Homex Reports 2Q13 Earnings Results

CULIACAN, Mexico, July 26, 2013 /PRNewswire/ -- Desarrolladora Homex, S.A.B. de C.V. ("Homex" or "the Company") [NYSE: HXM, BMV: HOMEX] today announced financial results for the Second Quarter ended June 30, 2013^[1].

Financial and Operating Highlights

• Total revenue for the second quarter of 2013 decreased 84.4 percent to Ps.1.1 billion (US$85.6 million) from Ps.7.1 billion (US$548.6 million) for the same period in 2012. Housing revenues were Ps.290.4 million (US$22.3 million), a decline of 93.4 percent compared to Ps.4.4 billion (US$337.5 million) during the second quarter of 2012.
• During the quarter the Company recognized revenues of Ps.800.9 million (US$61.5 million) in relation to building service contracts with state and the federal government compared to Ps.1.6 billion (US$127.5 million) during the year ago period.
• During the quarter, the Company effectively closed the transaction with IDEAL to sell Homex's interest in the penitentiaries projects for approximately Ps.4.5 billion generating an income of Ps.989.4 million which was registered as other income in the P&L.
• The Company recognized a charge of Ps.5.3 billion in Costs of Good Sold (COGS) for land and construction-in-progress inventory as per the initial viability analysis performed on the Company's housing projects and land inventory according to the recently published rules for subsidy application from SEDATU.
• For the quarter, the Company created a Ps.2.1 billion provision registered in Selling General and Administrative Expenses (SG&A) for uncollectable accounts receivable outstanding for more than 160 days from clients that lost their eligibility for subsidies or deteriorated their credit status, making collection of those receivables uncertain.
• As per the cancellation of currency hedges in relation to Homex's Senior Notes due 2019 and 2020, the Company registered a loss of Ps.1.2 billion in Net Comprehensive Financing Cost.
• For the six-months accumulated period, as of June 30, 2013, Homex generated a consolidated negative Free Cash Flow (FCF) of Ps.3.3 billion which was mainly driven by the negative free cash flow of Ps.7.5 billion without the penitentiaries projects mainly driven by the Company's six-months accumulated negative net income.

Commenting on second quarter results, Gerardo de Nicolas, Chief Executive Officer of Homex, said:

"The second quarter of 2013 reflects the industry's structural and policies changes which have affected Homex' operations since year end 2012.  Despite  the complexity of the challenges that we had been facing which have translated in legal and liquidity implications affecting our operations, we continue to feel positive about our future prospects and more importantly we continue to work diligently to solve Homex' current situation. The housing industry in Mexico continues to be very attractive and we trust in the Federal government's commitment and support for a solid and active future for the industry and for our company.

During the quarter, we have dedicated a lot of time and effort to evaluate Homex' financial alternatives as well as to restructure and resize our operations to reflect current conditions with the objective of reactivating our operations to improve our financial position.

During the quarter, we also successfully closed the transaction with IDEAL to sell Homex' interest in the penitentiaries projects. This key operation brought resources to Homex to reduce its liabilities.

We will continue to dedicate our efforts on progressively reactivating our housing projects in Mexico; we have made important advances during the second quarter of 2013 which should enable us to achieve better performance during the following months."

Detailed Financial Reports

The Company produces a detailed earnings report that provides information regarding Operating and Financial results. This detailed information is considered part of this earnings announcement and is available in full with this earnings release via the Company's website at http://www.homex.com.mx/ri/index.htm through email distribution or the Company's filings with the SEC and the CNBV.

DESARROLLADORA HOMEX, S.A.B de C.V.
SECOND QUARTER 2013 RESULTS
CONFERENCE CALL NOTICE

Please call 10 minutes prior to start time and request the Homex call.  During this quarter the Company will not host a Q&A session.

[1] Unless otherwise noted, all monetary figures in the tables are presented in thousands of Mexican pesos and in accordance with International Financial Reporting Standards (IFRS). Second quarter 2013 and 2012 figures are presented without recognizing the effects of inflation as per the application of IAS-29 "Effects of inflation." The symbols "Ps." and "$" refer to Mexican pesos and "US$" refers to U.S. dollars. U.S. dollar  figures in this release are presented only for the convenience of the reader and are estimated, using an exchange rate of Ps.13.0235 per US$1.00, the rate of exchange in effect on June 30, 2013. Second quarter and first half 2013 and 2012 financial information is unaudited and subject to adjustments.

Percentage changes are  expressed in basis points and are provided for the convenience of the reader. Basis points figures may not match, due to rounding.

SOURCE Desarrolladora Homex, S.A. de C.V.