EUR 100.00 For Business Accounts Only

AEDAS HOMES: 1Q’20 RESULTS AND T.P. UPGRADE (ANÁLISIS BANCO SABADELL)

1Q’20 vs. 2Q’19 Results (due to changes in the fiscal calendar, these results are compared to 2Q’19):
Sales: € 27.2 M (+208% vs. 158% BS(e));
EBITDA: € -1.6 M (€ -7.1 M in 2Q’19 vs. € -3.3 M BS(e));
Net Profit: € -4.1 M (€ -8.1 M in 2Q’19 vs. € -5.7 M BS(e)).

The results are marked by the impossibility of operating under normal conditions due to Covid-19. Deliveries reached 62 units, equivalent to € 23 M with a gross margin of 25%.
Both the delivery and margin figures are not representative of our expectations for FY2020 (note that this is the first quarter after the calendar modification) that should show an increasing performance. Pre-sales came in at 127 units, where 106 were formalised in June (this was already known). Cancellations were as usual on the quarter, according to the company, which we view as positive. 81% of the deliveries expected for 2020 have been already pre-sold.
April and May were very poor months but we are seeing a strong rally of the commercial activity since June. We believe that to recover the sales normality in the medium and long term it needs to sell around 500-650 units quarterly (166-217 monthly), and thus sales in June (106 units) are still below these levels, which is understandable.
With these results we raise our T.P. by +16% to € 21.23/sh. (+18.6% upside), as our previous estimates from May are now overly pessimistic, in our view. We reiterate our BUY recommendation.