a 20% increase over the divested portfolio's NAV. The portfolio consists of eight industrial properties, 60% of which are located in Queretaro (960,078 sf) and 40% in Toluca (629,198 sf), Mexico. The blended cap rate for the divested Portfolio is 7.1%. The transaction is subject to approval by the Mexican Antitrust Commission (COFECE) final resolution and to other regulatory items.
• First quarter 2019 revenues increased by 15.7% to US$ 36.29 million, from US$ 31.38 million in 1Q18, with NOI and EBITDA margins of 96.3% and 85.7%, respectively.
• FFO increased 23.2% year over year, to US$ 10.76 million, from US$ 8.73 million. FFO per share for 1Q19 was US$ 0.018 from US$ 0.014 in 1Q18.
• Record financial results in 2018 enabled a Ps$ 0.425 dividend per share distribution for the first quarter 2019, a 13.7% increase compared to 1Q18.
• Continued growth of rent per square foot in the total portfolio of 6.6% compared to the same period of last year and a 4% CAGR in the last 3 years.
• Vesta had a robust 1.7 million ft² (154,944 m²) in leasing activity, including 257,250 ft² (23,899 m²) of new leases with existing and new international clients such as Harman, Freudenberg and DB Schenker, among others, and a 1.4 million ft² (131,045 m²) of lease renewals. To date, Vesta has renewed 65% of leases to expire in 2019 and 2020 with releasing spreads above 2% compared to in place rent. The Company expects continued renewals, while extending current contracts and increasing rents.
• Stabilized portfolio grew 8.9% in 1Q19, to 28,165,300 ft² (2,616,642 m²), from 25,874,812 ft² (2,403,849 m²) in 1Q18, while the stabilized occupancy rate remained stable at 96.8%. Vesta increased its total GLA portfolio by 3,368,087 ft² (312,906 m²) to 30,416,390 ft² (2,825,775 m²) in 1Q19, from 27,048,301 ft² (2,512,870 m²) in 1Q18. Total portfolio occupancy for 1Q19 was 90.8%, from 91.8% in 1Q18.
• New buildings delivered during 1Q19 amounted to 548,814 ft² (50,986 m²) of GLA, of which 15% has already been leased.
• Vesta's development portfolio totaled 949,159 million ft² (88,180 m²) of GLA in 1Q19, with the addition of one new BTS buildings related to expansions in Juarez by existing client BRP and two inventory buildings in Tijuana and San Luis Potosi. Weighted average expected return on cost is 11.2% for 1Q19 development projects.

• Revenues increased 15.7%, to US$ 36.29 million in 1Q19 from US$ 31.38 million in 1Q18. This is primarily due to the increase in occupied space which was rented during the first quarter of the year.
  
  
• Net Operating Income ("NOI") increased 14.9% to US$ 34.95 million in 1Q19, compared to US$ 30.43 million in 1Q18. The first quarter 2019 NOI margin was 96.3%; a 68-basis-point decrease due to higher costs related to properties that generate rental income.
  
  
• EBITDA increased 15.7% to US$ 31.11 million in 1Q19, versus US$ 26.89 million in the first quarter of 2018. The EBITDA margin was 85.7% in 1Q19, a two-basis point increase, due to an increase in revenue, while the administrative expense margin remained constant.
  
  
• Funds from operations ("FFO") for 1Q19 increased 23.2% to US$ 10.76 million, from US$ 8.73 million for the same period in 2018. FFO per share was US$ .0180 for the first quarter, compared with US$ 0.0146 for the same period in 2018, a 23.7% increase. The increase was due to higher EBITDA during 1Q19.
  
  
• Total comprehensive income for 1Q19 was US$ 20.98 million, versus a gain of US$ 36.15 million in the same quarter 2018. This decrease was primarily due to a higher deferred tax expense of US$ 0.80 million during 1Q19 compared to the deferred tax benefit of US$ 16.29 million perceived in the first quarter of 2018.
  
  
• As of March 31, 2019, the total value of Vesta's investment property portfolio was US$ 1.92 billion; a 1.8% increase compared to US$ 1.88 billion at the end of December 31, 2018.

For a full version of Corporación Inmobiliaria Vesta First Quarter 2019 Earnings Release, please visit: https://www.vesta.com.mx/investors/financial_information

CONFERENCE CALL INFORMATION:

Vesta will host a conference call on Friday, April 26, 2019, 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

Replay will be available until May 10, 2019
Please dial:
US, toll-free: +1-844-512-2921
International, toll: +1 412-317-6671
Replay ID: 13687094

About Vesta

Vesta is a real estate owner, developer and asset administrator of industrial buildings and distribution centers in Mexico. As of March 31, 2019, Vesta owned 187 properties located in modern industrial parks in 14 states of Mexico totaling a GLA of 30.4 million ft² (2.83 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.