Corporación Inmobiliaria Vesta Reports Fourth Quarter and Full Year 2022 Earnings Results

MEXICO CITY, Feb. 15, 2023 /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, 2022. All figures included herein were prepared in accordance with International Financial Reporting Standards (IFRS) and are stated in US dollars unless otherwise noted.

Full Year and Q4 2022 Highlights

• Vesta delivered exceptional financial results for the full year 2022, exceeding the upper range of revised 7.5-8.0% revenue guidance by 270 basis points, to reach US$ 178.0 million: a 10.7% increase year over year. Full year 2022 NOI margin reached 95.0%, exceeding the 94.0% guidance by 100 basis points, while EBITDA margin reached 84.4% exceeding the 83.5% guidance by 93 basis points.
• Vesta achieved record high leasing activity in 2022, reaching a total of 10.6 million sf: 3.8 million sf from new leases with clients such as DSV, Amazon, Eaton, Home Depot, Foxconn, Safran and Cummins, among others. Lease renewals for the year reached 6.7 million sf, a historical high for Vesta, with a seven-year average weighted lease life and a 7% positive spread.
• Leasing activity for the fourth quarter 2022 reached 1.3 million sf with 933 thousand sf in new contracts with companies such as Cummins, Freudenberg, Foxconn, Safran among others, and 387 thousand sf in lease renewals. As a result, Vesta's 4Q22 total portfolio occupancy increased year on year to 95.1% from 94.1% in 4Q21; stabilized occupancy increased to 97.3% from 94.3% in 4Q21 and same store occupancy increased to 97.2% from 94.0% in 4Q21.
• Subsequent to quarter's end, in January 2023, Vesta pre-leased two buildings with Polaris, the global industry leader in powersports recreational vehicles. The buildings are currently under construction at the new Vesta Park Apodaca in Monterrey under a 10-year lease which comprises a total of 577 thousand sf and considers potential additional space.
• The Company began construction during 2022 on 4.6 million square feet at a weighted average of 10% yield on cost. Vesta delivered 1.2 million sf in new construction during the 4Q22 with plans to begin construction on 1.9 million sf across the various Mexico regions where Vesta is present. As of 4Q22, Vesta's development pipeline reached 3.9 million sf with an estimated investment of US$ 241.7 million and a 10.0% yield on cost.
• During the quarter Vesta acquired 52 acres of land in the San Martin Obispo submarket of Mexico City, located adjacent to one of Mexico City's main roads, which ensures optimal connectivity to the Mexico City market. This best-in-class location is ideal to develop 1.0 million sf for last mile distribution center and logistics. The acquisition is another addition to Vesta's increasing footprint within metropolitan areas, in line with the Company's Level 3 Strategy and related growth plan.
• 2022 NAV per share increased by 10.1% to US$ 2.86, from US$ 2.59 in 2021, while pretax FFO increased 21.5% to US$ 103.9 million in 2022, compared to US$ 85.6 million in 2021. 2022 pretax FFO per share increased 22.0% to US$ 0.15, from US$ 0.12 in 2021.
• During the quarter, Vesta completed an acquisition for 187 thousand sf portfolio located in Toluca, comprised by two properties which have been leased to international companies that are suppliers of the Stellantis automotive manufacturing plant. The portfolio was acquired for US$ 15.4 million, with an average rent of US$ 6.78 sf per year at an 8.2% cap rate, including closing costs.
• ESG is a key pillar of the Company's Level 3 strategy and Vesta achieved important related milestones during 2022, including: inclusion within the S&P/BMV Total Mexico index for the third consecutive year and inclusion within the S&P Yearbook for the first time. Vesta was also selected for inclusion within the 2023 Bloomberg Gender-Equality Index (GEI) in the 4Q22, in recognition of the Company's commitment to supporting gender equality. Further, Vesta is also on track to achieve its targets related to the sustainability-linked bond which the Company issued at the beginning of 2022, having closed the year with five new LEED certified buildings.

 2023 Guidance

Vesta expects revenues to increase between 13-14% in 2023 with a 93.0% NOI margin and an 82.0% EBITDA margin, while maintaining the Company's solid performance across key operational metrics.

• Net Operating Income (NOI) increased 14.5% to US$ 44.6 million in 4Q22, compared to US$ 39.0 million in 4Q21. The 4Q22 NOI margin was 94.1%, a 40-basis-point increase due to higher revenues as result of higher occupancy in the portfolio.
• EBITDA increased 15.9% to US$ 39.8 million in 4Q22, as compared to US$ 34.3 million in 4Q21. 4Q22 EBITDA margin was 83.9%; a 138-basis-point increase due to a higher gross profit year on year.
• 4Q22 pre-tax funds from operations (pre-tax FFO) increased 18.6% to US$ 27.5 million, from US$ 23.2 million for the same period in 2021. Pretax FFO per share was US$ 0.0400 for the fourth quarter 2022, compared with US$ 0.0335 for the same period in 2021; a 19.3% increase. 4Q22 after tax FFO was US$ 13.6 million, compared to a loss of US$ 1.4 million in 4Q21. This increase was due to increased EBITDA and a lower current tax in 4Q22.
• 4Q22 total comprehensive gain was US$ 84.1 million, versus US$ 43.2 million in 2021. This increase was primarily due to an increase in EBITDA and lower income tax expenses in 4Q22.
• The total value of Vesta's investment property portfolio was US$ 2.74 billion as of December 31, 2022; a 21.3% increase compared to US$ 2.26 billion at the end of December 31, 2021.

For a full version of Corporación Inmobiliaria Vesta Fourth Quarter and Full Year 2022 Earnings Release please visit: https://vesta.com.mx/investors/financial_information

CONFERENCE CALL INFORMATION:

Vesta will host a conference call on Thursday, February 16, 2023 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: +1 877-423-9813
International, toll: +1 201-689-8573
Mexico, toll-free: +1 800-522-0034

A replay will be available from 1 p.m. on February 16 until March 2, 2023 and can be accessed by dialing:
US, toll-free: +1 844-512-2921
International, toll: +1 412-317-6671
Replay ID: 13735704

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, 2022, Vesta owned 202 properties located in modern industrial parks in 15 states of Mexico totaling a GLA of 33.7 million ft² (3.13 million m²). The Company has multinational clients, which are focused on 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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