Corporación Inmobiliaria Vesta Reports Fourth Quarter 2021 Earnings Results

MEXICO CITY, Feb. 17, 2022 /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, 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

• Vesta delivered exceptional financial results for the full year 2021, exceeding the upper rage of the Company's revised guidance of 6-6.5% by 80 basis points to reach US$ 160.8 million; a 7.3% increase year over year. Full year 2021 NOI and EBITDA margins also exceeded the Company´s guidance by 70 basis points to reach 94.7% and by 50 basis points to reach 84.5%, respectively.
• Vesta achieved record high 2021 leasing activity with a total of 6.4 million sf; 2.7 million sf from new leases with clients such as DB Schenker, Home Depot, Samsung, Coppel, ZF Friedrichshafen and Kuehne + Nagel, among others. Almost 1.0 million sf in growth was derived from BTS projects with clients including Mercado Libre, Eaton Corporation, ThyssenKrupp and O'Reilly. 2.7 million sf 2021 leasing activity represented lease renewals.
• Leasing activity for the fourth quarter 2021 reached 1.5 million sf with 715,394 sf in new contracts with companies such as Coppel, Daimler, Freudenberg and Home Depot among others, and 804,540 sf in lease renewals. This resulted in an increase in portfolio occupancy: Vesta's 4Q21 total portfolio increased to 94.1% from 90.7% in 4Q20; stabilized occupancy increased to 94.3% from 91.1% in 4Q20 and same store occupancy increased to 94.0% from 92.6% in 4Q20.
• The Company increased projects under construction during 2021, building during the year 2.1 million square feet in development projects during 2021, at an average 10% yield on cost. Vesta delivered 802,225 sf in new construction during the 4Q21 with plans to begin construction on 632,208 sf in Monterrey and Tijuana. As of the 4Q21, Vesta's development pipeline reached 1.6 million sf with an estimated investment of US$ 88.3 million, with 9.9% cap rate.
• In line with the Company´s Level 3 Strategy, 4Q21 NAV per share increased 6.5% to US$ 2.61, from US$ 2.45 in 4Q20 while pretax FFO increased 3.4% to US$ 23.11 million compared to US$ 22.34 million in 4Q20. 4Q21 pretax FFO per share decreased 14.6% to US$ 0.0334, from US$ 0.0391 in 4Q20, due to Vesta's follow on offering at the beginning of 2021.
• ESG is a key pillar of the Company´s Level 3 strategy and Vesta achieved important related milestones during 2021, including: inclusion within the S&P/BMV Total Mexico index for the second consecutive year, inclusion within the Dow Jones Sustainability Index MILA for third consecutive year, and Vesta was one of 10 Mexican companies selected for inclusion within the 2022 Bloomberg Gender-Equality Index (GEI) in the 4Q21, in recognition of Vesta's commitment to supporting gender equality. Vesta is on track to achieve its targets related to the sustainability-linked bond the Company issued at the beginning of 2021, having closed the year with 9.2% LEED certified GLA. It's important to note that this number reflects the addition of 300,000 square feet in LEED certification during 2021 but was diminished by the sale of two LEED certified properties which together totaled 1 million square feet.

2022 Guidance

Vesta expects revenues to increase between 5% and 6% in 2022 with a 94.0% NOI margin and an 82.5% EBITDA margin, while maintaining the Company's solid performance across key operational metrics.

• Revenues increased by 9.4% in the fourth quarter 2021, to US$ 41.6 million from US$ 38.0 million in 4Q20. This increase is primarily due to new revenue-generating contracts and the inflation effect during 4Q21.
• Net operating Income ("NOI") increased 8.3% to US$ 39.0 million in 4Q21, compared to US$ 36.0 million in 4Q20. Fourth quarter 2021 NOI margin was 93.6%; a 94-basis-point decrease due to higher property costs.
• EBITDA increased 7.4% to US$ 34.3 million in the fourth quarter 2021, as compared to US$ 32.0 million in the fourth quarter of 2020. 4Q21 EBITDA margin was 82.5%; a 156-basis-point decrease due to higher administrative expenses as compared to the same quarter last year.
• 4Q21 pre-tax funds from operations ("pre-tax FFO") increased 3.9% to US$ 23.2 million, from US$ 22.3 million for the same period in 2020. Pretax FFO per share was US$ 0.0335 for the fourth quarter 2021, compared with US$ 0.0391 for the same period in 2020; a 14.3% decrease. 4Q21 after tax FFO was negative US$ 1.37 million, compared to US$ 7.89 million during 4Q20. This decrease was due to higher taxes, while the decrease on a per share basis was due to the Company's successful capital market transaction at the beginning of 2021.
• 4Q21 total comprehensive gain was US$ 43.3 million, versus US$ 43.1 million for the same quarter in 2020. This increase was primarily due to an increase in valuation of investment properties and a gain in properties sold.
• As of December 31, 2021, the total value of Vesta's investment property portfolio was US$ 2.26 billion; a 7.6% increase compared to US$ 2.10 billion at the end of December 31, 2020.

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

CONFERENCE CALL INFORMATION:

Vesta will host a conference call on Friday, February 18, 2022 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 18 until March 4, 2022 and can be accessed by dialing:

US, toll-free: +1 844-512-2921
International, toll: +1 412-317-6671
Replay ID: 13726463

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, 2021, Vesta owned 189 properties located in modern industrial parks in 15 states of Mexico totaling a GLA of 31.1 million ft2 (2.89 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.

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

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